discuss I think some $3000 domains are worth more than other $3000 domains

[Lord Antares]

I know for a fact that some domains purchased in the $300 range at an auction sold at a $3000 range to an end user. I also know many hand regs or bargain bin domains sold for the same range so where does the disparity come from?

While browsing the appraisal section on the forum, I saw a lot of brandable domains get a $4X appraisal and I also saw a lot of EMDs and keyword domains get the same appraisal, even though I'd value the latter a lot more in some cases.

The difference is in sell through rates. I think brandables (specifically made up words or two word combos) can be so utterly specific, that very few people would consider buying them. Whenever they do, they were going for that specific name for a reason and they won't settle for alternatives because there are none similar. On the other hand, more generic domains are easy to think of and will thus attract more buyers. This results in a faster sale, even if the price ends up being the same.

My point is, appraisals don't tend to acknowledge this and this might mislead people. It's easy to appraise a hand reg brandable at $4x and it technically would be right as they tend to sell over at brandbucket and similar websites in that range but there are people who specialize in hand regging and selling brandables who have to struggle to sustain a positive ROI. These people typically need to have large portfolios to have regular sales and don't forget the eternal renewal loop. On the other hand, a portfolio of expensive liquid domains might need to be a fraction of that size to achieve the same number of sales.

This might be obvious to seasoned domainers, but newbies might leave thinking they just got free money after getting their hand reg appraised at $1500; an appraisal which might not even be wrong in a technical sense. Then they will do it again and again, thinking they are multiplying money. I think it might be helpful to indicate this somehow while doing an appraisal.

P.S. I have nothing against brandables. I was using them because they are the easiest example. Obviously, a brandable domain like Neva.com will blow this notion out of the water. I generalized for convenience.

What do you think about this? Discuss.

 

[bmugford]

The truth is any domain can sell for $3000 to the right buyer. The difference is the likelihood.
The better domains have much higher odds of that happening.

Brandables are far more subjective than other types which have a more defined use.

Brad

 

[Lord Antares]

The truth is any domain can sell for $3000 to the right buyer. The difference is the likelihood.
The better domains have much higher odds of that happening.

Brad

Exactly my point. Therefore, I just want to express that a $3000 appraisal might not mean much and might mislead people into believing that they have more than they actually do.

 

[bmugford]

Exactly my point. Therefore, I just want to express that a $3000 appraisal might not mean much and might mislead people into believing that they have more than they actually do.

Yep. Just look at NameBio.com sales between say $2,500 - $3,500. Some domains in that range are incredible and could be resold easily and others are just garbage. It is the nature of domains and subjective values to a specific buyer at a specific time.

In a perfect world appraisals would include likelihood of a sale and consider liquidity.

Brad

 

[Ostrados]

The difference is in sell through rates. I think brandables (specifically made up words or two word combos) can be so utterly specific, that very few people would consider buying them. Whenever they do, they were going for that specific name for a reason and they won't settle for alternatives because there are none similar. On the other hand, more generic domains are easy to think of and will thus attract more buyers. This results in a faster sale, even if the price ends up being the same.

On the contrary I believe there is much higher demand on brandable domains but supply is much higher at the same time, and thats lower STR considerably. Most startups prefer to chose brandable names (that are madeup names, short names, creative names..etc) because such names provide uniqueness and are easier to remember (imagine that Uber picked a name such as "HireCab" instead of "Uber" for example).

But as you said the main problem with brandables is that there are too many free options out there, which contributes also to high supply mentioned above.

Main advantage of brandables is that the acquisition cost is much lower and thus you can scale up on the go, while in EMDs acquisition cost is much higher and hard to scale if you dont have decent starting capital.

That being said I feel the appraisal are just fine, because appraisal are just static appraisals with no mention to selling probability, it would be great if appraisals include expected STR but I think it is very hard to estimate. From my experience I estimate that brandable 4Ls have at least 5x higher STR than normal brandables, but I dont know how 5L domains compare to 2 words domains or one word brandable vs EMD..etc

 

[Lord Antares]

On the contrary I believe there is much higher demand on brandable domains but supply is much higher at the same time, and thats lower STR considerably. Most startups prefer to chose brandable names (that are madeup names, short names, creative names..etc) because such names provide uniqueness and are easier to remember (imagine that Uber picked a name such as "HireCab" instead of "Uber" for example).

But as you said the main problem with brandables is that there are too many free options out there, which contributes also to high supply mentioned above.

Main advantage of brandables is that the acquisition cost is much lower and thus you can scale up on the go, while in EMDs acquisition cost is much higher and hard to scale if you dont have decent starting capital.

That being said I feel the appraisal are just fine, because appraisal are just static appraisals with no mention to selling probability, it would be great if appraisals include expected STR but I think it is very hard to estimate. From my experience I estimate that brandable 4Ls have at least 5x higher STR than normal brandables, but I dont know how 5L domains compare to 2 words domains or one word brandable vs EMD..etc

We are in agreement here. You are talking about brandables in general. I was thinking about a single brandable domain vs a single emd. The latter will generate more interest in general. Brandables in whole are very popular though.

 

[blogspotter]

A domain is only worth what a buyer is willing to pay

 

[Lord Antares]

A domain is only worth what a buyer is willing to pay

This is true but there are still objectively better or worse domains, i.e. domains that are more likely to sell and/or sell for a higher price.

 

[blogspotter]

This is true but there are still objectively better or worse domains, i.e. domains that are more likely to sell and/or sell for a higher price.

of course, but every domain name is unique. While some class of domains are higher priced than others, the price is still what a buyer is willing to pay. You asking price is not a price is there are no buyers for eternity

 

[lock]

All you need to worry about is bumping up the price of every keyword.

 

[Lord Antares]

of course, but every domain name is unique. While some class of domains are higher priced than others, the price is still what a buyer is willing to pay. You asking price is not a price is there are no buyers for eternity

But you can't appraise a domain at "beauty is in the eye of the beholder". If you take a trash hand reg by a noob for example, I think it would be more helpful to appraise it as worthless than "you never know".

Otherwise, he might end up like That Name Guy hoarding trash believing he's got gold.

 

[Kuffy]

I'm finding it very difficult to work out current prices. I've just been offered $1,000 for a two word .com name, and it is descriptive of an industry niche that is burgeoning at the moment. The offer comes from a US company that uses the two words as its business name. It's a 9 letter name, and GD values it at $1.366, but I believe that is low.

What is the best place for me to catch up on values. I plan to spend some time reading DNjournal of course, but my feeling is that brandables and short descriptive names have increased in value as a result of the virus lock downs.

 

[bmugford]

A domain is only worth what a buyer is willing to pay

I see that saying a lot, but IMO it is kind of a meaningless platitude.

There are certainly domains out there that a lot more people are willing to pay premiums for than others.

There is a difference between educated investing and playing the lottery. It comes down to odds and likelihoods.

But you can't appraise a domain at "beauty is in the eye of the beholder". If you take a trash hand reg by a noob for example, I think it would be more helpful to appraise it as worthless than "you never know".

Otherwise, he might end up like That Name Guy hoarding trash believing he's got gold.

Yep. Well said.

Brad

 

[Jimmysun]

I think people pricing brandable domains higher is not because they are newbies, most of them intuitively knew those names are lesser chances to get picked up and if there is a buyer in favor of it then could be much more wanted than EMDs.

 

[blogspotter]

But you can't appraise a domain at "beauty is in the eye of the beholder". If you take a trash hand reg by a noob for example, I think it would be more helpful to appraise it as worthless than "you never know".

Otherwise, he might end up like That Name Guy hoarding trash believing he's got gold.

Who is this Name Guy lol? The one with Ideas and no time?

When I say the price is what a buyer is willing to pay, I am not referring to the trash domains that the regger thinks is gold. What I mean is, you can't say this is a one word insurance domain so it is xxx,xxx

Or more like every domain is unique depending on the timing, how badly the buyer wants it, what kind of position the buyer is in and a lot of different factors, and every transaction is unique, and at the end it al depends on how much the buyer is willing to pay at the end of it.

Not saying every domain has some value. And definitely not talking about keeping a shit domain until a crazy buyer comes along.
I am talking about the uniqueness of how people price domains. There is no pattern at all, except some liquid domains in the wholesale.

 

[Lord Antares]

I think people pricing brandable domains higher is not because they are newbies, most of them intuitively knew those names are lesser chances to get picked up and if there is a buyer in favor of it then could be much more wanted than EMDs.

Yes, that's my point. They aren't wrongly priced but they can give the wrong idea to newbies.

Have you ever encountered someone selling a portfolio or talking about his portfolio? I find it funny how people will consider the best case scenario when appraising these portfolios.

Like if somebody has 100 domains like govop.com (hand regs), they say they have about $200,000 worth of domains because each can be sold for $2000 lol. They treat it like they have an asset that's automatically worth that kind of money because each of those domains has a minuscule chance of getting sold for $4x. I've seen this kind of thing before on this forum.

Who is this Name Guy lol? The one with Ideas and no time?

When I say the price is what a buyer is willing to pay, I am not referring to the trash domains that the regger thinks is gold. What I mean is, you can't say this is a one word insurance domain so it is xxx,xxx

Or more like every domain is unique depending on the timing, how badly the buyer wants it, what kind of position the buyer is in and a lot of different factors, and every transaction is unique, and at the end it al depends on how much the buyer is willing to pay at the end of it.

Not saying every domain has some value. And definitely not talking about keeping a shit domain until a crazy buyer comes along.
I am talking about the uniqueness of how people price domains. There is no pattern at all, except some liquid domains in the wholesale.

Yes, that name guy is the guy who knows and has personally negotiated with CEOs of every single fortune 500 company, has friends in every world renowned organisation and knows every lawyer and celebrity on earth. I think he even said he named a country. Entrepreneurs beg him to name their company yet his brandables are not selling, weirdly enough.

Anyway, I agree that every domain is unique but I disagree that there are no patterns. There are patterns for successful domains, even if there are a lot of anomalies due to subjective factors.

 

[Bob Hawkes]

Thanks for a perceptive argument in your OP @Lord Antares and an excellent topic for discussion. I agree that it is easy to overlook the critical sell-through rate and that the same probable price can have different probabilities of sale.

I listened to an interview lately with the BB founder and she mentioned that the best brandable names could apply to many different businesses, so don’t entirely agree that brandable names have narrower audience.

The sell-through rates to the degree reported seem better at brandable marketplaces than industry wide for the TLDs they handle, I would assume largely because the selection process eliminates many unlikely to sell names.

But to your main point I agree. An ideal appraisal would in my opinion include price, probability of sale, and supporting evidence for both to the degree possible.

Thanks again for a great topic for the thread.

Bob

 

[karmaco]

I think everything is subject to interpretation. I do deal in brandables as many others do and I think at times the opposite is true- some marketplaces routinely undervalues domains and that tends to be much more likely than to overprice them. The domainers in this scene tend to just accept these subjective valuations. I have seen names that should not have such low price tags and yet they do. Have also seen garbage that should not be there at all.

No one can declare with certainty any domain will sell be it EMD or brandables. Let’s face it, brandables are popular because EMD is not snazzy and is rather boring. Different strokes.

As far as the newbs, if they come here they are warned immediately not to trust any valuation as gospel. Some people have to register crap to later find out what is not crap. Others are able to learn from others mistakes.

 

[blogspotter]

Anyway, I agree that every domain is unique but I disagree that there are no patterns. There are patterns for successful domains, even if there are a lot of anomalies due to subjective factors.

Talking of successful names,
One domain get sold for $200,000 and then gets resold for 120k? Where is the pattern in that.

A well funded startup might be willing to pay a lot more for a generic keyword .com
The same generic keyword will have a a different perceived value if two buyers are different industries
Book.com will be valued very differently by an accounting firm vs a book shop vs a betting company?

There is no standard at all.

People give a higher price tag and wait. Some people lower the price for liquidity.

Please give example of a repeatable pattern.

Even on Domain sherpa, different people will value a domain very differently. A 100% range is not a pattern, but the prices can vary as high as 10x in what we value and it they get bought for,


I think we are going off tangent from your main post though. I totally agree with your main posts. regarding your main posts.
The valuation of the brandables are totally pointless. Most of the The buyers are actually paying for a "Naming" service, not really a domain name. And it is best to differentiate the two.

 

[Lord Antares]

Thanks for a perceptive argument in your OP @Lord Antares and an excellent topic for discussion. I agree that it is easy to overlook the critical sell-through rate and that the same probable price can have different probabilities of sale.

I listened to an interview lately with the BB founder and she mentioned that the best brandable names could apply to many different businesses, so don’t entirely agree that brandable names have narrower audience.

The sell-through rates to the degree reported seem better at brandable marketplaces than industry wide for the TLDs they handle, I would assume largely because the selection process eliminates many unlikely to sell names.

But to your main point I agree. An ideal appraisal would in my opinion include price, probability of sale, and supporting evidence for both to the degree possible.

Thanks again for a great topic for the thread.

Bob

I would just like to point out that I was comparing the demand of a singular domain, not the size of the target niche.

Obviously, non-keyword brandables have the widest niche of all as they might fit any company, I was just saying that any singular made up brandable will typically have lower demand than a typical EMD.

I think everything is subject to interpretation. I do deal in brandables as many others do and I think at times the opposite is true- some marketplaces routinely undervalues domains and that tends to be much more likely than to overprice them. The domainers in this scene tend to just accept these subjective valuations. I have seen names that should not have such low price tags and yet they do. Have also seen garbage that should not be there at all.

No one can declare with certainty any domain will sell be it EMD or brandables. Let’s face it, brandables are popular because EMD is not snazzy and is rather boring. Different strokes.

As far as the newbs, if they come here they are warned immediately not to trust any valuation as gospel. Some people have to register crap to later find out what is not crap. Others are able to learn from others mistakes.

I just used brandables as a practical example. Brandables can be very good. Even those that aren't can be very cheap to compensate.

Talking of successful names,
One domain get sold for $200,000 and then gets resold for 120k? Where is the pattern in that.

A well funded startup might be willing to pay a lot more for a generic keyword .com
The same generic keyword will have a a different perceived value if two buyers are different industries
Book.com will be valued very differently by an accounting firm vs a book shop vs a betting company?

There is no standard at all.

People give a higher price tag and wait. Some people lower the price for liquidity.

Please give example of a repeatable pattern.

Even on Domain sherpa, different people will value a domain very differently. A 100% range is not a pattern, but the prices can vary as high as 10x in what we value and it they get bought for,


I think we are going off tangent from your main post though. I totally agree with your main posts. regarding your main posts.
The valuation of the brandables are totally pointless. Most of the The buyers are actually paying for a "Naming" service, not really a domain name. And it is best to differentiate the two.

We are not talking about science, only things that tend to be true a lot of the time.
Things like:
- shorter brandables generally being more valuable than longer ones (pronounceable 4Ls sell for more than pronounceable 6Ls in general)
- some suffixes/prefixes being better than others. "City" tends to sell more than "bungalow". Therefore, sportcity.com should rightly be considered more valuable than sportbungalow.com
- .com is the most valuable tld. .net is less valuable, .mobi less still etc. Lots of evidence to support this claim

Patterns are real, they're just not science.

 

[frank-germany]

A domain is only worth what a buyer is willing to pay

you a victim of a popular fake news approach


you are not obliged to sell the domain to an offer you receive

that why the contrary is true:
a domain is worth what you are willing to sell it for

 

[blogspotter]

We are not talking about science, only things that tend to be true a lot of the time.
Things like:
- shorter brandables generally being more valuable than longer ones (pronounceable 4Ls sell for more than pronounceable 6Ls in general)
- some suffixes/prefixes being better than others. "City" tends to sell more than "bungalow". Therefore, sportcity.com should rightly be considered more valuable than sportbungalow.com
- .com is the most valuable tld. .net is less valuable, .mobi less still etc. Lots of evidence to support this claim

Patterns are real, they're just not science.

I am not sure where were going, but that is pretty obvious. I won't call that a pattern. I guess were are arguing over semantics.

Generally Avocados are more expensive than tomatoes is not a pattern,

Avocados consistently selling for 3.49-5.49 depending on season is a pattern.
Avocados selling 3.49 today, 6.99 tomorrow, 8.99 next day and 2.99 the next day is not a pattern.


You know, talking about pattern, it makes even lesser sense once see so many domains bought for 1000's of dollars and left undeveloped, or redirected to some unrelated site.

 

[blogspotter]

you a victim of a popular fake news approach


you are not obliged to sell the domain to an offer you receive

that why the contrary is true:
a domain is worth what you are willing to sell it for

I can price a domain name 1 million and never sell it and it won't be the value of the domain.
Anyway, my point was how the same domain can have different value.
of course a transaction requires both a sale and a purchase, and then there is the seller market and there is buyer market depending on cirscumstance

 

[Lord Antares]

I can price a domain name 1 million and never sell it and it won't be the value of the domain.
Anyway, my point was how the same domain can have different value.
of course a transaction requires both a sale and a purchase, and then there is the seller market and there is buyer market depending on cirscumstance

But that was the entire premise of the argument. You said it's not possible to evaluate a domain name due to the randomness of the sales. I claimed that it is, as clearly evidenced by patterns above.

My point is, "a domain is worth whatever someone is willing to pay for it" is a non-genuine response as there are clearly superior and inferior domains and domainers need to be able to differentiate between them if they don't want to lose money.

 

[blogspotter]

But that was the entire premise of the argument. You said it's not possible to evaluate a domain name due to the randomness of the sales. I claimed that it is, as clearly evidenced by patterns above.

My point is, "a domain is worth whatever someone is willing to pay for it" is a non-genuine response as there are clearly superior and inferior domains and domainers need to be able to differentiate between them if they don't want to lose money.

I still don't get what is the disagreement


Inferior and Superior domains are of course there, but that is not the point. All domain pricing is still arbitrary.
Which is also why Auction is so common in the domain industry. Auction is nothing but price discovery. How much a buyer is willing to pay. The rest of the all high value sales are nothing but salesmenship. How good you are in persuading someone who has no idea about the domain industry in buying something you just picked up for 1200 in an auction a few weeks back. because if the buyer was aware of how the industry works, he would have been in That Auction.

Again, saying that Insurance.com is more expensive than Bacassurance.com is not a pattern