discuss Is the enduser market for .com brandables dying?

[hookbox]

The market for top notch .com brandables will always be good but I'm not talking about top notch brandables. Second and third tier names that typically sell in the $1,000-$2,500 range are the ones I am referring to. The names on the "Big Three" brandable marketplaces have what I would consider second and third tier names. These are the group of names that most of us own in large quantities. The made up 5,6,7 letter name or the two word combo are what I'm talking about.

Every day I see more and more startups using .co, .io, .me etc........With the widespread adoption of alternative extensions, I believe, it is causing the market for second and third tier names to slowly die. It seems like many startups are choosing to go with other extensions to not only save a couple thousand dollars but also to get a much better name because the quality of unregistered domains in alternative extensions is so much better. Every time a startup chooses another extension it's another nail in the coffin for the brandable market.

What are your thoughts?

 

[golan]

People / businesses / startups who have a clue, even if they go with some fancy marketing ideas with .io, .us etc etc, will ALWAYS secure their .com for themselves. Serious people think into future. If you can't secure your .com, you don't start the business by this name. Period.

 

[BrandClub.com]

People / businesses / startups who have a clue, even if they go with some fancy marketing ideas with .io, .us etc etc, will ALWAYS secure their .com for themselves. Serious people think into future. If you can't secure your .com, you don't start the business by this name. Period.

Absolutely true ...

 

[Kate]

I have seen a dropoff in .COM sales since the launch of new TLDs. I believe this is a combination of two factors:

1) most domain sales are between domainers so with so many domainers focused on the latest new TLD launch over the last two years, they are spending thousands on new TLDs and have less money to spend on aftermarket .COMs.
...

I think this is a very important statement.

My theory is that the domainer market crashed because of new extensions. I would say around 2008, when the financial crisis struck. But 2008 also witnessed the crash of .mobi, a much-hyped extension in which some domainers have lost 6 figures.
There have been more extensions released afterward, roughly one every year: .tel .xxx .me .co .asia etc that are more or less all toxic, and now we have a cornucopia of new extensions that likely don't have a bright future.
Domainers have wasted a lot of money on new extensions. They have been distracted. They now buy from the registries/registrars, that are in fact the new domainers, whereas they used to trade among themselves. Ten years ago, the D2D market was livelier.

Fortunately, the end user market still exists. Buy wisely, and you'll make sales.
Brandables will always be in demand because businesses like to differentiate themselves from the competition and the key is getting domain names that are somewhat unique.

 

[NameOmnia]

I think it is a combinations of different factors.

First of all I do not think that brandable market and sales are slowing down, especially if we are talking about .com which is where serious business always end up to ( see f.e. delicio.us that had to buy the .com and become delicious.com because their users couldn't get the other one... )

I also think that way too many names on BB ( I do not even consider the other 2 ) are actually 7th 8th 9th tier domains that simply contribute to bury the decent/good ones. Their inventory has become too big.
You can find better brandables for sale on Ebay than on BB.

Domainers have less money. People have spent a lot on names that do not sell therefore there is no portfolio turnover. If, in 100 sales, 95 happen among domainers we shouldn't be surprised to see an apparent decline.
Reality is that without sales to other domainers many of us would be out of business and only those who have top premium names that REALLY sell to end users could survive.
If I look at my sales, having only worked with brandables and short names, I have had some very nice end user sales but I am honest in saying that they wouldn't have been enough to keep me going if I didn't have all the other "among domainers " sales.

Real 2nd tier domains ( but maybe we should be more clear about what we mean by this ) will sell I believe but maybe the problem is that people tend to have a very broad idea of what a brandable name is and end up calling "brandable" anything under the sun and more.

 

[Doron Vermaat]

You can't base what startups are choosing as an extension solely off only newly funded startup stats. It may be that 75% of startups that get funded use a .com but what about the thousands of other companies that don't get funded because they are using an alternate extension.

I believe looking at newly funded startups is a very good indicator. Companies that don't have VC backing are usually non-tech focused and I expect the percentage of .Com use to be even higher in that group. I don't see the local florist or regional law firm going for a .io or .me domain that often. They tend to stick with .com or a .net

Also, companies don't get funded based on the choice of extension of their domain name. The amount of money raised by companies that use a .Co or .Io domain is massive.

 

[disaac81]

I believe looking at newly funded startups is a very good indicator. Companies that don't have VC backing are usually non-tech focused and I expect the percentage of .Com use to be even higher in that group. I don't see the local florist or regional law firm going for a .io or .me domain that often. They tend to stick with .com or a .net

Also, companies don't get funded based on the choice of extension of their domain name. The amount of money raised by companies that use a .Co or .Io domain is massive.

Totally agree.

Branding is all about presenting your business in a way that communicates the right messages to the right people (or the whole world). Just as words and word soundings create different feelings, so to does the extension within the domain name.

supercars.com - Strong, powerful products backed by a brand name delivering on promise.

supercars.whatever - Yeah, we sell super cars, not really sure how serious we are though since we could not be bothered to put out a strong brand message.

 

[garptrader]

If a domainer acquires a phenomenal name on the drop say via backorder ($XX cost) they might be willing to part with it for $XXX to another investor who believes that long-term they can sell it for $XXXX. However, without a few end user sales an investor will lose confidence in their ability to sell a domain at an eventual profit. In that case, no domainer is willing to pay ten times what another investor paid since they have no confidence in selling that type of name. Given that portfolio turnover was already 1-2% annually prior to the new TLDs, what happens to portfolio turn now that many millions of investor dollars have been sunk into new TLDs with renewals of those domains (ten million nTLDs x % held by investors x $$ average renewal) also being a drag on resources?

 

[garptrader]

Last night my wife was watching a movie on the laptop while I saw a football game on TV (sound off). During a break, a Godaddy commercial comes on advertising...

Get your .COM domain for $2.99 for the first year.

Price expectations get set very low by Godaddy so small business end users have sticker shock when they are presented with actually having to pay one thousand times that for the .COM domain they want. Of course even aftermarket NTLDS are typically being priced much higher than $2.99.

 

[S-B]

I see demand increasing for 1-2 word brandables.

 

[hookbox]

I believe looking at newly funded startups is a very good indicator. Companies that don't have VC backing are usually non-tech focused and I expect the percentage of .Com use to be even higher in that group. I don't see the local florist or regional law firm going for a .io or .me domain that often. They tend to stick with .com or a .net

Also, companies don't get funded based on the choice of extension of their domain name. The amount of money raised by companies that use a .Co or .Io domain is massive.

There are thousands of startups created everyday and a very small amount of them actually get funded and that's why I said it's not a very good indicator. Maybe one out of every thousand get funded so what about the other 999. When you look at new startup lists and their company names you will see that .co, .io and .me are everywhere. These are the sales we are losing because they have decided on another extension other than .com. I believe .io, .co and .me are taking away more and more sales everyday by those startups just hand registering a good name they want instead of paying a couple grand for the .com. The more startups see alternate extensions in use the more sales we will lose out on.

Here is a link to a list of some new startups and their domain names.

http://startupli.st/

 

[garptrader]

Here is a real world example I saw while walking in downtown West Palm Beach in a high-pedestrian traffic area with numerous restaurants. There was a smart car parked which had been painted specifically to promote the business NerdsOnSite.com. Assume the car and insurance cost several hundred dollars monthly to rent. The paint job probably several hundred more. This business' services are normally billed in the $75-$100/hour range. The company seems to have numerous offices across the US and even in other countries. The domain is brandable - reasonably short and memorable but not of the caliber which indicates they paid serious money for it (Nerds.com or ITSolutions.com etc). If you happened to reg it for $10 and renew it till they came along, they might have paid a few hundred dollars for it. But the more likely scenario is they would have chosen another reg fee option even though their business likely generates millions of dollars annually in sales and probably spends thousands annually in marketing/advertising costs.