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I have been trying to make sense out of the domain pricing/value discussions without a lot of luck. It just hit me that there are many similarities to our experiences buying Navajo Rugs at auction in the 1970's.
The auctions were held near Gallup, NM. The weavers would bring the rugs in to be labeled and verified for authenticity and then put out on tables for buyers to examine. There would be 150 or so bidders and perhaps a thousand rugs to be sold in one evening. Those of us who were serious collectors would arrive early, carefully examine each rug for size, shape, colors, quality, etc. and make a list of those we liked.
When the sales started we quickly noticed that quality increased much faster than price. There were lots of bidders willing to pay up to $100 for a rug, but as the price rose above that the number of bidders quickly declined. Keep in mind that when the price got above $1,000 there were few bidders but these were museum quality rugs. You could buy top end rugs for 25% of what retail dealers in Albuquerque would charge. So, for a collector, this was a great place to buy.
However, those great, but expensive rugs come with their own set of problems. Displaying them requires a lot of space since they would be 8' x 10' or larger. They aren't very liquid. Ebay hadn't been invented yet so it was hard to find buyers. In 1970 $1,000 was a months pay. So the market was very limited.
We also noticed there was one guy who always arrived late, never looked at the rugs before the auction, who would bid on anything that was cheap. He didn't care if the colors were dreadful and/or the weaving careless. Those of us who appreciated quality despised him because it seemed like he degraded the craft and encouraged junk.
We later learned he owned a shop along one of the busy tourist highways in Northern New Mexico. His market was visitors who wanted to buy a genuine Navajo rug but neither knew or cared anything about quality. Price was really the only thing that mattered. Thirty years later I still have my museum quality rugs and he sold his and retired years ago.
Want to guess who made the most money
How does that compare to the domain market. Everyone loves a short, relevant dot com. For the right buyer they make a lot of sense. However, I think the potential ROI at the cheap end is under appreciated. There are tons of small business that just need a place to publish their hours and location for local customers. Contractors, cleaners, florists, restaurants all come to mind.
If an existing customer needs to see when you are open, it doesn't matter if your domain is word-word-word.biz because he will be entering it by looking at it on your business card or his last receipt.
The auctions were held near Gallup, NM. The weavers would bring the rugs in to be labeled and verified for authenticity and then put out on tables for buyers to examine. There would be 150 or so bidders and perhaps a thousand rugs to be sold in one evening. Those of us who were serious collectors would arrive early, carefully examine each rug for size, shape, colors, quality, etc. and make a list of those we liked.
When the sales started we quickly noticed that quality increased much faster than price. There were lots of bidders willing to pay up to $100 for a rug, but as the price rose above that the number of bidders quickly declined. Keep in mind that when the price got above $1,000 there were few bidders but these were museum quality rugs. You could buy top end rugs for 25% of what retail dealers in Albuquerque would charge. So, for a collector, this was a great place to buy.
However, those great, but expensive rugs come with their own set of problems. Displaying them requires a lot of space since they would be 8' x 10' or larger. They aren't very liquid. Ebay hadn't been invented yet so it was hard to find buyers. In 1970 $1,000 was a months pay. So the market was very limited.
We also noticed there was one guy who always arrived late, never looked at the rugs before the auction, who would bid on anything that was cheap. He didn't care if the colors were dreadful and/or the weaving careless. Those of us who appreciated quality despised him because it seemed like he degraded the craft and encouraged junk.
We later learned he owned a shop along one of the busy tourist highways in Northern New Mexico. His market was visitors who wanted to buy a genuine Navajo rug but neither knew or cared anything about quality. Price was really the only thing that mattered. Thirty years later I still have my museum quality rugs and he sold his and retired years ago.
Want to guess who made the most money
How does that compare to the domain market. Everyone loves a short, relevant dot com. For the right buyer they make a lot of sense. However, I think the potential ROI at the cheap end is under appreciated. There are tons of small business that just need a place to publish their hours and location for local customers. Contractors, cleaners, florists, restaurants all come to mind.
If an existing customer needs to see when you are open, it doesn't matter if your domain is word-word-word.biz because he will be entering it by looking at it on your business card or his last receipt.
