sales Part 2 - How to Price Your Domains for any Market

[Whizzbang]

This article continues directly on from How to Price Your Domains for any Market

One possible way to derive the mid-point number is to examine the average advertising spend by market vertical. We can then pin the mid-point for this data as being worth $2,000.

The below chart shows the “drink” category as being at the approximate mid-point in spend. This would suggest that domains above this category would have a higher mid-point value and domains less than this category a lower mid-point value.

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[frank-germany]

This article continues directly on from How to Price Your Domains for any Market

One possible way to derive the mid-point number is to examine the average advertising spend by market vertical. We can then pin the mid-point for this data as being worth $2,000.

The below chart shows the “drink” category as being at the approximate mid-point in spend. This would suggest that domains above this category would have a higher mid-point value and domains less than this category a lower mid-point value.

Read More >

do you really think

SecondMortgage.com has a lower value then
Refinancesecondmortgage.com ?????

I would stick with estibot

SecondMortgage.com estibot $122.000 USD
RefinancesSecondMortgage.com estibot $1.400 USD

excell can't help you to find a value of domain
oherwise estibot would be a wellknow exact tool

 

[Whizzbang]

I would normally have the same reaction as you are but what I'm seeing is what the numbers are telling me at this stage of the exploration. What I don't know is how many offers are made on secondmortgage.com and what their values are.

I could be completely wrong but at the same time I think there is some logic to the direction that I'm headed. I also think there are many other variables that need to be explored.....

 

[frank-germany]

what I'm seeing is what the numbers are telling me at this stage of the exploration...

thats my main concern

numbers are numbers nothing more
you need to add common sense and intuition
to make the prices fit

logic is not your best friend when it comes to find a price tag
a price always needs to fit the buyer - and the seller

obviously
SecondMortgage.com
is much more worth

as its shorter:
that indeed is all you need to know

its a better factor then
all search and CPC numbers

and additionally SecondMortgage.com a category killer domain

to me it looks like you are missing the domain
when it comes to evaluation

 

[Whizzbang]

Until I've done this research I would have completely agreed with you....shorter is better. What I'm seeing at the moment is marketers not necessarily agreeing with that axiom. In fact, they are purposely bidding down "second mortgage" in the keywords compared to other keywords that may be longer (some are shorter).

Like I said in the article, it's less about the traffic and more about the conversions. A shorter domain may bring traffic and brand recognition but it doesn't necessarily mean that people will buy. It could be the traffic is all people just looking.

As I also said in the last article.....this is only one component of pricing. The other involves smart negotiating skills...!

There's one thing for sure......it's almost as if there needs to be a PHD done on this subject as it's intriguing to the extreme.

 

[frank-germany]

but anyway thanks

I bought
SecondMortgageLoans.net
based on your article

must be worth a lot

 

[TRY]

Researching the numbers and trying to appraise a name that way may work for domain names that have no meaning such as random LL, LLL, LLLL, NN,NNN, LNN, etc.... but when your dealing with Words the numbers behind them are not that important unless it's a subpar name. I'm going to read your article now.

 

[TRY]

Apples and Oranges, here's why it doesn't make sense.

Advertisers value people searching for the keyword combos "personal loans" and "business loans" more so than "loans" because it's more specific and the ROI is higher But Loans.com is more valuable as a domain name.

Shorter is better, some long tails 4, 5, 6 keywords search queries are more valuable to advertisers than one word generics, it doesn't mean they are more valuable as a domain name.

 

[Whizzbang]

Apples and Oranges, here's why it doesn't make sense.

Advertisers value people searching for the keyword combos "personal loans" and "business loans" more so than "loans" because it's more specific and the ROI is higher But Loans.com is more valuable as a domain name.

Shorter is better, some long tails 4, 5, 6 keywords search queries are more valuable to advertisers than one word generics, it doesn't mean they are more valuable as a domain name.

I agree with you that anecdotally shorter is always better......but I actually don't have any hard cold evidence to back that up when it comes to keyword domains. I think many people have worked under the assumption that shorter is always better. They do the survey of one (ie. themselves) and make a supposition from there that everyone behaves in the same manner.

I think that what needs to be tested is whether shorter brings more traffic but not necessarily more qualified business. In fact, the keyword demand curve suggests marketers have worked this out for some keywords.

The challenge is that many domain investors have based their investments upon the supposition that shorter is better. If this is not necessarily the case then there could be blood in the water.....

In the meantime, I'm going to keep on digging into the data.

 

[168]

It is indeed true that shorter is not always better.
A recent notable example reported here is NYTimes.com and NYT.com
NYT.com is used as a redirect
There are some "shorter" New "G"s that have sold for higher values than the exact match .com
but a relatively large populous would choose .com version over the shorter New "G" version.
Wasn't that long ago shorter=better "only" applied to letters or words in .net/.com
Short numerics, combos, hyphens, cctlds weren't worth much until a few years ago and now worth much more!
Not all shorts in the same categories fall in the same value range. 4L is a great example. 400-40k+
Thousands of examples of longer having greater value than 3-4L
Brandingtheweb's example: keyword combo's -higher ROI should be more valuable than a shorter 1 word keyword
shorter may be better for branding value and worse for search value, keyword combos would carry a better overall value.
There is also recent sales from 25k-100k+ shorts that are fail listed with google search- that should be a factor in value.

"examine the average advertising spend by market vertical"

I think the ROI on the average ad spend x ? years would be a better indicator of value to the end user.
A domain is used repeatedly long term and other ad spend is short term and changable approaches.
average ad spend by market vertical doesn't account for how it's spent and what % is related to the domain only
These are just some of many examples where logic breaks down as Frank-Germany suggested the price fits the buyer and seller
As a seller I want to find the buyer with the highest ROI potential to justify in a professional way, the highest ROI potential to me as well. If I can demonstrate a higher ROI in ad spend over time, + as a result an increased asset value vs ad spend liability that has zero recoup value the buyer can more easily justify a higher budget to whomever has the true go/veto power.

Using raw data may work for the low end sales but there are so many nuances associated with higher value sales say 10k+ I don't think it would be any more useful than estibot and places like huge domains, brandbucket and the like have already created
value ranges for the low end
Keep digging ! Always interesting what people find and thanks in advance for taking the time.
Greatly prefer facts over fiction
Cheers

 

[frank-germany]

the worth of a domain only depends on the buyer
and the seller

the discussion here
is like the blind guiding the lame

 

[Whizzbang]

the worth of a domain only depends on the buyer
and the seller

the discussion here
is like the blind guiding the lame

Don't be ridiculous....suggesting this can be viewed as insulting a lot of very smart people who are openly sharing their thoughts on a really tough problem. By saying such things encourages people to not share for fear of being ridiculed. In my book, all opinions should be listened to and treated with respect.

 

[frank-germany]

Don't be ridiculous....suggesting this can be viewed as insulting a lot of very smart people who are openly sharing their thoughts on a really tough problem. By saying such things encourages people to not share for fear of being ridiculed. In my book, all opinions should be listened to and treated with respect.

the value of a domain is only determined by the buyer and seller
and depending who the both parties are - the price may differ a lot


no matter how much excel you use

 

[168]

the worth of a domain only depends on the buyer
and the seller

the discussion here
is like the blind guiding the lame

OK so by your "only"- solution, a shi*y seller lacking in skill + a buyer determines market value?
How about flippers who don't care about value ?
A desperate seller + an opportunist = value?
Drops ? Value=0 because there was no buyer?

Your point well taken. Lame but if it works for you great! This isn't what I would present to a potential buyer to determine value.
Insults determine the value of the message. Thanks for pointing it out.
If your "only" approach is clearly the "only" solution then maybe it's a good time for you to walk away. Your work is done.
Cheers

 

[frank-germany]

OK so by your "only"- solution, a shi*y seller lacking in skill + a buyer determines market value?
How about flippers who don't care about value ?
A desperate seller + an opportunist = value?
Drops ? Value=0 because there was no buyer?

Your point well taken. Lame but if it works for you great! This isn't what I would present to a potential buyer to determine value.
Insults determine the value of the message. Thanks for pointing it out.
If your "only" approach is clearly the "only" solution then maybe it's a good time for you to walk away. Your work is done.
Cheers

if you doubt my approach
for a moment
just imagine Rick Schwartz being the seller
or Mike Mann

now watch the impact on the domain value

 

[TRY]

I agree with you that anecdotally shorter is always better......but I actually don't have any hard cold evidence to back that up when it comes to keyword domains. I think many people have worked under the assumption that shorter is always better. They do the survey of one (ie. themselves) and make a supposition from there that everyone behaves in the same manner.

I think that what needs to be tested is whether shorter brings more traffic but not necessarily more qualified business. In fact, the keyword demand curve suggests marketers have worked this out for some keywords.

The challenge is that many domain investors have based their investments upon the supposition that shorter is better. If this is not necessarily the case then there could be blood in the water.....

In the meantime, I'm going to keep on digging into the data.

Your data is interesting, thank you for your effort. The data does help identify valuable keywords and regardless of what Google says it does help to have it in your domain name for SEM, one factor is the domain name will be more relevant to the search term and users will click on it more often. Higher CTR, lower costs, etc. In the end higher r.o.i.
Some marketers use this approach with Multiple Domain Names. Although these domain names may entice a user to click on it in SEM most times they are not ideal for other types of marketing. The types of names used mostly for SEM purposes imo can be valued this way, but a general purpose domain name will need a human touch, IMO.

 

[TRY]

It is indeed true that shorter is not always better.
A recent notable example reported here is NYTimes.com and NYT.com
NYT.com is used as a redirect...

In this case only the ny times would think nytimes is more valuable than nyt. Good decision imo for them to use the exact match, no need to explain where the domain goes to.

 

[168]

if you doubt my approach
for a moment
just imagine Rick Schwartz being the seller
or Mike Mann

now watch the impact on the domain value

No I don't doubt your or any one else's approach I have had
great experiences with many fine negotiators.
Rick and Mike +you if your like them are naturals.
So am I in a different way. I go the extra mile for better
awareness and referrals.
There are a lot of people in this business that most likely
will never be great at negotiating.
Providing examples for different approaches is a simple
pay it forward to improve the industry and bring base
pricing up for reasons most can understand.
IMHO places like HugeDomains, and others are
"setting" a low base in the 2-3k range
Costs are going up pricing should reflect
some of those increases.
To suggest there is only 1 way is absurd.
Start with, bring every ethnic group to
one table and there will be very different
effective styles.
Happy Hunting

 

[frank-germany]

No I don't doubt your or any one else's approach I have had
great experiences with many fine negotiators.
Rick and Mike +you if your like them are naturals.
So am I in a different way. I go the extra mile for better
awareness and referrals.
There are a lot of people in this business that most likely
will never be great at negotiating.
Providing examples for different approaches is a simple
pay it forward to improve the industry and bring base
pricing up for reasons most can understand.
IMHO places like HugeDomains, and others are
"setting" a low base in the 2-3k range
Costs are going up pricing should reflect
some of those increases.
To suggest there is only 1 way is absurd.
Start with, bring every ethnic group to
one table and there will be very different
effective styles.
Happy Hunting

are we talking about domain prices/valuations?

or about a fool prove way
to find a price?

I would prefer estibot in that scenario

but as you know it will be wrong

 

[MapleDots]

It is indeed true that shorter is not always better.
A recent notable example reported here is NYTimes.com and NYT.com
NYT.com is used as a redirect

It makes sense to use your brand, I tell that to clients all the time. You don't need just letters, branding works best.

 

[168]

are we talking about domain prices/valuations?

or about a fool prove way
to find a price?

I would prefer estibot in that scenario

but as you know it will be wrong

Yes.
I believe no formula or bot could be accurate enough
I don't believe one can replace "the dialog" that happens
in each sale
I would prefer domainers get a better understanding
of why a domain has value to better negotiate
in a higher range because more often now comps are being
used which is better than estibot IMO but still not representative
of value. So my thought is move toward getting comps up.

 

[Whizzbang]

Yes.
I believe no formula or bot could be accurate enough
I don't believe one can replace "the dialog" that happens
in each sale
I would prefer domainers get a better understanding
of why a domain has value to better negotiate
in a higher range because more often now comps are being
used which is better than estibot IMO but still not representative
of value. So my thought is move toward getting comps up.

I agree that nothing can replace a good negotiator. The challenge is that we also know that domains that are priced sell more than domains that aren't. So if you wish to sell more domains then how best should you price them? The problem I see with comparables is that the whole selling proposition for a domain is that it's unique.....as soon as you bring in comparables you undermine this position. An interesting and difficult problem that needs our ongoing collective input to generate a better outcome.

 

[frank-germany]

The problem I see with comparables is that the whole selling proposition for a domain is that it's unique.....as soon as you bring in comparables you undermine this position.

good point

So if you wish to sell more domains then how best should you price them?

if you want to sell many domains just a $1 USD to your buying costs

who wants to sell many domains?
that sounds like work to me

for me its about making a decent profit when I sell a domain to an end user

 

[168]

I agree that nothing can replace a good negotiator. The challenge is that we also know that domains that are priced sell more than domains that aren't. So if you wish to sell more domains then how best should you price them? The problem I see with comparables is that the whole selling proposition for a domain is that it's unique.....as soon as you bring in comparables you undermine this position. An interesting and difficult problem that needs our ongoing collective input to generate a better outcome.

totally agree domains should be priced. Make offer is out of line with how the general public operates when buying just about
anything. Agree with the problem of comps. This is why I believe if a process can be developed for domainers to make a generalized valuation in their unique circumstance + comps as a range factor we could achieve improved cohesiveness in values.
The comps are only a consideration because buyers can access them and that is what mainstream uses routinely regardless of
what domainers think of those comps. It's simple enough to sell comps as one of many tools of evaluation and not the end all.
Most people also get that values fluctuate according to market conditions for various products so I don't see them as a negative.
So I'm thinking like cars or houses or commercial space- there is a high end and low end and the middle is wide. I believe,
we, to some degree have established both the high end and low end and still experimenting with the middle. I don't think the low end is worth including mostly because it should be obvious to the average person, there is a lot available for the low budget buyers.
Where does the middle start? - this seems to be in the 2-3k range on the markets. . I would like to see domainers challenge this base @ 5-6 range,
Simply a starting point test. The rest is up to the seller/buyer.
I think most mid range domains should start @ 10k+ because of the endless marketing value to a business, it's a reasonable starting
point for the low end of the mid range and a doable budget either all at once or over 1 yr.
The high end is relatively small in comparison so no process here as most high end are sold by experienced domainers anyway and maybe this is where make offer would still make sense.
Back to the priced suggestion- If selling platforms required pricing, then the available's on the platform could be presented by price range in many verticals like , shorts, brandables, tech, finance, etc. easy way to educate buyers and seller would be free to adjust at any time
So maybe start with a poll on required pricing, seller deciding what range to post in and if adopted over time domainers will have for sale comparisons to help evaluate what range / vertical they believe their domain should be listed in.
What if a true mid range wants to be listed in high value ? What other issues could be associated with vertical pricing?