Prices are coming down for domain names

[mole]

Have you noticed how cheap it is to catch dropping .COM names for $60 or less nowadays, or how cheap people are selling domains on forums like this?

Contrary to popular (read speculative/euphoric) belief, .COM names are actually plummeting in value. With .XXX being introduced soon, the dive will be even more.

The so-called sales you see is only SYMPTOMATIC that those who got their names early in the game are now trying to liquidate what they have for whatever they can get, as compared to the no big money no name position they took in past years.

 

[SharonTucci]

Have you noticed how cheap it is to catch dropping .COM names for $60 or less nowadays, or how cheap people are selling domains on forums like this?

Contrary to popular (read speculative/euphoric) belief, .COM names are actually plummeting in value. With .XXX being introduced soon, the dive will be even more.

The so-called sales you see is only SYMPTOMATIC that those who got their names early in the game are now trying to liquidate what they have for whatever they can get, as compared to the no big money no name position they took in past years.

I don't believe this is the case at all. I've been 'active' in the domain market now since 2000. This year, I've had higher sales than I have had since 2001. I actually had my biggest personal sale ever this week.

I think what IS happening is that sellers are willing to sell for more realistic prices than they were previously. There are only so many buyers with deep pockets after all. There's a nice middle ground market of domain sales in the $1k-$2k range going on. I know a lot more people today making fairly good full-time incomes in the domain business than I did 4 years ago when bigger sales were more common.

On the DNJournal reports.... keep in mind those are only top of the line sales and not all domain sales get reported there. I've had many sales (and brokered many) that were not through auction/domain channels and not reported to any third party yet would have made the weekly reports. I'm sure there are a lot of others in the same boat. Often corporate buyers will require privacy. If I turn around and provide the sales data to a third party source, then it's obvious to know what the company paid for it. Not all companies want domain acquisition numbers made public (for a variety of reasons).

There's also the domainer mentality where you pick up a decent domain name and expect to make a small fortune for it or you get crap names and then say the industry is in a decline because you aren't able to sell a domain over $100 (or less).

So, yeah, lots of speculators are letting stuff drop left and right and not because there is no demand on behalf of buyers, but either because the asking prices were unrealistic or because the domain sucked to begin with.

To give you one example: I registered a domain that a speculator dropped. They had been asking $2k at Sedo for it. I sold it for $400 a few days after registering it. The person that let it drop could have paid their < $10 renewal fee to keep it and made a nice $390 profit instead of having unrealistic expectations.

I guess what succeeding in this industry comes down to a few things:

1. Decide whether you are going to treat this as a hobby or as a business. If you go with it as the latter remember if you aren't selling your domain to someone else, you are buying it yourself. Look at your portfolio and your asking prices: would YOU pay those prices for your domains? That is always always the thing I keep forefront in my mind.

2. Decide on a focus for your domain collection. It will make it easier to keep track of trends, to know when there are good buys in the secondary market and to have a better understanding of buyers in that market.

3. Set realistic numbers for asking prices. Internally, we have a database where we keep our asking prices and bottom line of what we will go for. And yeah, we will sell at bottom line. I pay $8 or so for a domain and someone offers me $500 for it versus MAYBE selling it in a year for $20k... damn straight I'll take the $500 now. With the $500, I keep about 150-200 of it and reinvest the rest between new registrations, acquisitions and renewals.

Does this strategy work for me? Well, I let drop maybe 1 in 20 domains I register. I slowed down on acquisitions between late 2001 and early this year. But I managed to sell 1 in 3 domains that I did register. I think the lowest price I sold a domain for during those years was 105-110 at Afternic (had forgotten to set a reserve).

4. Learn the art of negotiation. I do broker the odd sale for clients. One asked me to make an inquiry about a domain on their behalf. The person had no sales price listed, so I started off with $50 to at least get an idea of where they were. Instead of counter-offering with something, they just declined the offer and said it was at least $X,XXX. Well, heck, my client would have gone to low $1X,XXX for it. Now that domain owner has lost a sale. (I told the client about this and they said not to bother submitting a new offer.)

Okay I'm getting off my soapbox


P.S. Updating this because I neglected to include one other possibility - looking at domains as an investment. After being up 12 hrs already, I am too beat to think about commenting on that

 

[equity78]

POST OF THE WEEK I AGREE WITH YOU ENTIRELY SHARON, AND THOUGHT THERE WAS AN AGENDA to the Original post not that Mole ever has an agenda. J/k MOLE

 

[Auction]

If you are a new extension supporter: the problem with them releasing so many new extensions (as someone indicated above) is who in the world besides domainers are going to remember them all? IMO new extensions will not dilute the .com market in the long run (maybe not even in the short run).

 

[dochlaggie]

I believe .com will always be king!

Drive around in your car in any city and everyone and there dog is displaying there www address.
Maybe prices are stabilizing and we will never again see some of the huge prices of the past, but i feel domain names are on the move. Next year will be a good year for domains.
Why would you register for instance www.iliveinmaplecourtspringsontheninthofspetemeber.com or www.maplespringssept.net/net/biz/ws and loose business to the .com or use the long long com and loose business because no one could find you, when you could pay say 1 or 2 k for a good .com name for your business??

Everything has a boom and bust cycle. I feel that we are just entering a boom period [ well a boom period in comparison to the last 4/5 years].

 

[skyraider]

I wish .sc reg fee would drop! I could register so many dot South Carolinas...

 

[barefoottech]

What is Happening is people are Realising Quality wins over Quantity Everytime
It is Better to Pay Top Dollar for one Great Name then for a Collection Of
Lousy Names
Just Because !*#.COm (Example Only) is 3 Char doesn't mean it has Any Intrinsic Value so Inflated Value based on Being 3Char will Drop over Time
But something Like ParaGuay.com has Real Value
Case in Point Google.com is Worth Way more than Any 3Letter .com Could ever hope to Achieve

 

[slaughterbeck]

What is Happening is people are Realising Quality wins over Quantity Everytime
It is Better to Pay Top Dollar for one Great Name then for a Collection Of
Lousy Names
Just Because !*#.COm (Example Only) is 3 Char doesn't mean it has Any Intrinsic Value so Inflated Value based on Being 3Char will Drop over Time
But something Like ParaGuay.com has Real Value
Case in Point Google.com is Worth Way more than Any 3Letter .com Could ever hope to Achieve

Are you sure? I kind of like Xkt.com!

 

[Zeeble]

What is Happening is people are Realising Quality wins over Quantity Everytime
It is Better to Pay Top Dollar for one Great Name then for a Collection Of
Lousy Names

I believe that that is not quite the whole story. I would NEVER pay $2k for a domain. The only possible time that I would is if I couldn't ANYTHING else for branding purposes. Most people won't pay above $400. Most of the big figure sales seem to be speculators hoping that the domains value will increase over time.

Just Because !*#.COm (Example Only) is 3 Char doesn't mean it has Any Intrinsic Value so Inflated Value based on Being 3Char will Drop over Time
But something Like ParaGuay.com has Real Value
Case in Point Google.com is Worth Way more than Any 3Letter .com Could ever hope to Achieve

Exactly! That is what is leading to the demise of the .com. They have inflated value, which is why they are losing value. People are only buying to resell, no real potential for an end user. The same thing is happening to the .com as happened to the stock market in '29. Same problems, same result (except, not so severe because they do still hold value).

 

[enetwork]

The real issue here that everyone is overlooking is traffic. Does the domain get traffic or does it not. It can be any extension but the fact is generic .com domains are the domains that bring in the most traffic, period. Most of the people buying domains base the amount they are willing to pay on the amount of traffic a domain produces and the amount PPC search engines are paying for that traffic.

This argument that .com is losing any value is completely baseless. When you start seeing PPC prices falling drastically or type in traffic going down, you can then make this argument. Until then there is no argument.

All indicators for the forseeable future point to PPC rates only going up.

As long as there are domains with traffic and companies willing to pay for that traffic, there will always be valuable .com domains and they will continue to get even more valuable.

 

[barefoottech]

As long as there are domains with traffic and companies willing to pay for that traffic

My point exactly .
People will only pay top dollar for Intrinsic Value
The Name on it's own has no value if no-one Visits the Developed site or
Needs the Undeveloped Domain Name
Good Names Will Appreciate in value
Lousy Meaningless Names Regardless of ext Will Depreciate

 

[EbookLover]

I wish .sc reg fee would drop! I could register so many dot South Carolinas...

Now, you bring up a good point here. You called .SC "south Carolina". However, many call it SOURCE or maybe a cc for some country I cannot think of right now. This, I believe is one major problem with domains today. I mean, how are people supposed to remember extensions when they hear so many different meanings to one extension, that is if they even heard of the ext at all. (“people” being the everyday guy who knows zilch about domains).

Now, as we all know, .COM is widely abused, too. I mean think of all the non-business .COM sites out there. TO the best of my knowledge, .COM stands for commerce or commercial, which, when you think about it, those words are not widely used by consumers when pertaining to buying a service or a product (this is why I like .SHOP foir ecommerce). When I think "commerce" I think more like B2B commerce, not really B2C or even C2C.

Think the only reason why .COM is still so popular is because that is the first real heavily marketed ext. Just a few years ago it was all .COM this nad .COM that. The .COM bubble burst, travelocity.com, priceline.com, espn.com, and so on. Walmart.com, hotmail.com, google.com. See were I'm getting at? Everything (in USA at least) is mostly .COM when you hear the media.

So basically, the problem lies in the fact that ICANN (or whoever else) was not looking ahead enough into the future. They did not release great extensions like .XXX and or even .info (which I think is a decent ext). The public got too used to the few extensions that were released from the start, mainly .COM. It boggles my mind to think that organizations that control these extensions did not see this mess coming a mile away. It really is a mess as far as categorization and familiarity is concerned.

Case in point is .XXX. No I do not want to discuss .XXX again, but it is a perfect example. Despite the legal problems of .XXX, .XXX is truly a great extension. Everyone knows what XXX stands for. even if XXX stands for "poison" to some, it is still something that is "restrictive" and perhaps even "taboo". IMO, .XXX is the greatest extension out there (and it isn’t even "out there" yet). It is easy to remember because the "term" XXX or "triple X" is used widely around the world.

So since .XXX was never released, the porn biz and other adult biz went for the “king of extensions" .COMs. And who can blame them? it's too widely recognized to go with any other domain when you are selling something on the internet.

This is the case for most all extensions other than .COM, .Net, .ORG, and even .INFO. Simply not enough average "joes” know about them or know what they mean or stand for. Some might even think that anyone who does not use a .COM or other very familiar ext is a scammer. I don’t doubt that to be the case at all.

So, it would be logical to think that it will all get ironed out as time goes by, but the problem is that too many unpopular ext were release in too little a time. Instead of focusing on a few memorable ext, they instead made the whole mess even messier by overwhelming the market with too many extensions, that for the most part, are never really gonna make it in the minds of the average web user. .BIZ comes to mind. I mean, what cannot be construed as a business? Even a non-profit is a business. Heck, corporations operate much like a non-profit, and vice versa. The only difference it that the non-profit disburses money by the end of the year because they are not supposed to show a profit. Corporations disburse all the money by the end of the year in bonuses to the "chosen" few at the top in order to avoid heavy taxation on all monies "leftover". .BIZ is a terrible extension, IMO. Too general.. It would be like .web or .internet (although, .web is kinda neat actually).

I do believe that it is possible that all these newer exts are making .COM prices plummet, but not really to the extent the OP makes it seem. I think that any drops in prices are more due to economical frustration and uncertainty more than it is that they are being diluted by other exts.

IMO, I think .COM is, and will be for a while, a great ext to invest in. All this categorization mess brought on by lack or foresight in the domain industry. At this rate, it will be a long time before the web people start using exts rightfully to suit the site. People (web surfers) have to get used to these ext and understand what they mean before this can ever happen. As it stands now, it is foolish mistake for, say, an ecommerce site to use anything but .COM, simply for it's wide popularity.

As an example, I, as an American (and pretend I am not into domain trading), if I am looking for brown socks for whatever reason, and if the searches bring nothing and I am reduced to randomly typing in domains to see if I can find any brown socks, I am going to do the following...

I would first type brownsocks.COM. Nothing. OK. Then .NET. Nothing still. Then. ORG. No go. .INFO? Nothing again. .US....well forget it. Last resort, I might even try .GOV for shi+$ & giggles and also because I just heard a .GOV URL on a PSA on the radio or the TV. I have a family and a life. I can't go looking up every extension just to find these brown socks. I'll just quit after .com or a few other really popular ext, because that is all I remember and I don’t have that kind of time anyway. I'll just take a trip to the mall and get some brown socks. And if it was just info on brown socks I was looking for, I'll just go to the library the next chance I get.

And if this is the way many non-domain traders think, it will be along time before. COMs become as worthless as it is being made out to be in this thread.

Are you sure? I kind of like Xkt.com!

I hear you, but "like" is one thing. Actual value is another thing. I see a lot of peole try to push 3 char domains like pq8.com or r0i.com Really what kind of worth do they have? Chances of them ever having any real value in the futire is slim, too. SOme people seem to think that any 3 char domain is a good domain. I just can't see it that way though.

 

[-db-]

Everybody is right to some extent. It's really not something that can be defined in a single broad sweeping yes or no statement, IMHO. It's too complicated with too many individual ways of breaking it down.

Also, I think some are underestimating the growing recognition of .US/.INFO/BIZ, and these extensions are making a real impact. Each week it seems I see a new billboard, magazine or newspaper advertisement for a business in the new name space. And the young generation? These kids know all about the new extensions, because it's been more affordable to get a good name in that neighborhood. They and their buddies have sites there. They feel right at home typing DOT US, DOT INFO, DOT BIZ. They are growing up right alongside these new extensions. This will continue to impact things as they both mature.

Even my Dad, in his 60's and what I consider an 'average' or 'novice' web user, knows about .US/.INFO/BIZ

COM is King, but the king is not alone in the castle.

 

[ecalc]

Many users type searchterm (minus ext) in browser address bars. Browsers go to searchterm.com by default. Dot com will rule as long as browsers work this way.

 

[barefoottech]

Browsers go to searchterm.com by default[/url]
Err Mine Doesn't .FireFox Rules

 

[ecalc]

What extension does FireFox default to?

 

[barefoottech]

It doesn't default to anything ,It does a Best guess fit

 

[IAmAllanShore]

Folks, I could write a novel (Sharon ) here, but I won't :gl:

Instead, let us remember back to whatever your first economics class was.

There is a limited supply of 3 letter .com's (Or any name .com's for that matter), and they have all been making their way to END-USERS for many a year now. Those end users now HAVE the name they need. (How many times can McDonalds buy mcdonalds.com ? Past that, they don't have the huge ticket need for domains (Sure, registrations of "mcflurry.com" hoping to make a bundle will continue, but that's just not logical).

It's not that the price is decreasing, it's that the majority of really valuable ones HAVE been sold to END USERS already (Or obtained by reverse-hijacking, but I won't go there ). There is now less of a supply of end users to sell to, as the end users have bought and paid for their names already.

There is, however, no shortage of $1 - $5k domains, and the fact that they continue to be sold is evidence enough of this :imho:

What is more, as Sharon and others have mentioned, making a few $500 sales is nothing to be ashamed of. I have personally sold 4 names this week for prices between $100 - $600, and the most I paid for any was $40 and they were held less than 6 months. Not a "let's all retire now" week, but still respectable :imho:

The average price of 3 letter .com's on snap and elsewhere continues to rise as more money comes into the market (Domainers have money? Who knew... ).

Anyhow, in short... the highs of "men.com" will be a thing of the past, probably. HOWEVER, the total "purchasing power" directed to domains en banc seems (At least in my niches) to be on the level or at a slight upward tilt.

-Allan

 

[CrazyTech]

Allan makes some valid points indeed - nice summary of a novel there.

Just go around one day - find people who are semi-computer literate like the average person and ask them what they associate with the internet. Ask them if they've heard of .biz, .us, .info and some of the others. See what the results are. .com currently is and always will be the coveted king. For the average person .com is the internet. Allan's post takes my thoughts from there.

 

[SharonTucci]

I believe that that is not quite the whole story. I would NEVER pay $2k for a domain. The only possible time that I would is if I couldn't ANYTHING else for branding purposes. Most people won't pay above $400. Most of the big figure sales seem to be speculators hoping that the domains value will increase over time.

I disagree with that. I've had some fairly good sales and not one has ever been to a speculator - the bulk of my business is to end users as it should be.

Who pays this? Well, when you consider the REAL value of a domain here for branding purposes, $2-20k is a drop in the bucket compared to other marketing expenses. How much does it cost for a full page ad in the Wall Street Journal for a company in financial services? How about designing the ad? What about running a commercial one time during prime time or a big event like the SuperBowl? What about producing that commercial?

I've spent years in email marketing. One of my clients - one of the best brand names in the automotive industry (high end) spends an average of $15k for a TEAM to put together one email that goes out to subscribers. Real businesses don't think twice about spending $X,XXX for a domain that has some potential value for them.

Exactly! That is what is leading to the demise of the .com. They have inflated value, which is why they are losing value. People are only buying to resell, no real potential for an end user. The same thing is happening to the .com as happened to the stock market in '29. Same problems, same result (except, not so severe because they do still hold value).

Sorry, but that is not accurate. Perhaps it seems that way when you look around the forum but the transactions on forums, afternic, sedo, etc represent only a portion of sales that go on. IF you have a good portfolio, buyers DO go to you.

Folks, I could write a novel (Sharon ) here, but I won't :

Hey, play nice Allan :P

 

[IAmAllanShore]

Hey, play nice Allan :P

:hearts:

Just trying to give you a plug Ms. Tucci :hehe: :sold:

And on another note: Just got another offer via email in between this post and my last one :D

-Allan :gl: