Pricing Domains for End Users

[fm1234]

When pricing domains for end users, one yardstick which I have found useful is to use Google's Traffic Estimator to get a rough idea what the budget would be to run ads on that exact phrase. While not a precise measure due to the number of factors that ultimately determine a given advertiser's CPC, having the general recommended budget range handy is especially useful when pitching an exact match domain to a company that is on the first page for ads, but not in natural SERPs.

In the last few months I have closed several end user sales based mainly around this metric -- the estimated annual AdWords budget vs. what I am asking for the domain, with a discount applied to the domain since the AdWords ad is basically "buying one's way to the front" while the domain name is not guaranteed to put them there.

Prospects for this particular pitch are: Companies that are on the second and third page of the SERPs for that domain's keyphrase, but not the first; companies that are on the first page of related phrases, but not for the domain's keyphrase; and companies that are showing on AdWords and on the ads on the domain's parking page (I always take a screenshot and provide it in my sales material.)


Frank

 

[garptrader]

One needs to be careful about using the default CPC given by the Google Adwords Keyword Tool as that is not what most advertisers pay. Quite often one can obtain a ranking on the first page for far less than the default CPC. An exact match domain helps with search ranking but is not a guarantee with Google as Google's ranking methodology considers many other factors. One could assume perhaps that a company already on page two or three of Google has the development resources or is willing to expend them to get an exact match domain to page one. Another company in the same industry who merely buys their way via Adwords may not be willing to exert the development effort and could be disappointed assuming this domain was going to get them there. On the other hand exact match domains do seem to rank very well at Yahoo given a modest development effort.

 

[fm1234]

To clarify, I don't mean to say that pricing should be derived by directly extrapolating the TE tool's numbers. However, QS and authority metrics notwithstanding, it is generally a safe bet that a keyword for which Google recommends its default $1-$2 daily budget is cheaper than one for which Google recommends a $15 daily budget.

Obviously, if I am pitching people who are on the first page AdWords display for my keyphrase, I don't want to presume to tell them what they're paying -- if they have a great QS and are paying a fraction of it, I look like an idiot; if they're paying a lot more, then they have a distraction from me inasmuch as they are going to try to find out why they are paying "too much" for AdWords.

I put the numbers from the TE out as exactly what they are -- a roughly estimated budget recommendation from Google. The screenshots I take all have the disclaimer from Google themselves about the factors that can vary the numbers, and I do not harp on what I think the prospect is actually paying, if they are an AdWords lead. If they are a SERP lead, chances are they have at least looked into PPC but have either burned through money on it or never actually taken the leap, which in either case is an advantage for me; however, if I say "you will pay x" as a definitive statement, then this is something which can be challenged (and refuted) thus undermining credibility. I'm just using the TE figures as a guideline, just as Google themselves are.


Frank

 

[soggyindo]

thanks for this frank, a good basis for coming up with a number.

could you give us an example of such a sale price for you vs adwords price (slightly changing the terms if your buyer wants anonymity?) - and an idea of the average amount of emails you have to send to get a sale?

 

[fm1234]

As I said, my price points were already being derived off of other metrics, and I'm largely using the TE data to refine those points and add a perception of value to the domain.

Most of my domains fall between $225 and $625 as the original asking price, but the formula I use to determine the number is more complex than just checking the TE. Length, TLD, age, search volume, CPC/TE data, it all goes into figuring.

Number of mails is sort of a separate topic, but briefly, I generate a list of 10-30 prospects and send them out e-mails, with a follow-up to those from whom I haven't heard back one week later. I sold just under 20% of the domains I flagged for end user sales in May, and just over 20% in April -- this includes domains where I ended up not going past the prospecting stage, because I didn't see any potential buyers once I went looking. I try to focus my effort on companies and individuals who own multiple domains and ideally who are also paying to advertise, which restricts the playing field but yields a much higher quality prospect list, which makes the time spent much more productive.

As far as specific domains go, while I am not comfortable giving out names I will say that I did sell one for over a thousand dollars last week, the biggest sale I've had since I started doing this a couple of months ago. I'm not bringing up the money to brag but to make another point: I submitted this domain on Bido in March and it didn't even get enough votes to go to auction. I put it in front of Latona at the beginning of May and they scoffed at it. But I had two different potential buyers making counteroffers when I just got off my ass and went looking for them myself, instead of waiting for them to show up at auction sites and brokerages. Food for thought.

Frank