Pricing Names Too Low

[passini]

Usually domainers price their names on the high end. But I noticed lately a trend of pricing domains with buy it now prices too low.

I don't see how this could work, to price a decent
com/net/org under 1000 usd in a marketplace.

Yes I understand if someone wants to drop the name or is selling to some other domainer but otherwise doesn't make sense for me. I don't think that can bring gain in the long run. Especially with domains that could have buyers with big pockets.

I mean, if your domain is something like cheaphomemadebracelets.net of course the target enduser probably will not have the budget to spend too much.

But if the domain can have institutions, schools, luxury businesses as target endusers, why price it at 800? Doesn't make sense.

My domains targeted to this kind of buyers are priced accordingly. Doesn't matter how much I spent or how much they are worth wholesale. Who is going to buy is the target. I don't speak about premium names but those that can be sold for mid four figures to low five figures, these are the names in my portfolio.

Also my names that are good for small/medium business I never price, even if hand regs, less than 1500. If an enduser needs the name he will buy. This works for me.

Maybe I am wrong, I checked several domains in my "good" niches and I noticed this. Probably is just a case. I know every domain is unique and we live in a free world where anybody can price his domains as he wants but this definitely made me little nervous as for sure can hurt other sales.

What do you think? Do you notice the same or it is just me after a couple of drinks? Ok maybe three, lol

 

[pokainc]

that's the thing.. not sure if it's SAV itself or this particular domainer that uses SAV at a fairly massive scale..

 

[dirk]

But if everyone noticed this 280 thing I don't think is a domainer because we are talking about a lot of names... Could be SAV that for some reasons is making this? If this is the case it is not the first registrar buying names but why price them so low and all at the same price? I dont see a reason, I can think a couple but doesn't make sense to me anyway...

Sav are domainers themselves. I bet it is sav selling those domains or a domainer with close ties to them. You would need a lot of data to be able to make the sales to remain sustainable at that price point, data a registrar would be able to collect, data mined from domainers utilizing their services.

Another theory is someone is outbounding those names like crazy. The $280 price point could work. I've seen some survive for years with lower asking prices.

 

[bruhne]

I aim to be flexible on pricing and strict on quality. I am still learning, getting better, and thus far profitable.

 

[Pay.My.id]

Some of my personal experience teach one things: Know more on your buyers ,let them price your domain and ask more question before closing the sales.

 

[poweredbyme]

Selling for too low may be very profitable if you do it at mass scale. But obviously it would drop all prices.

However I always think most domains are overpriced. Most domains are not worth even $280. If someone can still sell domains for $280 at a mass scale (I didn't know it) it must be for the constant bubble in the market. "too low" may be incorrect definition especially in a shrinking economy.

 

[Ostrados]

The problem is that reducing prices a lot does not increase STR a lot. You may have noticed that your sales are not affected a lot when you do aggressive prices reduction, that is be because there is a cap limit that prevents low pricing model from working:

For example if probability of selling a $2000 domain is 1% per year then reducing its price to $1000 might increase it is selling probability to 2% which is good, but if you reduce price farther seliing probability will not change a lot, if you reduce it to $500 selling probability may increase to 2.1% then 2.2% at $200.

So the selling through rate (STR) for your portfolio does not increase linearly with lower prices , there is a saturation limit after which reducing prices any farther will not make any effect.

On the opposite hand, increasing prices aggressively can greatly affect your STR especially after $5000 mark, the higher the price the lower STR.

IMO best strategy is to price your domains just right, do extra effort in evaluating your domains and price domains that worth xx at xx, and domains that worth xx,xxx at xx,xxx. Don't overprice or underprice your domains.

 

[Recons.Com]

Selling for too low may be very profitable if you do it at mass scale. But obviously it would drop all prices.

However I always think most domains are overpriced. Most domains are not worth even $280. If someone can still sell domains for $280 at a mass scale (I didn't know it) it must be for the constant bubble in the market. "too low" may be incorrect definition especially in a shrinking economy.

SAV model is different. To breakeven at their cost of $8.2 or so as registrar, at price of $280 they need sell through of 3% which is achievable at that price point. Even if they don't make a dime from it directly, for every 1000 names owned, they get 30 new clients that open SAV account and might have never given them a try. Even if 15 of those stick, that means they can now scale up and buy 100 000 domains, get daily traffic of 10 000 people that creates free awareness, and get 3000 new clients a year from this, out of which 1500 will stick.

This is why no domain investor should support SAV in any way, including participating in their auctions, as their hybrid model undermines value for everyone else.

 

[Jim H]

This is a widespread phenomenon. It is worth pondering deeply.

 

[WhoaDomain.com]

Hi

i think

if, you think, some are pricing names too low and they are quality domain names...
then
perhaps somebody should be buying them, and then increase their prices accordingly, right?



just saying....


imo...

Depending on quality. that strategy could end up with you holding the bag or proverbial "hot potato". lol

 

[tomcarl]

Some people will drop $1K or less on a domain because of a fleeting idea behind it and you'll get a lot more of these impulse buys when you have a large portfolio. It all averages out vs holding and hardly seeing a sale.

 

[Recons.Com]

Some people will drop $1K or less on a domain because of a fleeting idea behind it and you'll get a lot more of these impulse buys when you have a large portfolio. It all averages out vs holding and hardly seeing a sale.

To average out, you'd need sell through of 6%+, as most people sell at $1800+.

I don't think for the types of names they are offering (basically anything fitting patterns without any further analysis), that is achievable. Probably more in 3-4% range, that allows to break even and maybe even have a little profit.

Normal investor wouldn't do it. They do it for the strategic advantage, kind of lazy ass replacement of a proper marketing strategy, while alienating another segment of customers they are courting.

 

[BoGoKing]

Usually domainers price their names on the high end. But I noticed lately a trend of pricing domains with buy it now prices too low.

I don't see how this could work, to price a decent
com/net/org under 1000 usd in a marketplace.

Yes I understand if someone wants to drop the name or is selling to some other domainer but otherwise doesn't make sense for me. I don't think that can bring gain in the long run. Especially with domains that could have buyers with big pockets.

I mean, if your domain is something like cheaphomemadebracelets.net of course the target enduser probably will not have the budget to spend too much.

But if the domain can have institutions, schools, luxury businesses as target endusers, why price it at 800? Doesn't make sense.

My domains targeted to this kind of buyers are priced accordingly. Doesn't matter how much I spent or how much they are worth wholesale. Who is going to buy is the target. I don't speak about premium names but those that can be sold for mid four figures to low five figures, these are the names in my portfolio.

Also my names that are good for small/medium business I never price, even if hand regs, less than 1500. If an enduser needs the name he will buy. This works for me.

Maybe I am wrong, I checked several domains in my "good" niches and I noticed this. Probably is just a case. I know every domain is unique and we live in a free world where anybody can price his domains as he wants but this definitely made me little nervous as for sure can hurt other sales.

What do you think? Do you notice the same or it is just me after a couple of drinks? Ok maybe three, lol

I've just started a "One Price" fits all domain service. Due to my background and experience I'm probably in the top 10% of domainers who hand register domains. On "average", it probably takes me about 30 minutes to come up with a decent domain that costs me just $8.50. While I've backed into this number, I'll be selling domains for a fixed price of $299, and expecting to sell 5-10% of my domains annually.

This is all in lieu of selling just 1% of my portfolio annually with an "average" sale of $1,500. At 72 I'm too old to sit around and hope and pray someone will find a needle in a haystack and pay an outrageous price for a domain that cost just $8.50.

Still at $299 my markup is 35X what I paid for the domain, not the 350X many domainers expect to be paid. The shakeup is coming....i feel it in my bones

 

[NickB]

"I'm probably in the top 10% of domainers who hand register domains"



Um.........no

 

[BoGoKing]

"I'm probably in the top 10% of domainers who hand register domains"



Um.........no

It's really hard to be humble around here. Maybe it's closer to the top 5%

 

[topdom]

The main problem, I suspect, is that endusers don't go to marketplaces (such as Afternic) , they go to their favorite registrar (such as Godaddy). So I suspect GD buys at AN and sells at GD simultaneously. My AN domains quite often don't have price at GD when they have a price at AN. So your domain can sell for 3K, but will you get 3K minus commission. But if your price is 500, then you will be more likely sell. If my suspicion is correct, try this: make a big offer for your own domain while pretending to be a big company, and add a low price at another marketplace, and maybe then sell quickly !.

 

[Joe N]

"I'm probably in the top 10% of domainers who hand register domains"



Um.........no

I think he meant top 10% of domainers who hand reg and hemorrhage money.

 

[NickB]

I think he meant top 10% of domainers who hand reg and hemorrhage money.

Good point.....he nailed it, i stand corrected

 

[Rick Ace]

Where are these people pricing good domains cheaper?

The guy asking the real questions. They won't have any domains left to sell if we can find them.