Realistic .net pricing

[mixmox]

Am I just being unrealistic to expect that I can find .net domains which have say 20k estimates exacts per month and over $2 cpc for the keyword to be going for a few hundred dollars?

Even with domains which could realistically get a few dollars a day when fully monetized, sellers are still expecting $x,xxx.

 

[Erdy]

I think you need to calculate the value according the income. If it earns $1 a day, $30 USD a month the domain would be worth at least $1800 USD.

 

[mixmox]

I think you need to calculate the value according the income. If it earns $1 a day, $30 USD a month the domain would be worth at least $1800 USD.

That seems a very high valuation. That is 5 years income, when you consider that domains which are already built and sell on flippa tend to get 9-12x monthly income, and that is when they already have an income stream, as opposed to one which may be in place with work. What is the flaw in my reasoning?

 

[bmugford]

That seems a very high valuation. That is 5 years income, when you consider that domains which are already built and sell on flippa tend to get 9-12x monthly income, and that is when they already have an income stream, as opposed to one which may be in place with work. What is the flaw in my reasoning?

Good keywords rarely sell for that type of multiple as there is generic value as well.

You might see that multiple for typos, or domains with otherwise low generic value.

Brad

 

[mixmox]

Good keywords rarely sell for that type of multiple as there is generic value as well.

You might see that multiple for typos, or domains with otherwise low generic value.

Brad

Even when you consider that the revenue I quoted is in no way guaranteed (e.g. it assumes google estimates are accurate and that you get ranked for that specific term on position one, which may only happen say 20% of the time)?

 

[bmugford]

Even when you consider that the revenue I quoted is in no way guaranteed (e.g. it assumes google estimates are accurate and that you get ranked for that specific term on position one, which may only happen say 20% of the time)?

It is impossible to know if a domain is realistically priced without knowing the domain.

All terms are not created equal. One term might only be worth a 12x multiple, while another might be worth thousands with no traffic or rev, just based on generic value.

Brad

 

[mixmox]

It is impossible to know if a domain is realistically priced without knowing the domain.

All terms are not created equal. One term might only be worth a 12x multiple, while another might be worth thousands with no traffic or rev, just based on generic value.

Brad

The generic part is what I am missing, but I would have thought that for most .net which were more than one word this would not really apply? If I had a sofa bed company why would I build a site around leathersofabed.net when I could just as well do it around my brand name?

If you don't mind answering, out of the following randomly selected keyword domains which have the same estimated revenue which would you consider to have generic value and which do not?
buynewcar.net
gedtest.net
loancalculators.net

 

[floname]

IMHO, I would value these in the following order (based on generic value)

LoanCalculators

GEDtest

BuyNewCar

If your buying based on development potential, and not on an established income, I would come up with a figure of what it would cost to build it out and use that as a negotiating tool.

 

[mixmox]

IMHO, I would value these in the following order (based on generic value)

LoanCalculators

GEDtest

BuyNewCar

If your buying based on development potential, and not on an established income, I would come up with a figure of what it would cost to build it out and use that as a negotiating tool.

Assuming any development costs makes the domains even less attractive, so how does that help with negotiating?

Still struggling with the generic value concept. I can see why chairs.net (parked of course) is a good domain to have, but swivelchairs.net? To me that seems like only a domain you get for the google traffic potential. Also if I had a company which specialized in chairs I would develop my own brand site not swivelchairs.net, so who buys this domain? The reason why I am emphasizing this is that many of the prices I have got back must be assuming pretty good generic value as on the traffic potential the value is just not justified.

To me it seems quite telling that such a large percentage of these domains which could be earning income are instead parked and earning nothing.

 

[floname]

If the domain name your after is parked, and its any good, just the fact that you've inquired about it can add value for the current owner. If the .com is fully developed, then arguable the next best alternative for those exact keywords is the .net extension which could indicate that others have also inquired and therefore inflate the asking price..

As far as development costs, you could attempt to negotiate a deduction of all or a portion from the asking price. The fact that their undeveloped actually works in your favor as it could theoretically undermine the value in the eyes of the current owner.

Short of iron clad revenue stats, the domains are being sold on a combination of development potential and generic value, both of which hold different meanings for different end-users.

If the owner is selling for a perceived revenue multiple based on search volume, try to beat up the math a little bit, come up with a realistic estimate to debunk theirs, deduct costs of development and counteroffer accordingly. Then hurry up and wait..

I also negotiate "on behalf of my client". It tends to level the playing field a bit as far as price expectation.

 

[mixmox]

If the domain name your after is parked, and its any good, just the fact that you've inquired about it can add value for the current owner. If the .com is fully developed, then arguable the next best alternative for those exact keywords is the .net extension which could indicate that others have also inquired and therefore inflate the asking price..

As far as development costs, you could attempt to negotiate a deduction of all or a portion from the asking price. The fact that their undeveloped actually works in your favor as it could theoretically undermine the value in the eyes of the current owner.

Short of iron clad revenue stats, the domains are being sold on a combination of development potential and generic value, both of which hold different meanings for different end-users.

If the owner is selling for a perceived revenue multiple based on search volume, try to beat up the math a little bit, come up with a realistic estimate to debunk theirs, deduct costs of development and counteroffer accordingly. Then hurry up and wait..

I also negotiate "on behalf of my client". It tends to level the playing field a bit as far as price expectation.

Thanks for negotiation tips.

For ranking on google the .com being developed is normally a negative, as it means you have strong competition which will always have a ranking advantage over you. With most of the keywords I look at the .com .net and .org or undeveloped or parked. I see your point though how an undeveloped .com suggests to the .net owner that it is not as valuable as they think it is.

So in my example, assume that a domain has very little generic value. Assume the domain makes $1 a day if ranked on the top spot on Google, and I have 20% of getting there. That puts the domain value at $73.

If I were to assume a 5 year pay back period then the chance of ranking for that keyword I would estimate goes down to 10%. So this would put the value at $182. Yet for this domain someone invariably is asking for $x,xxx

So it seems to me that I am left with the problem that so far no one is willing to let a domain go for a price that I could even break even on, let alone get a return for.

 

[floname]

If its a crowded house for that keyword, its either not worth going after or its gonna require even further investment into development and SEO. The fact is, a domain name is only worth what someone is willing to pay for it at any given time. Keep in mind that if you do build it into a revenue generator, you could hold for a couple years, recoup at least some of your initial costs, see where the market goes and maybe turn a profit on future resale somewhere like flippa.

Best of luck with it..

Jerry

 

[mixmox]

If its a crowded house for that keyword, its either not worth going after or its gonna require even further investment into development and SEO. The fact is, a domain name is only worth what someone is willing to pay for it at any given time. Keep in mind that if you do build it into a revenue generator, you could hold for a couple years, recoup at least some of your initial costs, see where the market goes and maybe turn a profit on future resale somewhere like flippa.

Best of luck with it..

Jerry

Thanks, I missed that, you are right of course, once I have the domain built and with that revenue I should be able to recoup the domain value, so I have more than broken even after the year is over.