How Do You Drive Liquidity in Domain Market?

In a public Facebook post this afternoon (embedded below), Mike Mann, founder of DomainMarket.com, posed an interesting question: “There are hundreds of millions of dollars worth of the worlds best .Com domain names for sale at DomainMarket.com but they sell too slowly, any ideas?

In my opinion, one major issue in the domain investment space is liquidity. You and I each might have domain names that are legitimately worth 6 figures to the right buyer, but that buyer may not realize how the domain name can impact his or her business, and that buyer may not have the capital to be able to afford the domain name. Similarly, we might have domain name portfolios with significant value in them, but selling these assets takes quite a bit of time.

By nature, domain investments tend to be

Domain Broker Newsletters

There are a number of domain brokers and domain brokerages that offer domain sales newsletter, and I think they can be a pretty good way of buying and selling domain names.  Someone asked me if I could share a current list of domain broker newsletters, and I thought I would put this list together for your reference.

Listed below are the domain broker newsletters I could think of off the top of my head. If I have omitted an active sales newsletter, please let me know. There are daily, weekly, and periodic newsletters included. Many marketplaces offer newsletters, but the ones below are third party brokerage sales newsletters.

Domain broker sales newsletters (listed alphabetically):

Closing The Books on a Subpar Q1

I’ll be honest with you. The first quarter was pretty subpar in terms of domain sales my company closed.

After the record breaking year I had last year, my expectations for Q1 2014 were pretty high. Unfortunately, domain sales in the first quarter were below my high expectations.

Looking at things objectively, it wasn’t all bad. Had I closed on the profitable offers I received, I would be on track to exceed last year’s sales numbers. Because of the steady nature of my company’s other revenue streams, I have the luxury of holding out for better offers, and when those didn’t materialize, my quarter was below my expectations.

There were several factors that I think caused the lower sales numbers for me:

Four Active Inquiries on One Domain Name

Screen Shot 2014-03-29 at 9.23.24 AM Screen Shot 2014-03-29 at 9.23.49 AM

As they say, “when it rains, it pours.” I thought this was pretty cool and wanted to share it with you. It doesn’t happen very often, but I now have four ongoing inquiries for the EventManagement.com domain name via DomainNameSales.com.

Since two of the inquiries were made directly from the landing page, I am in direct talks with those two parties. Both have submitted opening offers, although we are pretty far away from the asking price. There are also two ongoing inquiries that were submitted via GoDaddy. This means I don’t know who the prospects are because they are negotiating and dealing directly with DNS brokers.

Negotiating with four parties at once on one domain name is

Valuing a Domain Name

Determining the value and sale price of a domain name may seem fairly simple, but there are quite a few factors that need to be considered. Frequently, domain names are priced based on a gut feel, and that gut feel takes many factors into consideration.

In the comment section of my article yesterday about the difficulty in getting market prices on domain flips, Leonard Britt made a suggestion to me: “Perhaps your readers might find it useful to learn how you determine a reasonable end user price for a particular domain.” I shared some of the factors I consider when valuing a domain name, and I thought it would be a good topic to discuss in its own blog post since many domain investors struggle with this issue.

When a domain name is priced too high, prospective buyers may look elsewhere. They may purchase a better priced domain name on Sedo or Afternic, or they may hand register a domain name. When a domain name is priced too low, the seller will end up leaving money on the table. My philosophy is generally to price domain names on the higher side but negotiate a fairer deal with qualified prospects because there are plenty of deals to be had and cash flow is king to the growth of my business.

Listed below (in no particular order) are some of the factors I consider when valuing a domain name:

Tough for a Domain Flipper to Get Full Value

As someone who tries to get good deals on domain names to flip them fairly quickly (ideally one day to 6 months), one of the biggest issues I face is getting full value for the domain name assets I want to flip rapidly. It’s not usually easy to buy a domain name and quickly find a buyer who is willing and able to pay close to its retail value, but that is the goal in this cash flow dependent business. Domain flipping is one objective of my business, but it’s not easy to get the full value for domain assets with that business model.

If I buy a domain name for $50,000 because I think it’s worth 6 figures, I could have to wait a while to sell it for the 6 figure valuation (that may never actually come to fruition). Sitting on expensive domain names isn’t the worst thing, especially when they earn passive PPC income,, but for a business that relies on the cash from the sale of domain names in order to operate and grow, it isn’t optimal either.

The opportunity to sell a domain name at a great profit