Closing The Books on a Subpar Q1

Elliot Silver
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12

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:

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Four Active Inquiries on One Domain Name

Elliot Silver
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32

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

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Valuing a Domain Name

Elliot Silver
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3

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:

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Tough for a Domain Flipper to Get Full Value

Elliot Silver
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22

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

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Know Competing Prices

Elliot Silver
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14

When you are setting buy it now prices on your domain names, or when you are responding to a purchase inquiry, it’s important to know prices for comparable and similar domain names. It’s easy to find these similar domain names, and taking the time to look can keep a prospect interested.

For many of the inbound inquiries I receive, the prospect is also looking at other domain names. For instance, if someone inquired about BreastLift.com (a domain name my company owns), they might also be looking at BreastLifts.com, BreastEnhancement.com, BreastAugmentation.com, and perhaps BreastLift in other domain extensions. If I reply that my price is $100,000, and one or more comparable domain names is much less expensive, they may cross my domain name off their list.

Some people don’t care about losing a prospect when it comes to their premium domain name. As a domain seller though, I would rather sell a name for less than the ideal price rather than lose a great offer. For instance, if the prospect could buy an alternative domain name for $65,000, it might behove me to lower my asking price to come more in line with a comparable. There may not be a lot of people willing to pay that much for a particular domain name, and pricing a domain name more competitively might be helpful in closing a deal.

A secondary reason for knowing comparable prices is

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5 Exterior Factors I Consider When Valuing a Domain Name

Elliot Silver
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16

I buy and sell all types of domain names related to various trades and industries. One day I might be negotiating to buy a real estate domain name and the next day I might be trying to sell a domain name related to cosmetic surgery.

There are certain standard domain name factors I generally consider when I am trying to place a value on domain names, and I think other domain investors look at these as well. I use the Keyword Planner tool to see search numbers, and I find the Adwords CPC to see how much advertisers are paying for clicks. I also look at the age of the domain name and number of extensions registered (and by whom). Comparable sales and prices for similar domain names are also standard factors.

There are other general domain name factors I also consider, but for the sake of this post, I’d like to discuss five of the exterior factors I consider to place a value on a domain name I am trying to acquire or sell. I welcome your feedback, and I invite you to

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