Don’t Scare a Prospect Away

17

I was looking at a domain name today and came across its Efty landing page. On the left side of the page, there was a short list of publicly reported domain name sales, including a few in the multi-million range. These domain names were not comparable to the domain name I was looking at, and the sale prices were not close to what the domain name is worth. I think showing unrelated domain name sales might be a detriment.

When it comes to providing a price to prospective buyers, I like to share comparable sales. I know some people don’t like doing this, but I think it can be helpful. For instance, when a prospective buyers inquires about one of my one word .com domain names, I send them a link to recent one word .com domain name sales and when someone inquires about one of my LLL .com domain names, I send them this link to recent 3 letter .com domain name sales. In my opinion, sharing what similar domain names have sold for can be helpful to them in understanding the value of my domain names.

The risk with sharing super-high sales as comparables is the prospect might think your valuation is so far off it is not worth inquiring. For instance, I think it would be silly for me to mention the $30 million sale of Voice.com when someone inquires about Butterscotch.com. Besides the fact that these are both one word .com domain names, there are few other similarities. I think using Voice.com as a comparable sale in this case would be detrimental to me rather than helpful.

When I cite comparable sales, I try to share real comparable sales rather than super-hopeful sales. For instance, when someone inquires about Honeydew.com, I share this list of fruit .com domain name sales. When someone inquires about a different one word .com domain name, I share a select group of domain name sales I believe are somewhat related to my domain name rather than the highest sales I can find.

I think it can be helpful to share comparable sales, but I think it can be detrimental if the domain names are clearly much more valuable than mine.

17 COMMENTS

  1. It’s a useful article, that is dynamic in nature. Common sense is required to hit the balance; in other words, there’s a range, and interval, qualitatively, that’s OK, in using such comps.

    But the author of the article, in his honeydew example, is not immune to such carefulness, if he were to use Apple, or Orange, in his comparable sales, because honeydew is further away from Apple than butterscotch is to voice, when it comes to domain names.

    And that is my subjective opinion.

    • Agree about common sense.

      I do need to be careful, although I think Honeydew is closer to Apple than Butterscotch to Voice. At their base levels, honeydew and apple are both fruits. Voice and butterscotch don’t share similarities beyond the fact that they are both English words.

      • There’s a big point there, however, the consideration of branding, there’s the Science, but there’s also the Art.

        A practical example, of which the top Fortune Companies, up-to 500, is GoFundMe.com, Coup afford to buy Fund, or Go, or Give, yet they scaled a three-word domain to lead their vertical; I digressed a bit so as to cap it off with the following, we must avoid linear thinking and dogmas to generalize.

        I’m not saying that anybody is doing that here, but that’s just my standard admonition when a domain expert makes a good point, and there’s a need to narrow the scope a bit.

        Thanks for a good piece.

        • A company doing well in spite of bad domain doesn’t mean domainers can make money trying to sell bad domains. This kind of thinking is just messed up.

          • Even though that’s not what I said, I can still remind you that “good “ versus “bad”, is often misinterpreted for “lucky” versus “unlucky” nowadays in domaining.

            There’s one question people who hold your opinion never address, let me try with you:

            The daily sales made at Sedo and Godaddy, of domains between $2000 and $10,000, of names such as gofundme.com, are they real or fake? If they are real, do you suppose a domainer would be happy with such daily or weekly business, and liquidity, over a once a year $40,000 sale?

          • They are real, the problem is that you see bad domain (gofundme.com) as good, just because someone used it and built a big business.

            Somebody would have chosen to use gofunddme.com because it was $9. If you’d registered it first they would have bought fundmetoday.com instead or any one of the billion other similar available names.

  2. Those buying similar domains from Godaddy and Sedo, paying $2000 to $10,000 daily, which we have you on record affirming as legitimate, are not registering alternative second level TLDs as you contradict yourself here, by admitting that those sales are real, you vitiate your last point.

    Besides, the mediocre names are actually the rule, rather than the exception.

    Besides, the market does not offer a binary choice to end-users, that is premium names, or pigeon shit, there’re myriads of great and good names between the extremes.

    • Very have to follow you. I never said buyers are using alternate domains, they rarely use them. If domainers focus on pigeon shit or low quality names they won’t make money. People using pigeon shit like gofundme.com can get those names for reg fee. That is the appeal of 3 word domains, they cost $9.

      For a domainer to buy pigeon shit names would be like a supposed car collector going down to the the local Ford dealer and buying any old car and then hoping to be able to resell it. Those domains aren’t rare just like new fords aren’t rare, people won’t pay a premium in the aftermarket because.

      • The point you are over-emphasizing is not only tangential, in other words, that is not what we are debating, but it is also universal; that is to say, those cheapskates who do that, do it with premium domains as well, for example, honeydew.com, they can easily register betterhoneydew.com, and so on…

        So, that’s nothing unique to lower quality names.

        You have already conceded the point, you accepted the sales report from domain markets as legitimate data, so I’m talking about those types of names.

        I can give you an example with one of my names, so we can abandon abstraction, I have Recyclates.com for sale, it might not smack you as a top name, in the orthodox thinking, but it’s probably the best name available in the market today. That’s the type of names that I’m talking about.

Leave a Reply