End User “Generosity”

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I had an inquiry on one of my domain names from an end user buyer the other day that made me laugh. My domain name is parked on the Domain Name Sales platform, and instead of monetizing it, there is an inquiry form so that visitors know that the domain name is for sale.

Instead of filling out the form, the prospect called me on the phone. He called DNS as well, which is how I know that he had visited the landing page before connecting with me. After a brief conversation, he asked for the price of the domain name, and I shared the low five figure price, which I think is fair.

He sounded surprised and told me that he wouldn’t be interested in buying the domain name for that much. I asked what he thought was a fair price, and he told me that he was happy to take it off of my hands since I wasn’t using it. He indicated that he felt he was being generous by giving me a little something for a domain name that I wasn’t using.

While I appreciated the “generous” offer of giving me something for my “unused” domain name, I decided to pass on the offer. I told him it was an investment, much like someone would be unused beachfront property, either hoping to use it for a beach house or sell it to someone who wants to have a home on a great plot of land.

For whatever reason, some people still don’t see parallels between undeveloped domain names and unused land. I think I should start trying to buy real estate using this thought process and see if anyone wants me to take some of their beachfront or mountainside land off of their hands for a pittance.

19 COMMENTS

  1. In other words it’s good. As long as people don’t figure-out parallels between undeveloped domain names and unused land I think domainers may continue to profit. It’s paradox to what you said, but, the end-user here may definitely start learning about domain and its values and may come-back to you. I hope.

    • Yes. I am always intrigued when I offer thousands of dollars for an unused (non-resolving) domain name, and the owner acts insulted. When the tables are reversed, some people think they are doing a favor by taking an “unused” domain name off my hands without realizing or caring that it’s an investment.

  2. At that point, I would ask what kind of land/home property they own, and whether they would be willing to hand it over to you in the same fashion.

    This response shuts up even the most articulated nameballer right away.

    By the way, domainers aren’t immune from the same type of approach; I get plenty of such emails and calls from wet behind the ears ‘flippers’.

  3. The general public probably places as much value on a nice keyword domain as a pair of shoes. There is some recognition that a shorter, keyword-rich .COM domain may have some value but they just don’t see why it should cost hundreds or thousands of dollars. Recently I received interest on an IT-related .COM domain by a web design/development company and yet despite quoting a $1500 price or $25/month lease was told my price was way too expensive. And yet how much do clients typically pay for web development & design services? I know an IT consultant who bills close to $100 / hour. And you cannot afford $25/month?

    • Exactly! The concept of intangible asset valuation falls short when there is a lack of education on the subject. I take the extra step of pointing such “astonished” buyers to the DNS FAQ and DNJournal. Some have returned with a decent counter-offer, but for the most part those that have no clue about domains 20+ years after the commercialization of the Internet, find an alternative domain.

  4. A domain, any domain, is worth what someone else is wiling to pay for it, and not a penny more.

    In the aggregate, domain sales prices have been dropping over the past few years, and as much as noone here wants to admit it, the gTLD`s will kill the long-term value of mid-grade .com`s.

    • “A domain, any domain, is worth what someone else is wiling to pay for it, and not a penny more.”

      >> Perhaps, but one offer on a domain name that is not being marketed doesn’t mean that is what the domain name is worth. Just because one guy thinks his $200 offer is fair doesn’t take the fact that the name makes over $1,000/year in PPC revenue, nor does it consider what someone else might pay if it was offered for sale.

      “domain sales prices have been dropping over the past few years”

      >> For the last several years, my income has gone up annually, and the majority of my income is derived from domain sales.

      “the gTLD`s will kill the long-term value of mid-grade .com`s.”

      >> Well, stop buying mid-grade .com names then.

    • β€œA domain, any domain, is worth what someone else is wiling to pay for it, and not a penny more.”

      Have you read the story on the Whisky.com Sale Yet?
      A domain is also worth how much the seller thinks he wants to let it go for.

  5. I get these all the time, especially with guys with very similar domains that are live. I tend to go back to the analogy of how many beachfront homes are owned by foreign owners who use them maybe 3 weeks out of the year, and if that. As long as they pay their taxes, and mortgage the property is there’s to do with it as they please. I do not understand when it comes to domains names, they do not have a cost associated with them.

    The time it took Elliot to respond to their phone call, and to take away from whatever he was doing has an opportunity cost, and has to be factored into his eventual domain name sale.

  6. >>”and yet despite quoting a $1500 price or $25/month lease was told my price was way too expensive”

    So glad someone mentioned this, as I was just looking for decent opportunity to propose/ask Elliot to start a thread all about the ins, outs, best practices, pitfalls, resources, and positive tips for:

    Domain leasing.

    It’s super long overdue, imo, as I’ve never seen such a thread anywhere before, though admittedly I stopped reviewing the forums some time ago.

    The only place I’ve seen it discussed at all was where there was a huge vested interest to do nothing but promote the leasing related project of an elite few, not any kind of comprehensive discussion to benefit all domainers who may be interested. And that’s exactly what happened.

    So, if you think you can swing it, would really like to see this one.

    As far as end user generosity goes, I’ve been surprised too when someone has no idea whatsoever of the value of top domains. Even someone I helped get set up in business and picked the domain for, someone who also inherited a fortune including a swanky top-neighborhood pad and got rich overnight that way had a similar attitude when I explained to her that top domains cost a fortune. When they say something like “what? I was thinking maybe $50” it can really make you wonder.

    So on another side not here, recently Elliot had a thread about sharing stats. So I just got another domain suitor the other day, and possibly for the first time ever this is what was in it:

    “I would like to make you an offer and purchase the [url here]

    I wanted to ask the following before we proceed, if possible:

    1. How much traffic you get (let’s say average monthly)?, how much of it is from the US? From which channels (Organic, Referral, Social)?”

    Also,

    “We have a lot of experience in this field and I am positive that it will be mutually beneficial for us both to continue this correspondence.

    If any of this data is sensitive to you, we would not hesitate sending you an NDA signed by the BOD, to make absolutely sure we will not forward this information to any 3rd party, and that we have a genuine intent of buying.”

    Lol. Also something pretty rare among my particular “suitors,” there is no apparent shielding of the name of the person and company. It appears to be a successful company with a fair # of employees, so on the surface it looks like it may be an end user making this request, but…it also looks possible that either a domainer or a deep pocketed entity in the background could be using this company that approached me in order to bot get info and get a cheap price on the domain. If I told you what it was, you would agree right away the latter possibility is very possible despite the request for stat info.

    So anyway, it was great to be able to come back to Elliot’s blog and review the thread on this very eventuality, which is what I did. πŸ™‚ God willing I’ll probably reply early next week, and it’ll definitely include a polite version of “sorry but I wouldn’t disclose that in this case under any circumstances, so assume there is no traffic and focus on inherent value, etc.” There’s definitely a reason in this case, although I suppose on rare occasions I might do otherwise.

    Cheers.

    • LOL, I was going to ask and only just realized “BOD” must be “Board of Directors,” cool – so perhaps my new suitor is a heavier hitter than I thought. Would be no surprise for this one, though, I kind of figured it would happen before long which is why I enabled contact outside of private whois.

  7. Well as I have said before there is the paradox of desirability with domain names.

    If more people thought domains were valuable you would sell more domain names for sure. (By the same token you wouldn’t be able to buy some that you have purchased so cheaply also..)

    Anyway, you would also end up fending off more legal challenges from people who would take a flyer on a UDRP trying to get the domain. Or other legal action.

    Even in the case of your torah.com after checking the uspto there are people there who could make a credible enough case to rationalize filing a UDRP and take their chance to try and shake the name loose from you (see a typical domainnamewire.com post..)

    Now of course they probably wouldn’t win but it would still cost you time and money to defend.

    Maybe torah.com isn’t the best example (you are “using it”) but I’m sure there are names you have clearly posted for sale (like the one you are describing) that may fall into the category that I am referring to.

    • Perhaps, but I guess that is a reason I have a general counsel on retainer… just in case πŸ™‚

      He would aggressively defend any UDRP or legal action.

      In all seriousness, this is one of those unfortunate business risks that all domain investors need to consider when building their portfolio.

  8. I’ve had someone like this before.

    The guy who contacted me, honestly thought he was doing me a favor by offering to take ownership of an unused domain name for free. He was surprised when I emailed a price but even so he continued to insist he would make good use of the domain, like he was doing ME a favor by offering this.

    He kept saying he URGENTLY needed this domain name because he had ordered something to be printed. Business cards or something and I assume he must have put my domain name on them. In normal circumstances, his desperation would only serve to increase the price but this guy had no intention of paying for anything. He really couldn’t understand why I wasn’t let him have it. I imagine he must of thought I was being an ass just for the sake of it.

    To be honest, I actually felt sorry for the poor guy because he was obviously brand new to the internet seen as he was based in Africa, probably in an internet cafe. I think he viewed domain names in the same way we might view a Forum username. (Or maybe I was his latest target where he pretends to be naive about domain names in order to guilt trip people into giving him something for nothing. HaHa. It’s possible)

    Anyway, because I felt sorry for him, I ended up writing him a really long educational email that explained domain names and their value. I even wrote a detailed step by step tutorial on how to find dropped domains and how to find a suitable new gTLD domain name for his website. He got well over an hour of my time writing all that but he got the message in the end because I never heard back from him. I wish I could have seen his face when the penny dropped and he realized his own naivety HaHa

    It’s hard for us to comprehend that people might be using the internet for the very first time. Even in the year 2014.

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