At various times throughout the year, GoDaddy team members host webinars/chats to discuss buying and selling domain names. During the NamesCon conference, GoDaddy VP Paul Nicks and other members of his team also offer advice about domain name sales, specifically related to GoDaddy’s platforms and network. At some point in the near future, I would like GoDaddy to have an in-depth discussion about domain name pricing and price strategy.
When it comes to listing my domain names for sale on Afternic and elsewhere, I use a combination of three factors:
- Gut feel based on domain name market and topical knowledge
- Price I paid to acquire the domain name
- GoDaddy appraisal
The first two factors are the most critical to me, but the third factor is important when listing on Afternic / GoDaddy because of the prominent role the appraisal plays in the purchase process.
While I tend to have a good idea of where I am going to price a domain name as soon as I buy it, I sometimes struggle a bit with setting an exact BIN and offer price on inventory I want to sell as quickly as possible. I will give you a real life example to show the issue I have, and I think that will help illustrate why I think a GoDaddy hosted discussion about pricing strategy can help me and others.
I bought HDVenture.com at GoDaddy Auctions for about $20 last week. The name was provisioned to my account last night, and I set up a landing page and pricing this morning. This is a name I would be happy to sell quickly for $1,500. If I received an offer for $950 today, I would probably move it because it’s the type of domain name that is relatively easy to replace. GoDaddy’s appraisal is $1,759.
It would be helpful to know at what price this domain name is most likely to move quickly. Would GoDaddy recommend listing it for $1,499 or an even $1,500? Should I list it for $1,497 like some of the discount stores to give the impression that it is a reduced price? Am I leaving money on the table by not listing it closer to the appraised value? It would be helpful to know if there is a certain percentage discount from the appraised value that moves customers to buy a domain name right away. Maybe the appraised value does not factor in to a decision? Maybe the price being below a certain price point, say $1,200, is what is important when it comes to lower value domain names? Maybe pricing above $1,000 is elastic, so if I am going to list it above $1,000, I might as well maximize the return and list it for $2,500. I do not have the data to guide me, but GoDaddy does.
In addition to setting a good BIN price, I would like to know where I should set my minimum offer. On a name like this, I don’t want to have a long negotiation for a few extra dollars. I also don’t want to set the price too low that someone opts to make an offer rather than simply buy the domain name. On the other hand, if someone came in at $800 this afternoon, I might take a quick deal on a name I bought for $20.
Ultimately, much of the analysis I’ve done here is done in 5 seconds in my head before listing domain names. This might be detrimental to me because the prices I set may be based on how I feel at the moment. If there was more information available about price setting on inventory, I think it would be helpful to me and to others. I am sure I could ask GoDaddy to share some intel privately, but I think asking publicly could benefit a wider audience if the company is willing to share insight based on the data they have.
Go with the gut. Thank your lucky stars for godaddy appraisal concerning .com It really legitimizes a ~2k price on many domains to endusers. I hate automated personally, paying 0 attention, but good for you, it’s advantageous. Wouldn’t over think it much. That said…
I don’t know if ‘make offer’ leads to more $ or not, but honestly, if u have a feel for domaining and your gut instinct! You know, use all your existing domains / pricing experience to rate each individual.
Thinking further, I would set a ‘make offer’ minimum only 20% lower than your BIN. Too low and you sow a lot of doubt into their mind.
Great post Elliot. I agree with everything you said.
You’re addressing two issues really.
First, you’re recommending sort of an advanced pricing recommendation system. The industry needs to make strides on this, and GoDaddy/Afternic are well-positioned to lead the way. Better data = better results. Agreed.
With regard to the specific domain, hdventure.com, there wouldn’t seem to be a vast pool of potential buyers. hdventure is not a generic service. There is hdventurecapital.com. Is that who you have in mind as a potential buyer? Who else would want to own such a specific name? Not to crit too much. You have proven your smarts time and again. But maybe you can speak more to your thought process when you were purchasing this name.
Good question.
With domain names like this one (HDVenture.com), I don’t put any thought into specific prospective buyers. To me, names like these are < $100 flyers. That said, HD is a meaningful acronym for High Definition / HiDef / High Def, and my thought was at some point in the next few years, a company will want to start some sort of high def venture or venture fund. Alternatively, someone with the initials HD or partners with the HD initials might want to start a venture with the HDVenture.com domain name. When (hopefully) that happens, the prospective buyer will see this matching domain name available for less than $1,500 and jump on it. If I am wrong and in 5 years it hasn't sold, it's somewhere around $60 in lost investment capital. I don't sell a ton of names like this, so maybe I am wrong, but in terms of overall ROI for a portfolio of flyers like this, I have done well enough to keep expanding.
A name like HDVenture.com would chances are be purchased by someone that has funds to pay more for the domain. Anyone getting into the venture game doesn’t have funding issues. They would easily pay $1,500 just like they would easily pay $5,000. For a 20 buck investment I would have no issues listing this at $5,000. They may “think about it” at $10,000 but not at $5,000. Let it fly as they say. 😀
You might be right, but I would rather make it a no-brainer.
Makes sense. Thanks for elaborating.
I recently had a godaddy buy domains broker quote me their automated price showing $2,xxx, saying that I was getting a good price, I was expecting 6x that price, and I’m glad I stuck with my instincts as the buyer ended up being a multi million dollar best selling without, and enterpriser, whois address traced back to a very nice 9,000 square foot mansion.
There ya go, reverse engineering the whole idea of how automation might help us sell meh names for a constant 2k.
Regarding ” it’s the type of domain name that is relatively easy to replace” – could you add some details how to detect that domain is easy to replace?
what if there is a huge difference in Godaddy and Estibot appraisal. Like for one of my best names printers.info being appraised for $3500 on godaddy and fr $110000 on Estibot