It’s Not How You Will Use it But How it Can be Used

I can’t tell you how many times someone has told  me that my asking price is too high because of the size of their business or because of their plans for the domain name. It boggles my mind when some people then become  rude simply because the price and value of the domain name is beyond their budget.

Although most of these inquiries do not materialize into an acceptable offer and are simply ignored, it may be helpful to explain that the value of a domain name is not how the person inquiring plans to use it, but how the domain name can be optimally used. When I explain this, I sometimes offer the following illustration or something similar:

Let’s say you own a piece of undeveloped property in Manhattan. Just because one person wants to  use the land for an urban garden does not mean the property is worth just a little bit of money. There are other entities out there who would love to build a large office building, apartment building, or other revenue generating business on that piece of undeveloped property.

I think the real estate analogy may be a bit tiresome, but I also think people are more familiar with how real estate works than how domain name works. People tend to think only about how they will use a domain name. Instead of looking at the domain name like an undeveloped piece of prime real estate, they look at it in terms of how much the domain name is worth to them.

All of that said, I think domain name owners need to also think about something when discussing pricing. Perhaps this one inquiry is the only inquiry a domain name will ever receive. Instead of imagining how much this domain name may mean to the ideal buyer, perhaps reality needs to set in a bit if that ideal buyer isn’t coming any time soon.

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn
  1. This is a great post and is the exact mentality that I had to develop in order to stop leaving money on the tableand negotiating against myself because I wanted an offer below my expectations to end with a profitable sale.

    Now I make sure each name I acquire has a vision of its ideal buyer and use. I value the name accordingly with what I feel to be a realistic value to that purchaser.

    I’m not uncompromising, but that is my aim, and I no longer hesitate to walk away from offers that fall well short. I also similarly will explain to the poor student or blogger why this name holds more value that their intended use, so they either need to meet my value expectations or find a substitute name.

  2. Ambiguous post comments comes down to think what is it worth to you, what it it worth to me as a re-seller market rules same as it ever was. The difficultly is often access to the right niche I have TheFrenchman (com) for sale average price to the res-seller if I can access the French quarter in New Orleans might get an end user. TheRussian perhaps a Vodka brand user !! TheEnglishman a Saville Row tailor. Accessing the right markets is a tough call.

  3. Amen brother. Own a pure city .com geo-domain and have experienced this phenomenon first hand. The real estate agent value alone is mind boggling–and the fact that no other organization or site can out compete you is hilarious!

    Have seen it in other areas too!

  4. The real estate analogy never works. Those that don’t know just don’t know so they may think should be at junkyard land pricing because they don’t know any better.

  5. But IMHO the silliest question (to be read as “excuse to pay less”) even some big corporate buyers often ask when you are negotiating to divest an ultra-premium one world .com name is “how much traffic it’s currently getting the domain?” …
    Since usually the domain is not developed with a fully-fledged business or relevant content, but just a parked page and, as we know, parked pages are heavily penalized by Search Engines, you can’t infer potential organic traffic from a premium name on a parked page basis … that’s a total nonsense …
    But many companies keep making this BIG mistake, substantially underestimating potential organic traffic and basing their valuation on this wrong assumption.
    Organic traffic for a domain which is just sitting on a parked page is not representative at all of potential organic traffic for that name with relevant content … when you add relevant content the alliance “premium keyword-rich, exact-match domain” + “relevant content” get the name in the very first position(s) on page 1 for that exact term, exponentially driving up CTR, conversion rate and revenue.
    To those “confused” buyers: sorry, you can’t drink champagne and paying for water … 🙂

  6. There’s a good topic related to this. How often do you get asked about traffic, and how do you handle the question? I sometimes get asked when someone is trying to acquire one from me, and I always refuse to give info like that.

  7. Like I once said…
    I don’t care if you want to make a blog about YOUR sex life.
    You can’t have for $500. Get a different domain.

    Not everyone can own the Empire State Building or the original Picasso. Get an office in New Jersey or a poster!

  8. Great post Elliot, thanks! Had someone get angry and rude towards me tonight after I told them they couldn’t have a $x,xxx valued domain for first $25 then $50. They told me I shouldn’t hold domains hostage for my own greed and that I should be ashamed of myself hah. I told them sorry and to go find a different domain they can afford 🙂

  9. Great article Elliot. Joshua I have been there, people do not realize many names we invest in may not sell, it is all hit or miss. I giggle when I tell people what I do and they say “Oh you are a cyber-squatter?” – UMM No I do not buy trademark or copyright / patented domains. Like I have been coding for over 17 years, of course I am going to acquire a lot of names for possible future projects or client needs. Plus most do not realize the long hours that go into this type of work even on the investment side.

  10. I have a very good friend who for 10+ years gave me a hard time about ‘squatting’ on domains. He just saw it as unfair that someone could own a domain without ‘using it’ as he would put it. Although he could never define what ‘using it’ would entail. So I put the single word HI on one domain and a nothing but a red background on another domain. He still argued that I wasn’t ‘properly’ using the domains. So I put up a banner ad for my business on several domains. He didn’t like that either.

    Even though he is politically a Libertarian on almost ever topic, he thought domains should be handed out by some bureaucrat based on what your intended use was for the domain.

    This went on for years and years and I just couldn’t convince him that I wasn’t ‘stealing’ domains (whatever that meant).

    Some people just see domain registration as ‘unfair’ and don’t understand!


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