I received an inquiry on a domain name a couple of weeks ago through a DomainNameSales.com broker, and I priced the domain name at $75,000. In the course of the negotiation, the prospect mentioned to the broker that he had seen the domain name listed for sale on Sedo for $30,000 about 6 months ago, and he made a $30,000 offer to the broker. He also wanted to know why the price increased by such a large margin in a short period of time.
Prior to this experience, I hadn’t really thought about tracking down a domain name’s price history before buying it, but perhaps it is a good idea.
When you are buying a good or service at a store, the price rarely changes by much over the course of a year or two. If the price does change, it’s not generally drastic unless there is a reason that most people would know about (shortage, storm, illness…etc). With real estate, there are price fluctuations, but they tend to be more gradual unless the seller wants to move a property quickly, and the changes tend to be more publicly known and go with the market conditions.
The domain name resale market is a dynamic market with lots of variables that go into pricing, and end user buyers may not understand the rationale for price changes. Explaining how a company prices its domain names may also be challenging for an end user to understand since people sometimes price their domain names without much rhyme or reason. Knowing how a domain name was previously priced can give you some perspective from an end user’s point of view, and it can give you some more insight into the saleability of a domain name.
I mentioned what happened to me to a couple of people, and from them, I learned that many buyers spend months looking at a particular domain name and analyzing the impact owning it would have on their business. Some end users aren’t quick to make a purchase decision, and they can mull it over for a long period of time – sometimes without even contacting the domain owner first. When the price of a domain name changes for no reason, it can be a surprise to them.
If possible, knowing the price history of a domain name may be a good idea for a domain owner, and you might want to keep that in mind the next time you buy a domain name in the aftermarket. If you already do this, I’d be interested to know how you track down and record historical prices for domain names.