“That Domain Name Isn’t Worth Six Figures”

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I am not sure about you, but I regularly receive a reply from a prospective buyer who tries to tell me my domain name is worth less than the price I set. “That domain name isn’t worth six figures,” or something along those lines, is a response I receive on a regular basis. It’s like somehow the lawyer, software engineer, or digital marketing manager is also an expert in domain name valuation.

Despite an obvious lack of knowledge about domain name values, some people are quick to opine that a domain name is overpriced. Domain name valuation is subjective (and dynamic), but there is enough information and data available that a buyer should at least be able to get an idea about what a domain name is worth before inquiring about it.

What works best for me is replying by asking them how they came to the conclusion that the domain name is not worth six figures. When I respond to offers, I usually provide a list of domain name sales I believe are somewhat comparable, so asking them for insight as to why my domain name is not worth an amount similar to other comparable sales I shared is usually disarming.

More often than not, the prospect will reply by mentioning that the domain name is not worth my asking price to him or her. Most people don’t seem to go to the effort to find comps that are in line with their valuation or offer. I typically respond by reminding them that the domain name’s value does not correspond to their usage of the domain name but to the potential usage by anyone.

Sometimes this works and the buyer gains a better understanding of why I priced the domain name at the level its priced, and other times the prospect gets frustrated that the domain name is worth more than they have budgeted or can afford.

At the end of the day, I think this is a relatively non-confrontational way to educate a buyer.

14 COMMENTS

  1. As I’ve mentioned the enormous supply of domains generated by the GTLDs has created more surly and acrimonious buyers. I hear comments like this every week.in the past just a few each year.

    • The same can be said about any domain name price that far exceeds the offer.

      Also, just because you haven’t received a six figure offer yet doesn’t mean it is not worth six figures.

      • Could be the case, but most of the time those people are right when they say it is not worth the price. The typical domainer sells less than 1% of inventory a year (i.e. most names will never sell at the asking price).

        It is all about trying to get top dollar on a small number of sales rather than market value on everything.

  2. “Domain name valuation is subjective (and dynamic), but there is enough information and data available that a buyer should at least be able to get an idea about what a domain name is worth before inquiring about it.”

    You would think so but I don’t think buyers have a clue where to start. Maybe you should do a post outlining all the possible ways to value a domain so it can get indexed in Google and that way when they do a search your post will pop up explaining it for them. It would help us all.

    • No, they do have a clue, and it’s the various automated “appraisal” tools they either see at a registrar or have already heard about, which make them believe what they are seeing is somehow really an authoritative “appraisal.” That plus highly visible domain industry insiders themselves legitimizing and effectively endorsing such “tools” then poisons the entire market. Bravo, way to destroy oneself from within.

  3. I respect you as a domainer but i disagree quite a bit. If the domain name is an exact match keyword and has the search volume then okay. Comparable sales to me would mean nothing. Just because one idiot pays $600,000 for a domain doesn’t mean Im willing to pay that amount or anywhere close to that.

    All 1 word tld domains okay maybe.
    3 letters tld domain okay maybe.

    Brand names and everything else if it doesn’t have search volume to back it up, the value is subject to interpretation. What it could be falls under interpretation as well.

    • For my purposes, these would be very comparable and relevant sales.

      For instance, when someone inquiries about EventPlanner.com, I would share public sales like Event.com ($165,000) EventPlanners.com ($43,750), EventPlanning.com ($40,000), EventsManagement.com ($25,000)…etc. I am not talking about saying something like Super.com sold for $1.2 million, so SuperAwesomeCool.net must be worth six figures.

  4. When I supply comps in domains it seems to just anger them. Never happens with comps in real estate at least for me .Many people still think a 6 figure domain is worth 50 USD. It’s insane

    • I’d say in 95% of cases it is about their budget not what the name is worth. So the typical buyer (someone starting a website from home) really only does have a $50 budget no matter what the name is worth.

    • I agree with Snoopy. If they think it’s worth only $50 USD, I decide that they are not the right buyer of my property, I wish them well in finding a domain name that matches their budget, and I immediately move on.

  5. One way re-set the price expectation of buyers if you have really really good domains is to ask 500k at the start so when they are outraged and think the price is completely insane they have this thought process with the 500k figure so paying 150k-200k-250k later becomes more acceptable in their minds.

    Most of the times the problem is budget and for those create a transaction where they can pay over time and use the domain in the mean time.

    Also many think in terms of marketing budget or advertising budget so re-programming their thought process to consider buying a domain part of their marketing and advertising budget makes buying the domain for say 250k much more acceptable in their thoughts in cases where they spent 500k a year in marketing and advertising and calculate buying the domain at say 250k over the next 5 years so it becomes 50k a year and that is just 10% of their marketing and advertising budget of 500k.

    In cases of startups upgrading their domains find out how much they have funding and calculate the pricing based on that for them.
    If the startup has 5 million in funding buying a domain at 250k is just 5% of that.

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