Valuable Names are Tough to Sell

19

People in the domain space tend to laud those who own the best domain names. I am regularly impressed by the quality of domain names some of my friends and colleagues own. There is one downside to owning valuable domain names – they are not easy to sell for full value.

The best domain names receive inquiries all the time. I would imagine the owners of top one word .com, LLL.com, LL.com, NN.com…etc. domain names receive inquiries and offers every day. It is reassuring to receive regular inquiries for top domain names, but the vast majority of these inquiries will not lead to deals. Virtually all offers are either from people who either don’t understand that these domain names are ultra high value or they simply do not have the budget to buy the domain name.

Obviously an advantage of high value domain names is that they tend to be more liquid than other types of domain names. There will almost certainly be buyers of these kinds of domain names  if they are put on the market. The prices paid for these domain names are reflective of their wholesale value though.

Getting retail prices for valuable domain names is difficult. Despite the fact that the market for domain name assets has matured over the last 20 years, the nature of the market makes it challenging to sell assets at their full value. I am sure the owners of high value domain names appreciate the regular interest from prospective buyers of these domain names. The reality is that getting a buyer to pay what a domain name is worth is quite difficult.

19 COMMENTS

  1. Isn’t a domain name, like anything, worth only what somebody is willing to pay for it?

    So doesn’t that make the statement “the market makes it challenging to sell assets at their full value” just another way of saying the domain is overpriced?

    Note – these are questions, not statements.

    But this is true of all high-value assets – the higher the value the smaller the market, so the tougher to sell, or the longer the wait, depending on your point of view.

    James

    • “Isn’t a domain name, like anything, worth only what somebody is willing to pay for it?”

      Try that at a car dealership next time and let us know how it goes.

    • Elliot you so right,

      the odds of any transaction coming to a fruition is a function of both parties agreeing to a price AND being ‘ready, willing, and able’ to consumate the transaction <>…those are long odds under the average circumstances…

      when the financially ‘able’ part is much further reduced to very small minority by the purse holders inside business orgs’ and there are only so many successful individuals who can/do purchase high value domains out of their own funds (ie founder of hostgator, dropping $ 500k at a time in recent times) the odds of a high value transaction happening are long indeed

  2. Why not simply put YOUR value of the domain name as a BIN price on the landing page and wait to see if any prospective buyer agrees with your assessment?

    • I do on many of my names but not the most valuable ones. This is a dynamic market and conditions change rapidly. I want to assess a variety of things before setting the price. Buying good domain names at reasonable prices is much harder making it very challenging to replace a sold domain name.

  3. At the end of the day, a domain is truly only worth what someone is willing to pay for it or what an investor can prove to an end-user a domain is worth in their presentation.

    If you take any notes from Mike M. or Rick S. .com campaigns on social media, you’ll notice that they are consistent with injecting high-value commentary on assets they’ve invested in (.com in general). Such public campaigning helps with maintaining a value threshhold that assists with closing higher end deals.

  4. Well this post is a bit strange.
    I sometimes I too think that I don’t get high offers for my best domains but let’s not complain we are not selling our premium names.
    I don’t really want to sell my best names and so my price is going up.
    I am lucky to have a few good names and that is much better than not having them.
    Premium names are worth the wait. A product may come up in 10 years that might match your domain name. If there is no such product today you will not get what you think is top dollar.

    “Isn’t a domain name, like anything, worth only what somebody is willing to pay for it?”
    Not really. That is true AFTER the seller has agreed to the buyer’s offer. And that is for that moment in time only.

    • “Isn’t a domain name, like anything, worth only what somebody is willing to pay for it?”

      Realistically yes, the domain is only worth what it would get at auction.

      The hard bit is getting way above that, it means waiting a long time for a buyer who really needs that specific domain and has the funds to match, the two factors combined are a rarity.

  5. Premium names sell, albeit slowly. Unless you’re in the business of selling to other investors with a 10% margin, it could take 5+ years before your high-value name sells to an end-user. And you need to be able to say “no” to lots of mediocre offers along the way – waiting for the right price. It’s a buy and hold game, which means you need to be able to afford to wait. Don’t invest all your money in your portfolio and put yourself in a situation in which you NEED to sell your inventory. Otherwise, you put your buyer in the power position. Premium names yield lots and lots of (primarily low-ball) offers. Be willing and able to wait for the right number. Just be sure your expectations are in line with reality.

    To add some color to my post: The most over-used word in the domain industry is “premium”. Your name isn’t “premium” just because you call it “premium”. If your name has comparable sales of US $1500, it’s not premium. If your name has comparable sales above US $50k, it’s premium (I suppose this threshold is open for debate – and perhaps a good topic for another post). I mention this because many investors mis-label their inventory and set their own expectations inappropriately. Know the comps and set a realistic price. Know whether your names are premium or not. Use past sales data so that you don’t under-value nor over-value your names.

  6. Agree, the average one word .com is still likely to take 20+ years to sell if you want what domainers would term “retail price”. There is a reason why such prices are way above auction prices and that is because the probability of a sale in any given year is very low.

  7. Would you recommend selling a domain name on your own, like waiting for people to contact you, or going through a company that sells domains and they take a cut?

    I’ve bought and let go so many domain names now….thinking they would be an easy sell, only to discover that they were not !

    Cheers…George.

Leave a Reply