‘Why Is It So Much More Expensive Than This?’

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The other day, I was negotiating the sale of a domain name with a prospective buyer. After sharing the price of the domain name with the buyer, I was sent what was considered to be a comparable domain name at a much lower price. In reality, the domain name that was sent and priced less was a non .com domain name that matched my .com domain name.

The prospect asked why my domain name was so much more expensive than the comparable non .com listed for sale on several marketplaces. Although I think it should be pretty obvious to most people why the .com domain name is worth many times more than the non .com domain names, I used a real estate analogy to keep things simple.

I described a new 5,000 square foot home located in the middle of South Dakota. The price might be somewhere in the $500,000 range give or take. The price may or may not seem expensive to you depending on your own location, but when compared to a 5,000 square foot apartment in a doorman building in Manhattan, that $500,000 would be cheap. In fact, you might be looking at well above $10 million for that 5,000 sq. ft. home in NYC.

For many businesses, particularly those that rely on their online presence for sales and marketing purposes, having the brand match .com domain name is critical. This is the case whether it is a one word .com or even a four word .com. I think a non .com domain name is less desirable for many reasons, and the value will be reflective of the lower demand and interest. Non .coms work fine for many people and companies, but there is a reason for the gulf in value.

I have found that people don’t always understand domain names. That may be why I see $100 offers on my 25 year old domain names on a weekly basis. People tend to understand real estate a bit more. It’s all about the location. When educating someone about the value of a domain name, I like to illustrate it with something that resonates. I have found that discussing real estate with someone who doesn’t seem to get it helps them understand.

About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.

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8 COMMENTS

  1. “I have found that people don’t always understand domain names”

    Hate to tell you this–they do understand , they just want to F with your mind and waste your time.

  2. All my work for the cause all these years can’t be undone that easily.

    That is the “residential real estate” analogy.

    We’ve already been over that for years and years, and this blog post is straight out of the early 2000’s in that sense.

    It’s time to bring even outsiders past the “residential” analogy and include the more accurate and complete “commercial real estate” analogy.

    The *deplorable* reality is that even too many “domainers” themselves don’t even understand domain names and only think in terms of the residential real estate analogy.

    The residential real estate analogy is without doubt what most people understand first. So fine – you (the collective “you,” not singling out Elliot) want to use the residential real estate analogy for convenience and immediate efficiency? Go ahead and use it. But don’t leave out the more accurate and more complete truth – the commercial real estate dimension.

    Or yes – leave it out if your goal is to perpetuate and exacerbate the cause of every influence, actor and element in society that wants nothing more than to hurt your cause for their own benefit at your expense and have been doing so rather successfully for years now.

    But wait – there’s more. There is not just the more accurate and complete “commercial real estate” aspect of the matter, but there is a third dimension too: the “prestige” or “cache” real estate or asset analogy.

    Many domains are great Internet “commercial real estate,” but some are not only that but also fully or significantly incomparable in terms of the added element of prestige and cache in the public consciousness and mind. Some are even nothing less than “sui generis” in that regard (helps to have had Latin back in school).

    So regarding this topic, this is what even domainers need to continually remain cognizant of:

    1. The residential real estate analogy. Nothing but a staring point. A good one to be sure, but also woefully incomplete. You only hurt your own cause and the larger cause of us all in general if you ignore that.

    2. The more accurate and complete dimension of the commercial real estate analogy.

    3. The rarefied but at the same time not so rare dimension of prestige, cache, historical and societal significance and “evocativeness” – on a case by case and specific individual domain basis only – over, above and beyond commercial value only, as if the commercial value alone was not enough. And because of that, a specific domain can be even more valuable commercially than otherwise just as great domains which do not include that element.

  3. The solution is put up BIN prices only.

    People are trying to “boil the ocean” hoping to educate the people making $100 offers, most people think that way and always will. They have a $100 budget, end of story.

    • Snoopy is missing the point again. It’s simple game theory.

      A quick and polite reply takes very little time. If they are a timewaster it’s quickly handled and if they are someone who are very serious, you can demonstrate how serious you are about the price range. If they are semi serious (a business who are initially shocked about the price) your words may linger with them and they may come back.

      Snoopy’s comment about boiling the ocean doesn’t make sense here because the prospect that Elliot is talking about is an inbound prospect. Very different from the average Joe in the street.

  4. Snoopy is not correct. I had one big sale last year that resulted from precisely the kind of inquiry under consideration here – a bona fide commercial end user just genuinely in need of a little “education.” I’ve also mentioned it in the blog comments since.

    But wait – there’s more.

    Not only a nice big sale (well, a nice five figures for a three word domain) resulting from taking a few moments to address an inquiry like that – but another one to the same buyer as well right after, making two, both nice five figure sales for three both word domains.

    Then I took most of the sale proceeds and bought a really great expensive two word domain as an end user which I’ve been using since.

    This was divine providence and a good illustration of how adopting a snooty and one size fits all attitude full of assumptions about responding to people is a big mistake. At least for most people not holding the few most valuable domains from the 90’s.

    • “Excellent analogy, Elliot,” as if that analogy hasn’t been the oldest and most regurgitated analogy for decades already? Seriously, as in for real? Wow David J Castello, you just went waaay down in my book.

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