Part 1 - How to Price Your Domains for any Market

Part 1 - How to Price Your Domains for any Market

As I’ve stated in a previous article, pricing domains can be a difficult task. Many domain owners firmly believe that the price completely depends upon the buyer. The problem with this position is that it runs contrary to the fact that priced domains are more likely to sell. In this article, I’m going to attempt to put some mathematics behind pricing domains in ANY market vertical.

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I made my first attempt at pricing domains in an article last year. At the end of the article I suggest that a lot more thinking needed to go into the model…..so here goes!

I’m a firm believer in economic theory and the rules of supply and demand. High prices are the result of a combination of high demand and low supply while low prices are a function of both large amount of supply and low demand. You can see the rules of supply and demand all over the business world; from oil and iron ore right through to dog food.

Supply and demand lead me to attempt to build a demand curve for a set of keywords in a market vertical. I entered mortgage, loans and finance into Google’s keyword tool and out popped 703 keywords with both the estimated volume of traffic, recommended price point and demand (ie. competition) for that keyword.

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Why My Mother's a Genius!

Why My Mother's a Genius!

There’s nothing worse than when you feel you’re thrashing. If you’ve never heard of “thrashing” then you’re likely to be one of the few lucky individuals that have never experienced it either. Thrashing happens when you have so much on your plate, you end up jumping from one activity to another and never completing anything.

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Thrashing originated as a computer term to describe the hard drive head as it moved across a platter of disks. When users add and delete files, disk fragmentation occurs and the hard drive head has to jump like a jackrabbit all over its surface in order to access a single file. In a non-tech talk.…you hear what sounds like mice scurrying around in your PC.

The technical boffins solved this problem by constantly “defragmenting” the hard drive and rearranging all of the file parts so the hard drive head moved to one spot to pick up the file. We can learn a lot from this approach.

So the other day I found myself on three IM chats, a skype conference call, emails pouring in and a things to do list a mile long.

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The Quality of Your Domains

The Quality of Your Domains

This is one of the most difficult topics to cover and it’s easy for a domain investor to throw their hands up in the air and say, “It depends on the buyer.” Although this is a true statement, it is sometimes used as an excuse for lazy thinking. Let’s begin to unpack this most difficult of topics.

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For a start, everyone will have different opinions on pricing and much of it will be tainted by their own experience. Selling a domain for a lot of money doesn’t make you a genius, it just means you’ve sold a domain. What makes you smart is if you’ve had a deliberate strategy for the sales of your domains and that strategy is unfolding in a successful outcome.

A fundamental error that many domain investors do is look at their portfolio of a thousand domains and multiply it by an average sales price of $1500 per domain. They then congratulate themselves on owning a $1.5 million-dollar asset. If this was true, then what would stop you from buying 9,000 more domains so your portfolio is now worth $15m?

The reality is that unless you have a very unusual portfolio, 90% of the domains aren’t getting any offers. If you look at your offer stream over the past 10 years (assuming you’ve been around that long) then you’ll probably discover that number is pretty close. This of course, depends on the quality of your domains…..more on this later.

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Saturday Musings - Whizzbangsblog's Upcoming Anniversary

Saturday Musings - Whizzbangsblog's Upcoming Anniversary

Last night we invited a couple of friends around for a barbeque. It’s a quintessentially Australian thing to do and no, we didn’t have a shrimp on the barbie (besides, we’d have prawns). I find there’s nothing quite as relaxing as sitting outside watching the sun set while you feel the cool refreshing breeze on your face.

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It was then that it hit me….I’ve been blogging for nearly ten years! After checking the whois on whizzbangsblog.com I found the actual ten year anniversary date is the 7th April! Time flies when you’re having fun!

One of the things I most cherish is hearing from you, the readers of whizzbangsblog. Each comment spurs me on to keep writing and digging into all the possibilities that business and domains represent.

I don’t think I’ve ever asked it before but I would love to hear from you about whether you find the articles helpful, challenging, funny or something else altogether. Also, it would be great if you could let me know which articles you have enjoyed reading the most.

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How to Sell a Domain to Your Target Market?

How to Sell a Domain to Your Target Market?

There’s a great discussion taking place over at the domain forum, NamePros, where one camp is asking why businesses don’t buy domains for thousands of dollars well another group is suggesting that is way too much money. The fundamental question that needs to be asked by a domain seller is, “Who am I selling to?”

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The vast majority of businesses in the world are small not large. These are often the family owned firms that may be running the local pizza shop or printing company. They may or may not have a website and given their clientele are within a few miles of their business they often have little need nor desire to expand to the rest of the world.

A successful small business is often one that allows the owner to pay themselves a salary. Remember that 80% of small businesses fail in the first couple of years largely due to lack of capital.

To ask a small business owner to put their hand in their own pocket and buy a domain name worth $10,000 plus dollars is a huge step. They are likely to decline the opportunity because they would rather buy a car or take their family on a holiday instead. One of the reasons why most domains sell for $1500 is because this large market has individuals within it that are prepared to risk smaller amounts of money.

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