Stop Pricing Burger Domains at High End Prices

Many domainers need to appreciate that we live in a world where the is massive oversupply of domain names and a steady demand. Sadly, the domains in your portfolio are not immune to this state of affairs.

Escrow.com

While on my recent trip around the world I met a domain investor that has several thousand domains and hasn’t sold any in the last few years. It was clear that they were getting a little desperate as the renewal fees kept on coming in each year. My advice was to drop the majority of their domains and take a look at the price of the ones they just can’t part with.

Just think about it for a second. What business model was the domain investor I spoke with applying to his domains? Was it the stock-turn or high value model? He was actually unclear and the result was no sales.

Many domain owners should actually be in the stock turn game where they are trying to sell 1-2% of their portfolio each year at an average price per domain of around $1,000. The problem is they have big prices on their domains and no sales result. They aren’t actually realistic about the pricing of their domains as they fall in love with much of the hype promoted by the “big sales”.

It’s like trying to sell a burger as a $200 five course dinner at a high end restaurant. Despite the burger being a awesome, no one in their right mind is going to pay $200 for one. My advice is stop trying to sell your burger domains at ridiculous prices and get realistic.

Let’s do the maths. If you’ve hand registered a domain at $10 and sell it for $1,000 then the return on the investment is 10,000% which sounds pretty good to me. The challenge is to repeat this over and over again NOT get more for each domain and scare away potential buyers.

If you have your domains priced at around $1,000 and you aren’t getting any enquiries, then you’ve really got to reassess whether they are sellable. You may believe in your heart that the domains are really awesome but the market is telling you something different. Stop listening to your emotions and go with the market…..after all, this is business.

I’m really sorry that I may have upset a few domain investors with this article but the sooner you become realistic about your pricing the better the financial shape you’ll be in. Don’t be fooled, although the massive influx of the new gTLDs haven’t really changed the top-end .com domains they have sorted out the wheat from the chaff with a lot of the others.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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whizzbang
You are absolutely right. The sweet spot for my domains are in the $500 - $2,500 or so range. And I sell a lot of them at these p... Read More
08 May 2016
mgilmour
Great feedback Mark. I think that over time the economics force many people to become realistic about their domain prices.
09 May 2016
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3 & 4 Character Domain Clean-Out!

A ParkLogic client is cleaning out over 80 three and four character com/net/org domains! Some of the domains contain repeatable characters like pppp.net and there are a number of three-character dot net and org’s as well.

Escrow.com

The domains are priced to sell and we anticipate that they will be snapped up quickly by a buyer. The first buyer to reach out to Chris (see contact details below) and make an acceptable offer will secure the portfolio.

The domains will not be sold piece-meal but rather as a complete group. If you are interested in getting the full list of the domains then don’t hesitate to reach out to Chris Leggatt. He can be reached at “cleggatt at parklogic.com”.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

 

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Buy and Selling Traffic Portfolios - Part 1

I was reading a forum recently and another domain investor was asking about how to price and how to buy traffic domain portfolios. It was a really interesting question that caused me to think about how I price my own portfolios and what I look for when seeking to buy.

It should be stated right up front that everyone has a different risk/return appetite. Some people love to live on the edge and push the limits while others prefer to have a more sedate, stable investment profile. Whatever your risk/return ratio I’m sure that you will appreciate the following pointers.

Traffic domains are typically sold on multiples of months of revenue. So if a domain was earning $10 per month from being “parked” (ie. advertising revenue) then you may pay 24 months revenue for this domain. This would make the purchase price $240. Note that this equation inherently takes into consideration the registration cost of the domain for the two years.

The number of months that you pay for a traffic domain is greatly influenced by a number of factors that I will go through in this series. How much you are willing to pay will ultimately depend upon your risk profile. As a benchmark a domain traffic portfolio typically sells for 24 months revenue but like I said this can be dramatically influenced by your risk profile.

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