2 minutes reading time (394 words)

Why I was Wrong About Domain Sales

20190516_domainindex

I need to apologise to readers….I just received some data from Escrow.com that proves that I was completely wrong about the size of the domain sales market. Back in August 2017 I estimated the market to be around $250m and what the latest Escrow data proves is that I was wrong…..by a long shot.

Escrow.com

According to the report, Escrow.com alone sold around $340m (all quoted values are in $USD) in domains in the last 12 months. By far the biggest market was the USA which did just over $60m in the first quarter of 2019 with Canada coming up a distant second with around $8m in sales.

Assuming that Godaddy sells domains for an average of $10 each (many ccTLDs will increase this number while large volume new gTLDs will depress it) then their aftermarket does around $450m in top line revenue (2018 financial year). On top of this you have Sedo and the smaller marketplaces so it doesn’t take too much effort for the size of the domain sales aftermarket to be above $1b. This means that I was out by a LONG way….so much for guesstimations.

What I found really interesting in the Escrow report was the price received by domains with or without content. It’s clear from the chart that buyers are looking for built domains and they’re prepared to pay for it. In the most recent quarter, the average price of a domain with content sold for just under $10,000 while domains without content sold for around $2500. That’s a BIG difference.

By total volume in sales, domains without content make up the lions share of the total sales. For instance, the total sales of just domains in Q1 2019 rose to $54.8m while domains with content sold for $15.2m. This would suggest that there are a lot less domains being sold with content at higher prices….which makes sense when you think about it.

There’s a LOT more information in the report that I will endeavour to pull out in subsequent articles but needless to say the domain sales market is alive and well. In fact, every valuation chart in the report is showing an upward trend in sales value.

In full disclosure, Escrow.com is has been a proud sponsor of whizzbangsblog for many years. That being said, this has had no impact on the writing of this article.
 

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Comments

Guest - Snoopy on 17 May 2019

The "domains with content" is an outlier compared to prior months.

Overall this data is not saying it is a good idea to develop domains. In many areas something developed won't even be worth the cost and time to do the development even though it could sell for more than the "empty vessel".

The "domains with content" is an outlier compared to prior months. Overall this data is not saying it is a good idea to develop domains. In many areas something developed won't even be worth the cost and time to do the development even though it could sell for more than the "empty vessel".
mgilmour on 20 May 2019

I completely agree with you on this point. What is also important is what is the profitability of building a site.....even it is sells for more with the content, the cost could greatly outweigh the benefit.

I completely agree with you on this point. What is also important is what is the profitability of building a site.....even it is sells for more with the content, the cost could greatly outweigh the benefit.
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Sunday, 18 August 2019
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