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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.
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.
Comments
As also Rick Schwartz said, if you own several thousands "pigeon shits", you have just a lot of bills ...
I'm pretty sure my entire portfolio is guano. I'd gladly take $1,000 for any one of them (or realistically for 50 of 'em).
On point.
Thank you for sharing your opinion. This is a wake up calls to all domain investors, that's including myself
We allowed the domain market to get out of hand. Managing expectations is key, a key domain investors has misplaced...
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 prices. I see lesser names with ridiculously stupid prices of ten or twenty thousand. And the names suck.
My average sale is about 1,000% markup over cost, with many much higher. I'm satisfied with that, without being a greedy pig.
Sure, I have names priced in the tens of thousands of dollars, but these are my very valuable, in demand names.
The mistake most low to mid level domainers make is not putting a Buy Now price on a name. BIN is incredibly powerful. I've heard why people don't do it -- they think, hey what if the buyer is a person that really needed that particular name and would have paid 10x the amount! Well, that's life. You win some you lose some. I'm nearing a million in sales and my domain purchase cost was 8% of that. It's mostly hundreds of names at my sweet spot pricing, and a few more and a few less. I like seeing sales every week.
The other thing they do is when in a "offer counter offer" situation, they start out with a very high unrealistic price, just in case the buyer says yes. The problem with this is that either the buyer just walks immediately, or the seller has become emotionally invested working from that first price and not coming down enough to sell it.
The vast majority of domainers are, well, to put it honestly, stupidly unrealistic. Maybe even just stupid. I was one of those people the first few years as well.
Great feedback Mark. I think that over time the economics force many people to become realistic about their domain prices.
There are Economic .COM Profit Center Valuations that are based on pure traffic potential Compounding, that .COM site holders ONLY can enjoy. This can only be accomplished with Marketing Strategies that DO NOT INCLUDE Google Ad Support. Actually most All Good Domains chances of Gaining back ALL the traffic meant for their site, are increased OUTSIDE THE GOOGLE Traffic Rustling Maze.
So if your analytics are Google-Centric, you may want to reconsider Valuations Outside The Google System as more representative of the true Economic Valuations, some savvy .COM End-Users are aware of.
Google has been on the prowl since their Market Inception, to undermine or replace domains as a tool for navigation. Their massive Advertising campaigns dissing .COM Profit Centers Assets as having low valuations, permeates the Valuation Psyche of many in the domaining Industry.
This concerted Google-Centric characterization, needs to be realized by all domainers as a frauduleht Valuation Model. Yes maybe we should consider the .COM Asset Class as being much more valuable Outside of the Google SEM Model. The Google Garden Maze, devalues any and all participants sites within its Traffic Stealing shell game, that in effect exposes all Google Ad participants to massive loss of Traffic to the participants most dreaded Competitors.
This Co-Mingling of .COM Brands within the Google Matrix (Adsense), creates a floating pool of Shanghaied Traffic, which Google then distributes network wide, at the expense of Google Ad supporters.
Long story short Domain valuations are reduced for all Google participants in this ingeniously deceptive Traffic Rustling Corridor. There are Domain Valuations within the Google Traffic Trap that are much lower than the true Economic Valuations being experienced by Site Owners that bypass Google.
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master http://www.UseBiz.com)
Congratulations Rick Schwartz on being the Greatest Domainer of all time. You realized early on that the .COM Profit Centers Traffic flow being intercepted and redistributed by Google, built the Google Empire. Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master http://www.UseBiz.com)