Argument Against BIN Pricing | DomainInvesting.com
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Argument Against BIN Pricing

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Most domain brokers and domain name marketplaces encourage their sellers to set buy it now (BIN) prices for their domain name listings. They correctly cite the higher sales rates for the BIN names as a reason for sellers to list domain names with BIN prices. While this is true, I don’t think it always works to the benefit of the seller to use BIN pricing.

Let’s say you bought or hand registered 50 average to below average “Western” 4 letter .com domain names a few years ago. These names, which now may be considered “Chips,” have the letters Q, X, W, and Z mixed within them. By US and Western standards a few years ago, these names generally weren’t anything special and could be had for registration fee or a bit more. If you decided to listen to the advice of domain marketplaces and set “aggressive” BIN prices of $750/each, you would have sold all 50 names at some point in the last several months. That once aggressive pricing is now considered a steal.

Before the last several months, I can’t recall seeing fast moving trends across wide swaths of names like we have seen. There have been quite a few “buy outs” of specific types of domain names that have driven up prices. People who had buy it now prices on their names may have undersold them because they weren’t monitoring these trends. Some might say they should be happy they got the prices they wanted, but I am sure many left money on the table.

Buy it now pricing is better for buyers because it reduces uncertainty. The buyer doesn’t have to worry that the seller will jack up the price once a negotiation begins. On the flip side, it can hamper the owner’s ability to sell domain names for the current market value, unless the prices are adjusted regularly. Constantly adjusting BIN prices seems like quite a bit of work.

I’ve never really been a proponent for setting BIN pricing. I feel like a buyer’s needs and a marketplace’s needs can be divergent when it comes to this topic. The crazy domain market in 2015 (and even 2013-14) really illustrates why setting BIN prices might be a bad idea.


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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Comments (20)

    Spencer

    every successful investment needs an exit strategy

    November 25th, 2015 at 10:30 am

      Elliot Silver

      What does that have to do with BIN pricing?

      In reply to Spencer | November 25th, 2015 at 10:31 am

      Spencer

      Setting a price that automatically triggers your exit from the investment can protect you from longer term downside risk. Assets do not always necessarily move in one direction, Eliot.

      In reply to Elliot Silver | November 25th, 2015 at 10:35 am

    Recons.com

    So, the whole argument is based on explosive growth in short period for one category of domains (Chinese Premium LLLL.com)?

    No data, no other information to support this, no analysis showing that somehow having always bidding with no bin will in average result in higher sales, but still recommending people to follow that path?

    November 25th, 2015 at 11:11 am

      Elliot Silver

      I don’t really care what anyone else does with their domain names, nor am I making any recommendations. In fact, I have 100+/- domain names with BIN prices.

      I am sharing my opinion on why it might not be wise to set BIN prices, which is contrary to what many brokerages recommend.

      In reply to Recons.com | November 25th, 2015 at 11:18 am

      Elliot Silver

      In addition, it’s not only based on LLLL.com “Chips.” If you had speculated on 3-6N .com domain names and set BIN prices, you may have also undersold. Same can be said about LLL .com names or even 5L .com names. Heck, even if you bought some short and/or numeric .XYZ, .CO, or other extensions that have seen a sharp rise in demand, you may have undersold.

      I’ve never been a fan of BIN pricing, except for domain names I don’t really care much about.

      November 25th, 2015 at 11:22 am

      Anon

      Ultimately, I don’t really care much about any of my domain names. I’d rather be handed my desired cash amount today than hold a bunch of domain names increasingly at risk of obsolescence as time goes by. Sell at your minimum required ROI on your investment, be happy, and move on, IMHO.

      In reply to Elliot Silver | November 25th, 2015 at 3:22 pm

      mansour

      Elliot
      The auction house play the percentage game, from every 100 domain submitted their are 7 ignorant owner who do not know the value of their domain, which translate to sure sale and commission and this is what they after. no one care about you only if your domain sell?? as a matter of fact some websites will let you decide the price but if the domain does not sell in 30 days you pay the 1% of the price you asked (4.cn) in the hot sale

      In reply to Elliot Silver | November 25th, 2015 at 10:51 pm

    Recons.com

    I agree that if you’ve set up BIN on liquid asset and just forgot about them without monitoring market, you’ll lose money.

    The strategy would be putting bin above quick sale and keeping track of things, as well as having lower bin only on few, not all of your assets across the same class. So, If I’ll decide to post my LLLL.coms on auctions, I’ll make sure they are across different price bands and my loss would be minimized if quick trend up started.

    BIN can be useful tool. I had my auction closed at BIN double of what bidding was reaching.

    November 25th, 2015 at 12:02 pm

    Ron

    Many BIN pricing losers do not honor their sales. Just had a recent issue with Godaddy regarding this, their entire user interface is dangerous, as many listed BINs are no longer owned by the actual listing account anymore.

    BIN is great if you are busy doing other things, but if you have some time to dedicate to domaining, then keep your shorts up, and your BINS offline.

    Ask Berkens

    November 25th, 2015 at 12:19 pm

      Anon

      I’ve had the same problem recently on undervalued BIN .club domain names at GoDaddy, SEDO, and Afternic. Seller and/or marketplace reneged on the BIN. F*ckers.

      In reply to Ron | November 25th, 2015 at 3:27 pm

    Nick

    I always use BIN pricing. And when I saw 4 Letter .coms going up, I raised all my BIN on them. It’s now like these prices snuck up on anyone. Any investor should keep track of pricing. While I can’t remember all my 4 Letter .coms for the life of me, I know when to login and raise prices.

    November 25th, 2015 at 12:54 pm

    BullS

    As a proud owner of 50+ 4L domains bought dirt cheap 4 yrs ago, I quickly removed all my domains at sedo/afternic.

    After one week, then I put back those domains with OFFERS.

    This is to start fresh.

    I prefer vodoo or DNS so I can see who the buyers are.

    Too many bogus low ballers at sedo/afternic.

    No more BIN as domains are rising in values.

    November 25th, 2015 at 1:24 pm

    Matt

    I committed to purchase several domains recently at BIN prices on both the GoDaddy and Flippa marketplaces, not one resulted in a sale. If you’re prepared to set a BIN, honor it.

    November 25th, 2015 at 1:55 pm

    Anonymous

    I had set a number of LLLL ,com at BIN a couple years ago on Sedo and Afternic. In a period of one week I sold 10 at old prices. OK. I’m happy. I still made 10 to 20 (or more) times what I paid. I also received orders on a couple domains I did not own anymore. Sedo and Afternic were cooperative.

    I also sold a couple NNNNN ,com at great prices a year ago but was below today’s market. I was happy. I had a nice influx of cash.

    However, I deleted all of my domains from Sedo and Afternic database 3 weeks ago. It will give me a chance to clean up my listings. I will list some back on Sedo next week but at tomorrow’s market price.

    Thank you China for the business. :)

    November 26th, 2015 at 11:43 am

      Anonymous

      What is noticeable is the decrease in interest for my one and two word .coms over the past couple months. I contribute it to all of the new gtlds. I hope that is short term.

      In reply to Anonymous | November 26th, 2015 at 11:49 am

    Mathew

    Elliot keep up the great work, it’s great to hear your opinions…

    November 27th, 2015 at 6:30 am

    Davinderpal S Bhatia

    Even an agreement on buying/selling due to BIN does not guarantee domain sale. I have seen people accepting a BIN thereby getting into a legally binding agreement to buy. And then not paying for Domain.

    Or not selling a domain for which they had set a BIN which was accepted by buyer.

    Until the Domain Brokers/Brokerages take the steps to go after those who do not honor legally binding agreements (instead of just disclosing their contact info) BIN will not help in many cases.

    November 27th, 2015 at 8:18 am

      Elliot Silver

      “Until the Domain Brokers/Brokerages take the steps to go after those who do not honor legally binding agreements (instead of just disclosing their contact info) BIN will not help in many cases.”

      That is not feasible. The cost of litigation would likely be exponentially higher than the commission. Marketplaces would have to raise rates considerably to cover that possibility if they were responsible.

      If the cost of enforcing a deal through the courts would be more reasonable, the party that was harmed would do it themselves and not try to rely on the marketplace.

      In reply to Davinderpal S Bhatia | November 27th, 2015 at 9:28 am

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