Ed from Michigan asked me to discuss how to sell a domain name, and I am happy to give some pointers. There are many factors to consider once the decision to sell has been made, and each factor can have many implications.
The first thing I do is evaluate the domain name based on its natural traffic, revenue, estimated number of searches (Overture or Wordtracker), number of Google listings for the “bracketed term,” number of advertisers for the term, and comparisons of recent sales of similar names from DNSalePrice.com and DNJournal.com. Using all of this information, I determine my ideal sales price.
With my price in mind, I decide whether I should target an “end user” or a domain investor. End user sales can be more lucrative, but they can also be very time consuming. Conversely, selling a domain name to a domain investor will almost certainly yield a lower sales price, but the sale may be completed more quickly because there are less hurdles to leap to close the sale.
In order to sell the name to an end user, it is important that the name be a one word .com or “category killer” name to avoid wasting anyone’s time. For example, I wouldn’t try an sell a name like AwesomeDevices.com to Advanced Micro Devices, however, I would consider selling Devices.com to them if I was interested in selling it (which I am not).
If I decide to sell the name to an end user, I first compile a list of potential buyers. The next step is to hone in the decision maker for each end user company. More often than not, an email to the Whois contact will not yield a response. Keep in mind that while I may think this particular domain name would suit them well, they may not feel the same, and they may not respond regardless of their thoughts. I would also target each company’s advertising agency in an attempt to close the sale. If all of this fails, I would try to contact a broker or possibly another domain investor.
It is very important that the domain name be generic when contacting end users. An attempt to sell a domain name can possibly be considered bad faith if it isn’t 100% generic. If you are unsure, consult an attorney.
In order to sell a domain name to another domain investor, the domain name must have a clear meaning, and it should have some inherent traffic. Unless the domain investor intends to develop the name, he will usually want to know the traffic and revenue generated by the name. Although I have never sold a domain name based on revenue, I believe it’s important to be honest about these figures. If you are dishonest once, it could cost your reputation, something that is most important in a small industry like this.
Naturally, the next question is about finding other domain investors who might be interested in buying your names. My best piece of advice is to use various outlets such as the domain forums or even Ebay to make contacts within the industry. You can list your names there, and when someone buys a name from you, there is always the opportunity to upsell other names of interest. Another option is to contact a domain broker who may have more connections within the industry. Typically, brokers charge anywhere from 5% – 15% of the total sale, and can be an invaluable resource. If you are looking for a broker, drop me a line and I will put you in touch with a couple people I know.
If you are honest with yourself and set a reasonable price, the sales process is much easier. You generally shouldn’t expect to sell a newly registered name for thousands of dollars, as it just isn’t likely to happen. People with thousands of dollars to spend on a domain name typically do enough due diligence to know you just paid $8. Selling domain names is much harder than buying domain names. I think people should do their due dilligence, research the market, and specialize in a niche before spending recklessly.
Thanks, Elliott………
lots to think about,
more to implement.
I would be interested in a broker or 2 that you would recommend.
thanks Ed – Michigan
Hi Elliot,
Just found your blog a few days ago and enjoying the really useful content. Like Ed I’d appreciate the details of a few brokers should I decide to sell. Thanks in advance and keep up the good work!
I figured I’d comment to this blog posting.
I too believe in valuing a name based on
number of advertisers bidding on a term. I
too stand fast in my belief that hand regges
can yield high ROI.
I’ve done my fair share of research and I tell
you, domain icons such as Frank Schilling (Name Admin)
and Rich Schwartz are still buying available .coms.
Research various markets and you’ll find end users.
Thanks Elliot,
That’s excellent information and much appreciated. It would be great to see this fleshed out with a real domain name and real numbers. For instance, say a domain is getting 50 type-ins a month to a parked page, perhaps paying for it’s annual reg and a bit more. Say it’s “Google Search” scores close to a million and there are 3 ads. Checking the ad prices you discover that the keywords are going cheap–a few cents a click. Would that be enough information for you to offer up a ballpark selling price?
Thanks,
WW
***UPDATED BY ELLIOT***
This is a good idea. Later this afternoon I will take one of my names as an example and price it out.
Very nice post Elliott! I like the idea of evaluating a domain name based on the natural search traffic that it receives but will you get an accurate estimate of this figure?
***Updated by Elliot***
Traffic is one of many considerations. To me when I am selling, it is a smaller detail.
Elliot,
Awesome post! Can you take the analysis a little further than suggested by WW, and gives us an idea of the actual parameters of a great domain? What is considered “good” traffic? How many type-ins a month, what percentage CTR etc… Also what kind of numbers are considered good on wordtracker, or google on “bracketed term”?
Thanks, kelly
Will brokers bother working with people selling 2nd or 3rd tier domains (2-3 word .coms with 50-100 visitors per month)?
I also have some 2 word .eu domains I’d like to get rid of…
***UPDATED BY ELLIOT***
It’s difficult to say because the less profit margin potential and more work there is, the less likely it is for someone to make the necessary effort.
Thanks, Elliot. Where/How would you recommend selling the type of domains I own? I’d love to see a blog post about this and I imagine other people would as well!
Thanks,
cdc
Hi
I am going to sell part of my portfolio of European domains and would like your opinion on the method of disposal.
It seems to me to be a good time to offer these domains for sale as the European markets offer good first come development opportunities (insurance price comparison tool on partnership based program websites) and the Euro returns are set to offer good exchange rates for some time.
My strategy in 1999 was to register a number of generic domains in clusters specifically targeting the Italian insurance industry, leave them dormant and wait for broadband services to be accessible
The registrations include (Italian) insurance, car insurance, motorcycle insurance, house & life … with other generic auto registrations to offer SEO support
The registrations have real intrinsic value with good cpc returns according to Google ?
If I put this portfolio into an auction the potential strength of the group (if not the value) will be lost. This type of portfolio’s group asset should be used by professionals who can sweat the asset, and I am not aware of any UK or Italian based domain professionals other than marketing companies wearing the emperors new clothes.
Would you place the domains at auction, use a broker and if the latter who would you approach ?
Hi Elliot,
I have just listed my first domain name for sale. What should I do to let people know that it is for sale?
Here is a copy of the auction:
url=http://www.sitepoint.com/marketplace/auction/21453]
[img]http://www.sitepoint.com/marketplace/auctionimage/21453[/img]
[/url]
Thanks for your help,
Ros
I would like your brokers, thanks.
ps. how close has the auto appraisals (valuate/estibot) been to your actual sale prices???
Hi Elliot
Nice post. i like you thinking and ideas .
got lots of thing to learn today.
Thank you 🙂