Domain Names Provide Better Value | DomainInvesting.com
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Domain Names Provide Better Value

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If a local business is interested in buying one of your domain names, and you are trying to hash out a price for the domain name, here’s something you can use to make your case to the potential buyer and show them just how much value a domain name has compared to other means of advertising / marketing.

A lighted pole sign that many businesses use to attract the traffic that drives by their business can cost upwards of $5,000 or more, and that’s for an ugly, static sign. Of course, this sign can only be used to give a small amount of information about the company, can’t really be drastically changed, and it doesn’t say much about the company. It also can only be seen by a limited number of local people who drive directly past it, slow enough and close enough to read it.

On the other hand, a generic domain name can be the foundation for a beautiful website that can describe a business, offer special discounts, sell products, and can attract a targeted, worldwide audience. The domain name can be seen by millions of people, costs very little to maintain, and it can be used in many different ways.

Finally, when a company has a sign made and installed, the actual resale value of the sign is probably around zero. In fact, it would cost the owner money to remove and/or replace it. On the other hand, a used generic domain name will increase in value with age and usage, and it can be easily sold or converted into cash.


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 (13)

    Deke

    Love it. Brilliant angle.

    Very well thought out.

    October 27th, 2010 at 2:51 pm

    Grant

    But what about the age old saying…

    A business without a sign, is a sign of no business.

    ?

    October 27th, 2010 at 3:14 pm

    Leonard Britt

    From personal experience, a sign can cost quite a bit more than $5000 and due to requirements of the landlord or city ordinances, may have significant limitations in its design, size and wording.

    October 27th, 2010 at 4:15 pm

    AB

    Ahh yes…but why can’t I register superlongtaildomainname.com instead?

    (on the very rare occasion I get a reply, this is what I usually get)

    October 27th, 2010 at 4:58 pm

    Cedrick

    Great article! I have been looking into leasing some of my domains to local businesses or developing them into lead generators/directories for local businesses. Today I registered PaintersInDallasFortWorth.com.

    October 27th, 2010 at 6:45 pm

    Rob

    Great points Elliot… the most important one, in my opinion, being the one about reaching potential customers outside of the signs local reach!

    On a somewhat similar note, I just read an article on how Mobile users prefer Web Browsers over Apps… this simply means that Domain Names are very Alive and Well in the new Mobile Age since people prefer to “surf the web” on their mobile devices just as they do on their desktop or laptop computers over using apps to navigate to different sites/content

    Article Link: http://www.emarketer.com/Article.aspx?R=1008010

    – Rob

    October 27th, 2010 at 7:45 pm

    Olney

    This maybe a bit too broad of a comparison. Looking at who would need a sign post. Sneaker shop in Newton, restaurant in Weymouth, bar in Franklin.

    I’m all for domain investment but the reality is many small local business’ also may just have $5,000 profit enough to do something for branding. $5,000 for a local sign may just use that budget. $5,000 for a domain doesn’t stop there.

    A better comparison may be a $5,000 domain purchase for a company that spends $1,000 to $5,000 a month in online advertising. Even as a second campaign site it could cut down online advertising costs if the domain contains the service keywords.

    October 27th, 2010 at 9:34 pm

    BFitz

    End user who buys and uses domains here. You are spot on. My first cityrestaurants.com was $1200 and the sign for the restaurant we built was $20,000. Today that sign is a ongoing cost with electricity, bulb replacement, fuses, etc. The domain is a beacon to people visiting this highly traveled business corridor outside Chicago that costs $8 a year. That is the good news. The reality is that we could not survive without the sign and the domain was/is a luxury and not a must buy. So, be careful in your approach. What works for Rick and Frank selling to CNN, etc. won’t work with the painter or bakery down the block. Price accordingly and understand you are holding someone’s hand who does not “get it.” I wrung my hands over that first domain, way more than the sign contract, and I was actually embarrassed afterwards that I had just wasted a grand.

    Price it fair and to move. There are few that get it which means there are few buyers. Your potential buyer is not every matching business in town, it is every matching business that: 1. Gets it. 2. Has the budget or approval and 3. Has the vision and ability to do something with the domain. The list just got way shorter.

    Few will replace an existing site because of all the additional costs like business cards, sides of trucks, existing ads, etc.
    Catching a business before it launches is near impossible.
    Good luck!

    October 27th, 2010 at 10:21 pm

    projector lamp

    Good points BFitz.

    It still amazes me how a local business owner will search for the right generic local domain name, take the time to make an offer, and then refuse to pay an extra $100-$250 to seal the deal.

    I have a set of hand registered domains that are priced right in the $250 – $300 range. I’ve received multiple $100 offers for a domain, but only a few SBO’s will move up to 250-300. I’d rather just sit on these types of domains as they will only appreciate rather than sell for a $100. And is it just me or are all opening domain offers $100?

    Great ideas on additional thoughts to move the SBO to a sale Elliot.

    October 27th, 2010 at 10:46 pm

    BFitz

    @ projector lamp
    When to sell is obviously your call. I went through that with a citysuhi.com I owned. I folded at $100. I do believe we are a decade away from the business decision makers “getting it.” So I bake that carry cost in, you never go broke taking a profit.

    October 27th, 2010 at 11:53 pm

    Christopher "Domian Transfer" Hofman

    Great article,Christopher !

    I would like to add that the new .co domain is a great alternative to .com.

    1. Only 500.000 registered until now since the launch in June. 176m .com to compare.

    2. Google has approved .co as a domain for international use, meaning that their search engine sees .co websites as interesting both for their local and global search engine.

    October 28th, 2010 at 5:12 am

    Joey Starkey

    Great Post. Ever so slowly business owners are starting to get it. But I will hold onto a good Geo name till I get the price that I want.

    Because once it is gone it is gone forever.

    Joey Starkey
    Memphis Domain Broker

    October 29th, 2010 at 10:54 am

    Domainer

    Great post, but I would add that a domain is oh so much more than a lighted sign post. What you said is correct, but you left out the most important aspect…

    It is also the 24/7/365 doorway to your electronic business which operates on a world-wide basis. It accepts payments with no employees. It allows you to conduct business on holidays and in far away lands — all with out inventory, a cash register or a phone system.

    Good luck getting your rusty ol’ sign to do that.

    October 31st, 2010 at 12:04 pm

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