Domain Sales: Comparing Aftermarket Websites to Domain Forums | DomainInvesting.com

Domain Sales: Comparing Aftermarket Websites to Domain Forums

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Yesterday afternoon, someone posted a question in the Sedo weekly sales article, and it’s something I’ve been asked quite a bit so I want to give the question and my reply more exposure in its own post.

The summary of the question was this: Why do domain names sell for so much on Sedo or Afternic when they wouldn’t even sell at a fraction of these prices on domain forums?

To answer the question, I used physical real estate as an example:

“There’s a big difference between when someone specifically wants to buy one name in particular on Sedo for a project vs. when someone wants to sell a domain name to other domain buyers.

Picture it this way.

Say you live in a penthouse apartment in New York City and you’ve given the listing to a broker in the event he/she finds the perfect buyer. You don’t necessarily need to sell it, but if someone comes looking for a $20 million apartment, you’d consider selling it. That’s what it’s like when a company wants/needs a name and goes after it on Sedo.

Now imagine you own a piece of real estate and you need to sell it ASAP. Instead of trying to connect with a real estate agent who has buyers or listing it for sale, you decide you want to call the number on billboards you see across town announcing that they will pay immediate cash for homes. That’s sort of what it’s like to sell on a domain forum.

Most domain investors won’t pay full retail price for a domain name, and most who would, don’t spend much time on forums.”

I would be interested in knowing your thoughts on the question, especially if they are different than mine. I am traveling today, so comments that aren’t automatically posted may take additional time to be approved.


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 (7)

    Larry

    “Most domain investors won’t pay full retail price for a domain name, and most who would, don’t spend much time on forums”

    Consequently if you have the time to read the forums you can pickup bargains. Similar to things you buy off of craigslist vs. ebay. On craigslist there are some good deals to be had simply because things are posted at a point in time in a narrow geographic area with not much interest (other than if you are selling some things like Mac computers etc.)

    December 14th, 2011 at 2:27 pm

    Jeroen

    Shane just gave a brilliant example of a real life case today: http://domainshane.com/imma-let-you-finish-but-fuller-moehagen-has-a-great-story-about-selling-his-domain-to-kanye-west/

    That domain may not have sold on any domain forum.

    December 14th, 2011 at 2:54 pm

    Jp

    Um, wholesale vs retail.

    December 14th, 2011 at 6:37 pm

    Mike H

    Money, Time, Skill.

    You need those three attributes to monetize a domain name. In general that’s true whether you monetize through development, reselling, or some other ingenious means.

    How well a person can monetize a domain determines (in most cases) how much they are willing to pay for it.

    So, why doesn’t everybody just sell to endusers? Money, skill, time… it still needs to be there (a great domain doesn’t hurt either). I sell many names on forums because I don’t have the money, time, or skill to develop every name I come across and paying excess renewal fees hurt the bottom line.

    In conclusion, two different markets exist because people are willing to spend more if they have the time, skill and money to put into that particular name and at the same time looking at a different domain, some people are willing to sell names cheap because they lack money, time and/or skill when it comes to that particular domain.

    Your best bet (@original question asker) is to build a portfolio that you can manage money, skill, and time wise. It’s pretty tough to make the big sale when you are floundering in renewal fees covering a hodge-podge of random domains.

    I guess that’s it for my ramble

    December 14th, 2011 at 9:05 pm

    Joe

    Sedo is a marketplace attended by both domainers and endusers, so even when the names are bought by investors, the price will be generally (much) higher than the forums.

    I see it like wholesale and retail stores: if you’re not an enduser but sell goods to them, you buy the goods at the wholesale market, since if you buy them at retail stores, you may get a small discount because you’re a regular buyer, but it’s always a higher price.

    December 15th, 2011 at 5:48 am

    NoobWorld

    Imho, end-users enjoy overpaying for dirt. That about sums it up the domain price/selling factor between the platforms. You can sell high to the right buyer. Never convey to the buyer there is an immediate need to sell.

    Selling on forums is like going to a Pawn Shop. Would you rather sell your gold cheap or get market value?

    We see competitive domain marketplaces with great deals. However, end-users lack the common sense to know the difference between good and bad deals. In result, a domainer takes advantage of their need factor to sell overprice domains.

    December 15th, 2011 at 8:27 am

    Meyer

    Comparing forums sales to the organized marketplace sales platform like Sedo and Afternic is an unrealistic comparison.

    Forum sales are down 98% compared to 5-8 yrs ago. Years ago, forums were one of a few places domains could be sold. Most of the major domainers frequently bought and sold domains on the forums. (for example – Day, Berkins, Schwartz, Ham, Fischer, xedoc, BuyDomains, Dichter, etc., etc.)

    Now, the major buyers very rarely visit the forums.

    Today, very few premium domains are offered on the forums because the buyers who were willing to pay the wholesale value and could afford to buy them are not there.
    Therefore, why offer a premium domain on the forums and have to justify a $ xx,xxx price. And, have to be bothered by $ 200. offers.

    The domain flippers are still active buyers on the forums. They will buy a domain for $ xxx. and then list the domain on Sedo/Afternic for $ 10K. And, sell it through Toby Clements and MediaOptions daily sales letter for $ 5K.

    Bottomline, there are not enough ‘eyes’ on the forums.

    Yesterday, Elizabeth Taylor jewelry sold for $ 135. million (over 2 days). How much do you think the estate would have received if they offered it to a jewelry store, pawn shop or on ebay?

    I tried to avoid saying ‘apples and oranges’.

    December 15th, 2011 at 3:30 pm

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