Mike Mann Shares Results of A/B Price Testing | DomainInvesting.com

Mike Mann Shares Results of A/B Price Testing

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DomainMarket.comYou’ve probably seen Buy Domains price its domain names to end with the numbers 88. Whether the domain name is $4,088 or $40,088, almost all of Buy Domains’ priced domain names have an 88 at the end. That was most likely the result of Mike Mann’s testing from when he owned the company.

Yesterday on Facebook, Mike shared some interesting results from A/B price testing on domain names listed for sale at Domain Market. With his permission, I have shared the information with you here:

Price Point # Sold Revenue Generated

  • $250 31 $7,750
  • $300 29 $8,700
  • $400 17 $6,800
  • $450 10 $4,500
  • $600 17 $10,200
  • $2050 3 $6,150

What this indicates to me is that the $600 price point generated the most revenue for the company, despite not being the level with the greatest number of sales. Obviously fewer sales are required with a higher price point compared to the lower price. Testing like this can help Mann’s company determine the optimal price point for his non-premium domain assets that sell every day.

One interesting thing to me is that there weren’t any tests for pricing between $600 – $2,050. Mike has that covered as he intends to do an A/B test between the $600-700 price range. Should the results be similar, he can continue to increase prices until the revenue number drops off.

Having a large portfolio allows Mike to do testing, and his knowledge sharing can help all of us. We should keep in mind that every domain name asset is unique and the potential sale price could be greater if it was priced after an inquiry rather than listed with a buy it now price, depending on the buyer.

It is interesting that Mike abandoned the 88 pricing and hasn’t adjusted to the popular 99 pricing either. I asked him, and he said, “I dont do 88 pricing because that was my TM for BuyDomains.com, dont want to copy we have tried other test prices but picked that array randomly and now have focus for more tests go for it.”

I wouldn’t be surprised to see continued testing, and hopefully Mike will share his results. If he doesn’t, I am sure it won’t be too difficult to find considering his company owns hundreds of thousands of domain names.


About The Author: Elliot Silver is an Internet entrepreneur, and he is the publisher of DomainInvesting.com, a website that shares domain investing news, insight, and strategy. 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 (25)

    Jay

    Would be very interested in seeing the actual type of names they are selling at those prices.

    December 20th, 2012 at 11:42 am

      Elliot Silver

      I agree… Mike often reports his sales on Facebook and Twitter, but those are generally for higher value sales.

      December 20th, 2012 at 12:10 pm

    Meyer

    How many were sold at “buy it now”?

    I believe Michael has a selling staff so the negotiation process would effect the final selling price.
    (“Our bottom price is $688 but if you buy it today, we will sell it for $600.”)

    The other factor is the quality of the domain (and possibly the acquisation cost).

    How many were sold at a higher pricepoint, if any?

    Were all of the sales direct or some thru afternic and sedo?

    I have the highest respect for Michael and his business stategy. So, thanks for the small snapshot.

    December 20th, 2012 at 12:32 pm

    December 20th, 2012 at 1:43 pm

    Mike Mann

    the 2050 was just an outlyer to see if people would take it, the names arent worth that much but are worth the $600, and used to be $350, hopefully $600 will stick, maybe 588, 599 or hopefully $700, will test all carefully and let you know

    December 20th, 2012 at 1:43 pm

    Mike Mann

    all those are buy now, none of those get any discount

    December 20th, 2012 at 1:44 pm

      Elliot Silver

      Do you have them listed on other platforms – like Sedo and Afternic?

      December 20th, 2012 at 1:44 pm

    Mike Mann

    they sell on godaddy, sedo and afternic/buydomains too

    December 20th, 2012 at 2:06 pm

      Ron

      What about the spam your so called broker agents send, I got 3 spam emails trying to hawk a domain from 3 different names in a matter of 30 mins? Maybe not a good idea…

      December 20th, 2012 at 3:55 pm

    Tim Davids

    Thanks for sharing valuable info like this Mike and Elliot.

    December 20th, 2012 at 2:27 pm

    todd

    To many variables for this to be relevant. The only way a test like this can make sense is if every name was exactly the same. A name that I would buy for $300 you may pay $500 for it and someone else maybe won’t pay 50 bucks for it. He sold 107 domains and each one is totally different because it is unique to itself. He didn’t sell 107 red bowls that are all the same because than that would be a real test of pricing. Without knowing the names it is still a guessing game of what someone is willing to pay for your domain.

    December 20th, 2012 at 4:38 pm

      Elliot Silver

      My assumption is Mike has a large percentage of his portfolio that aren’t worth much to his company and he’s happy to churn those names. These have varying prices from $250+. When he did this analysis, the $600 price point drove the most revenue.

      December 20th, 2012 at 4:40 pm

    Leonard Britt

    Thanks for sharing. Yes, I have had domains sell at Godaddy Premium Listings which were priced lower at SEDO. On the other hand I have had domains sell at Godaddy auctions which were priced higher at SEDO and the SEDO offer page had one or more offer page views.

    December 20th, 2012 at 9:12 pm

    Yo Mona

    At least Mr. Mann is more realistic about the value of domains than some people (not naming names here but the guilty know who they are).

    But the market will decide either way.

    For those that price their domain names way out of there…what gives? Obviously, you’re not going to get any biters.

    Prove me wrong.

    December 21st, 2012 at 1:44 am

      Elliot Silver

      I price my names according to market conditions, my personal valuation, and how my business is doing. When I feel like I need liquidity, my prices may go lower.

      That said, Mike has hundreds of thousands of names, and the majority are mediocre hand registrations. If he can sell names for $600 when they have a lifetime cost of $25, it can be very profitable, even though he maintains significant inventory.

      I, on the other hand, don’t have nearly as many names, and all of my better names are aftermarket acquisitions, so my acquisition costs are higher per domain name.

      December 21st, 2012 at 9:19 am

      Larry

      “when they have a lifetime cost of $25″

      Where does the $25 figure come from?

      December 21st, 2012 at 11:53 am

      Elliot Silver

      Was figuring 3 years @ $8/year average. That’s probably low since turnover is likely low.

      December 21st, 2012 at 12:09 pm

    Mike

    I’m curious how this split test was conducted. From the way it sounds, it was simply taking a collection of names similarly valued (to Mike) and pricing each at a different price point. If so, I don’t see how that is split testing.

    I think the right way to do it would be to have a variable in the code for the pricing field, so that it shows a different price for the same domain to every visitor/IP address. So visitor 1 lands on domainabc.tld and sees a buy it now price of $350. Visitor 2 lands on the same domain and sees a price of $450. Etc. It’s not clear if this was the way the testing was done, but it would be great if Mike could clarify.

    Either way, still appreciate him sharing this info. Thanks Mike, and Elliot.

    December 21st, 2012 at 11:44 am

    Mike Mann

    these are all names that had been in the same basket, historically $350, a large batch of them, totally valid test, so far proving $600 is a sweet spot but still testing more, its a sexy looking price point

    December 21st, 2012 at 12:14 pm

    Dee

    Pretty cool of ya’ll to share info. Thanks so much Mike & Elliot!

    Merry Christmas Everyone!

    December 21st, 2012 at 12:40 pm

    todd

    here is a good article on pricing strategy

    http://blog.kissmetrics.com/5-psychological-studies/

    December 21st, 2012 at 12:51 pm

    Joseph Peterson

    Thanks to Mike Mann for sharing data. Nevertheless, I’m not sure how to interpret those numbers. Can I ask for some clarification?

    Were these prices randomly assigned? In other words, not by a human picking some domains to be $250 and selecting others to be $600 — but the domain price groups selected as in a raffle.

    How many unsold domains are there at each of those price points? There’s a world of difference between 31 sales at $250 if there are only 31 domains priced at $250 … and 31 sales at $250 if there are 100,000 domains priced at $250. Percentage sales at the various price points are likely to be quite different, making this a comparison between apples and oranges — unless further information is taken into account.

    Also, did a particular domain remain at one price; or did domains switch after awhile from, say, $250 to $600 or from $600 to $250? If price changes did occur, it would be relevant to know which sales occurred after a decrease and which after an increase.

    The time period of each domain being offered at a particular price is also important to know.

    I’m glad Mr. Mann is sharing this data. However, it just whets my appetite for a really thorough study with solid experimental controls. He has the inventory to really push that kind of analysis forward, but I can’t tell if anything like that has yet been undertaken.

    December 21st, 2012 at 4:46 pm

    Mike Mann

    this was a scientifically valid A/B test, same batch of names equally distributed and tested

    December 21st, 2012 at 10:22 pm

    Mike Mann

    all the names are same quality, just randomized pricing, same number in each silo for same period

    December 21st, 2012 at 10:23 pm

    Joseph Peterson

    That’s a very interesting study. I wonder if anything equivalent has ever been done before. Certainly, the major marketplaces such as Sedo could not replicate this, since they can’t manipulate the prices of domains owned by third parties.

    Impressive.

    December 21st, 2012 at 10:28 pm

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