Sale Price Doesn't Necessarily Show "Real" Value | DomainInvesting.com
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Sale Price Doesn’t Necessarily Show “Real” Value

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I recently won an auction on NameJet, and within a couple of days of changing the nameservers, I had a serious buyer approach me to buy the domain name. After a brief discussion, I shared what I paid for the domain name because it was easy enough to find. To paraphrase his response, it was something like, “Oh man, I would have paid more!”

There have been plenty of times that I have been in the same position as this person. I read about domain names that sold privately or at auction, and I think about how that domain name sold for less than I would have paid had I been involved. This is flawed thinking.

Although the sale price of a domain name is indicative of what the seller was willing to sell it for or what the auction participants were willing to pay, it is not necessarily the “real” value of the domain name.

In the case of the domain name I won at auction, I explained that had the person who inquired been an auction participant, the sale price would have been significantly higher. Although I emerged as the winning bidder, I value the domain name significantly higher than my winning bid, and I would have paid much more had I needed to do so to secure the domain name. I also explained that there probably would have been other participants involved in the auction who would have pushed the price even higher.

Just because you see a sale price at a certain number, it does not mean that is the value of the domain name.

The next time someone tries to negotiate with you based on your purchase price, you should remember this and use it in your defense of your asking price. The sale price of a domain name does not always indicate the real value of that domain name.


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 (9)

    Ron

    Tell this to buyers who see an auction drop date of 2014, on a solid name and tell you that you just registered in for $10.

    There are tens of thousands of dollars made everyday on thousands invested.

    Knowledge, and opportunity cost, and having capital to invest at the right time are all critical factors.

    We have all sat on names for a decade saying no no no to low offers, hoping for that one. Domainers need to ask more for quality names, don’t be afraid, it is expensive to replace inventory these days.

    September 24th, 2015 at 10:33 am

    Leonard Britt

    I am of the opinion that we are still years away from mass acceptance of domain names which are short, memorable and/or descriptive as valuable brands worth paying serious money for the purpose of promoting products and services.

    As an accounting/finance professional I see how much companies spend on IT costs, professional services, advertising/marketing and travel. And yet they are generally reluctant to view a domain name as worth spending serious money on. Domain names are often given little serious consideration and the result is companies branding on domains which fail to capture mindshare of prospective customers.

    September 24th, 2015 at 10:39 am

      Ron

      We are at the forefront single word 2 3 4 l/n are liquid gold right now in .com.

      Take it to the bank type of money.

      In reply to Leonard Britt | September 24th, 2015 at 11:29 am

    JZ

    A domain costs $10… I’ll give you $15. that is more than fair!!

    Anytime a domain investor buys a domain it should be worth more than they paid. If not, it might be a poor investment.

    September 24th, 2015 at 10:48 am

      Elliot Silver

      Should be, but sometimes not. I am sure I have overpaid for domain names many times.

      In reply to JZ | September 24th, 2015 at 10:50 am

      Logan

      Thus JZ’s point: your overpayment led to a poor investment. JZ’s advocating value investing in domain names at all times.

      In reply to Elliot Silver | September 24th, 2015 at 5:18 pm

      Elliot Silver

      Maybe, but just because I haven’t sold a domain name for more than I paid, it doesn’t mean that it won’t happen. I am sitting on well into the 6 figures of unsold inventory, but that doesn’t mean that they are poor investments. It means I haven’t been enticed to sell them yet.

      In reply to Logan | September 24th, 2015 at 5:22 pm

    ada

    If sales price showed real value we would have to sell later our hand registered domains for 9usd or so.

    September 24th, 2015 at 1:01 pm

    Omar

    Yeah I agree.

    People will always try to talk you down when they want a domain name no matter what. I had a similar situation where I bought a domain name at a NJ pre release and had someone contact me within 5 days that was interested in buying.

    There offer was VERY low but I was able to say MY PRICE and they came up to meet me not to my exact price point but it was fair enough.

    -Omar

    September 24th, 2015 at 9:58 pm

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