Some Sales May Not Seem to Make Sense to Me, But They Make Sense to The Buyer
I frequently see domain sales reports that don’t make a whole lot of sense to me at face value. The sales prices may seem off the charts compared to names I believe are similar. Does this mean that a sales venue or seller has fraudulently reported it or that there was something else nefarious that caused a sale to happen? In most cases, that is unlikely (especially because Ron does his best to verify sales). It’s more likely that the people analyzing the sales – like myself – just don’t have enough information about the sale in order to form an educated opinion on it.
As I have mentioned in the past, you sometimes need to overpay to get the domain name(s) you want or need for a project. Sellers frequently need to be convinced to sell their domain names, and it can take a significant offer to make it happen. With a proven business model or a strong business plan, these domain acquisitions may make sense to the buyer, although they leave others shaking their heads.
Likewise, a domain name may have certain attributes (like type-in traffic) that results in significant revenue opportunities. When this is the case, a buyer may have a plan to monetize the traffic much better than the seller, and he can therefore pay more for the domain name than others would value it at. A sales price may seem high, but in reality, the price is favorable to the buyer.
Aside from questioning the validity of specific sales, another thing that some people do is transpose their perceived rationale for a domain sale onto the value of their own domain names. “XYZ.com sold for $100,000, so my domain name, e-XYZ.net must be worth $10,000,” some people exclaim. This is usually not the case since domain names are unique.
While abnormal domain sales take place all the time, uninformed domain investors shouldn’t question the validity of the sales without any type of evidence (other than their own perception), especially in a public forum. Further, domain investors shouldn’t presume their domain names are worth the same amount since all domain names are unique assets.
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