Search | View Active Threads | View New Posts
Current Time: 02:11 AM

 

+ Reply to Thread
Page 1 of 3
1 2 3 LastLast
Results 1 to 15 of 44
  1. #1
    Join Date
    Sep 2002
    Location
    Wales (UK)
    Posts
    24,745

    End user sales reality check

    I think a lot of newer entrants to the domain industry have a very unrealistic expectation with regards to end user sales.

    The pattern seems to be requesting appraisals based on the best possible scenario with regards to the buyer for a domain but then just listing the domain on some domainer to domainer venue (forum, sedo, ebay, a domain auction etc) and then sitting back and expecting to get a big payoff because they've seen other (perhaps superficially similar) names sell to end users.

    The reality is that when it comes to domains of "commercially usable" quality in .com, the odds of getting passive end user interest are actually very low - single digit percentage low.

    Take a look at the Afternic DSL figures as per DNJ this week. They list about 450 sales this week, that is from a pool of over 2 million domains listed there as per the afternic site. Taking thew 2m figure, that gives a total percentage of just 0.0225% sold per week or 1.17% per annum. Of the total 2m, I'd think a few hundred thousand were actually genuinely commercially viable .com's which would make the percentage sold just over 10% - and Afternic do promote the domains more actively than just listing and waiting for end users to beat a path to the afternic site.

    These are the kind of odds for usable domains, domains that on average have a reasonable amount of usage by a reasonable number of commercial entities in a commercial labeling capacity - the kind of names companies are likely to come up with in their their top 5 shortlist of preferred domains for their offerings (descriptive and brand)

    This should illustrate why there is a big void between end user pricing in this scenario and what the domain is likely to get in a domainer to domainer environment as they have to factor in the margin required to make it worthwhile in addition to the probability of getting that end user interest.

    The odds increase the greater the effort put into marketing and promoting the domains to potential suitors, but deviating below this level of quality obviously lowers the odds. For other tld's, it generally requires a term of much higher quality (in terms of who, how and how much) to maintain the same odds, for "creative" terms with little usage the odds plummet.

    To get an end user sale there are several hurdles:

    1) how many people use the term in a commercial capacity such that it would be one of their most preferred choices

    2) how many of those would be willing to pay much of a premium for any domain - even their number one choice.

    3) how many of those would pay the premium for this specific term variant in this specific tld.

    4) how many of those are in the market right now for a new domain or domain "upgrade" and are aware of the domain being for sale or could be tempted to buy if made aware

    The longer the timeframe, the better the odds for the above - generally speaking unless usage of the terms are on the decline.

    There are some anomalies in the market where domainers (rathen than end users) are the core demand due to tokenisation and group speculation - 3 (and to a degree 4) letter .coms and .mobi come to mind.

    Added: the odds of end user interest are also likely to be lower if the domain has never been registered before. If nobody wanted a domain at registration fee it is unlikely there will suddenly be demand for it just because someone registered it and hiked the price up unless it targets some kind of emerging market.
    Last edited by safesys; 2007-12-14 at 06:35 AM.

  2. #2
    Join Date
    Oct 2007
    Posts
    1,750
    Thanks safesys - that's very helpful.

  3. #3
    Join Date
    Jul 2003
    Posts
    1,733
    The best objective look at the subject I've seen. What are the chances of getting it posted on the homepage of all the registrars? heh.

    Most excellent, Safe.

  4. #4
    Join Date
    Apr 2006
    Location
    Rhinebeck, New York USA
    Posts
    352
    A very clear, concise analysis. Excellent!

    Thank you safesys!

  5. #5
    Join Date
    Mar 2003
    Location
    Behind your curtains
    Posts
    4,793
    Sadly the very people this thread is aimed at are the ones that will totally ignore it. Perhaps make it a sticky in the appraisal forum?
    DomainView.co.uk - 60 day droplists. Hosted chasing. Backorders. Thousands of domains caught.
    DomainOffer.co.uk - powerful domain parking and one page website hosting

  6. #6
    Join Date
    Jun 2003
    Posts
    3,562
    Just to add I wonder what percentage of endusers actually view even good domains as just above reg fee, I think there are probably about ten percent of endusers that reaaly see the value of domains maybe less than that, just as an example a major health insurance company offered me 300 dollars for a domain that they own the hyphen of and i own the hyphenless name. I think they spent over 50k in adds considering i see them everywhere. They were very polite with there offer and followup when I told them i will be developing eventually and they wished me luck. This name earns me 1k-2.5k a year, so in many cases domainers actually pay more than endusers I think

  7. #7
    Join Date
    Jan 2003
    Posts
    1,938
    Newbies need to think traffic, not resell.
    Your domains are never completely worthless. They can always be used as a bad example.

  8. #8
    Join Date
    Sep 2006
    Posts
    748
    Originally posted by Chad
    Newbies need to think traffic, not resell.
    Development is also an option.

  9. #9
    Join Date
    Jul 2006
    Location
    48,3°N 10,9°E
    Posts
    755

    Re: End user sales reality check

    Originally posted by safesys
    I think a lot of newer entrants to the domain industry have a very unrealistic expectation with regards to end user sales.
    There will more been see jumping on the train in the belief of an
    alternative income source while the chances to succeed are more and more narrowed down. Especially when economical pressure is one of the motivation feeding the illusions.

    Making an profitable earning from domains requires the same seriousness in business as any other successful business operation.

    This includes but is not limited to:

    1. Capability to read, understand and analyze/work with
    statistics.

    2. Understand the marked and its fast variables.

    3. Structure.
    ( business and personal) The one essential many
    missing. Get a plain ISO 9000 quality manual as guide line if
    you have no idea how to set the general frame for a
    business.

    4. Financial recourses.
    If it should become any ore the main source of income there
    must be a substantial and independent budget.
    If you have to cut somewhere else to finance you already lost. Let it be.

    5. Knowledge on marketing. The essentials to begin with.

    5. Be aware there are more domainers as you think already established. Create positive relations, be serious and honest to get the right reputation.

    6. Read Domainstate.com

    That’s some of the frame work need to be don by newbies if they want to succeed.

  10. #10
    Join Date
    Jul 2007
    Posts
    250
    What are the most common or successful ways that you have found to maket one of your names to a related industry? (rather than just have it sitting dormantly in a marketplace like sedo)

    I dont believe cold calling could possibly be successful no matter how targeted the name....

    Ive considered joining message boards that relate to the names I have for sale but, do not feel right advertising my names there.

    So what would be the best way to give a name more exposure in an "end user" market?

  11. #11
    Join Date
    Jun 2003
    Posts
    3,562
    Originally posted by superwari0
    What are the most common or successful ways that you have found to maket one of your names to a related industry? (rather than just have it sitting dormantly in a marketplace like sedo)

    I dont believe cold calling could possibly be successful no matter how targeted the name....

    Ive considered joining message boards that relate to the names I have for sale but, do not feel right advertising my names there.

    So what would be the best way to give a name more exposure in an "end user" market?
    I have heard people say that buying adwords for the domains that you have with exact keyword match has worked for some people. IE" if you owned purplecars.com and "purple cars" was a competitve term they will actually just buy the adwords and state a specific sales price. I cant remmember who said it worked but i imagine end users check who is competing with them or where there sites place in google for the keywords and notice the names for sale.

  12. #12
    Join Date
    Sep 2002
    Location
    Wales (UK)
    Posts
    24,745
    I dont believe cold calling could possibly be successful no matter how targeted the name....
    Depends on your abilities and comfort with cold calling - it's not something everyone is good at.

    Cold calling and finding out who actually makes the decision and if possible speaking with them enough to pique their interest for the next sales stage is a sound strategy as long as there aren't any tm issues.

    I'd certainly put this kind of personal approach ahead of any blanket contact like fax/email shots or even letters - you can use those kinds of contacts once you've prequalified and warmed up the prospect.

    Ive considered joining message boards that relate to the names I have for sale but, do not feel right advertising my names there.
    I hate it when domainers do that on the non domain forums I use, it looks really tacky and never seems to attract anything other than bad feeling towards them regardless of the domain quality itself.
    When using google for counts - use double quotes for usage counts for multiword terms and set "match type" to "exact" for all search volume lookups. Click here for more info

  13. #13
    Join Date
    Sep 2002
    Location
    Gold Coast, Qld, Australia
    Posts
    6,985
    Originally posted by superwari0
    I dont believe cold calling could possibly be successful no matter how targeted the name....
    I once emailed (several times) and rang a successful company to inform them their domain - and exact match of their company name - was about to drop. It was like beating your head against a wall. In the end it dropped.

    After that experience, I'm with you, I'm guessing cold calling may not be successful either.

  14. #14
    Join Date
    Jul 2003
    Posts
    1,733
    Great input guys (admins). Thanks for the good reads.

  15. #15
    Join Date
    Mar 2007
    Location
    Utah
    Posts
    82
    Originally posted by superwari0 I dont believe cold calling could possibly be successful no matter how targeted the name....
    Sorry superwari0, but I don't agree. If you NEED to sell a domain, being proactive is always a better solution than sitting back and waiting. I think if anything, Safesys opening post proves this.

    People give up too easy. That's why contacting potential end-users rarely works. 3-4 hours sending emails is not enough time spent to call it an honest effort.

    Maybe I have a different take on this because I did door-to-door sales during my summers in college selling pest control contracts (of all things). It was brutal work being that it was hot, humid, full of rejection, and required consistency daily to be successful. By the summers end, I usually made somewhere in the mid $xx,xxx mark as a result of being proactive and approaching people. I saw many people quit before really trying. These guys lacked vision and real mental toughness.

    I bring that philosophy to domaining. It's all about numbers and finding the right people. You never know when one of your emails will show up in the inbox of a company owner who just had the single best sales day ever for his growing business. Or a company that just discussed in a board meeting the need to create more of an online presence. Or the business owner that recently decided he should invest substantial money into a better domain name. Etc.... There are hundreds of possible scenarios where your email will show up at just the right time for a particular business. Finding these people requires a ton of hard work. Maybe weeks. If it took a month to close a 6 digit deal, would it be worth it?

    I can back this up with past successes doing this. It's looking like I may close another very lucrative end-user sale in the next week using this method (I have already had a 150k offer from another end-user I emailed just this week - which I respectfully declined. I can verify this to the mods if needs be.).

    The last thing I want is for this to sound like boasting. Look at it this way; if it works for one, it can work for all. Nothing that magical about it.

    I completely agree with Safesys and what he said in the opening post about keeping it real. The numbers don't lie. I don't think many people know more about this business than Safesys, Snoopy, and Matt.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  

Sponsors

Trellian Direct Search Network
Domain Escrow Services
Above.com Domain Registrar, Marketplace and Revenue Optimizer

Industry Events

11-14 August 2019
Affiliate Summit East
New York, NY

4-6 March 2019
LeadsCon
Las Vegas

15-18 September 2018
MERGE 2018
Orlando, FL

Poll

How do you invest in domains?
to see the Poll results!
DomainState.com
Domain Tools | Domain Directory | Registrar Stats | Domain Glossary | Industry Events | FAQ | Members | Terms | RSS | Link To Us | Advertise | Contact Us
Other Related Trellian Services:
Above.com Registrar  |  Above.com Marketplace  |  Above.com Domain Manager  |  Free Search Toolbar  |  Free Webpage Builder  |  Keyword Research
Direct Search Navigation  |  Search Engine Submission and SEO Tools
Copyright © 2002 DomainState.com a Trellian Company 2014 Bronze Sponsor - Internet Commerce Association