So how do you price domain names?

[A D]

How do you price a domain when an offer comes in?

A couple scenarios,

An offer comes in on a domain that makes $5 a day how do you price the domain to the end user? Does the $5 come into play when you price it.

An offer comes in on a domain that makes 5 cents a day how do you price the domain to the end user? Does the 5 cents come into play when you price it.

-=DCG=-

 

[chillking]

I think most domains that are non tm's that are making $5 a day go for 7 years revenue. But also the domain alone can be worth zero or as high as a domain name can go for. As you know it depends on what the domain name is.

 

[Johnn]

End users don't care or may not understand about revenues from clicks or traffic. They normally have an idea what they want to do with the site and would not care much about "reseller talk".

I would pick their brain and find out:
- Who are they
- What will the do with the name
- Budget

I bought a 3 character dot com here for $206 and the end user called me to offer the name for $500. I spent 25 minutes with them on the phone and after picking their brain out we settled for $2,000 via Escrow.

I don't think there is a formula you can use for end users as they are all different and unpredictable.

 

[Biggie]

How do you price a domain when an offer comes in?

A couple scenarios,

An offer comes in on a domain that makes $5 a day how do you price the domain to the end user? Does the $5 come into play when you price it.

An offer comes in on a domain that makes 5 cents a day how do you price the domain to the end user? Does the 5 cents come into play when you price it.

-=DCG=-

first, i will always consider the original cost of acqusition and view the offer in terms of "need to sell" vs "am i happy if it doesn't sell"

once i have resolved that issue, then i can throw out whatever price i want, accept their offer or reply with a counter offer.

obviously the offer did not meet your expectations, so perhaps you can base price on a few of these concepts..

1. what you paid for it, including all renewal fee's to recoup initial investment

2. what the revenue and traffic is now and expected growth in the future.

just because a domain only makes $5 a day now or 5 cents, doesn't mean it won't make $8 a day next year and $15 a day the year after.

so pricing on a 10, 20, or even a 100 year multiple is tricky.

the domain itself plays a part in pricing

is it a niche' category, expanding market, high volume product, high tech tech, medical, insurance, etc.

all those things to consider along with how many other offers have you received on the domain.

say it's a product name or category, what is the retail price of that item/product or service.

what is the click thru rate on the domain now?

say it's 25%, meaning that 1 out of 4 visitors will click. that can translate to so many sales on an actual website marketing that product.

you could use those numbers to determine pricing as well.

so many variables to consider, but when in doubt...go with "gut" feeling

imo...

 

[theinvestor]

End users don't care about revenue but i am sure it comes to play when you want to sell...i wouldn't sell a name making $5 a day for $1000 no matter how bad the name was.

 

[Domain Jedi]

Valuate.com + Estibot.com / 2 = Sales Price

:lol:

 

[TheLegendaryJP]

In those two cases to an end user of course you would demand more on the $5 name. It would be a matter of figuring out premium above 7-15 yrs.

On the 5 cent a day name you would likely demand as much seeing as it is an end user however you would tend to be a lot more flexable after that should they counter.

 

[hugegrowth]

From what I've read of people who sell a lot to end users, the end users don't care about what the domain earns per day. From the sales I've had to end users, same thing. So the price you ask is dependent on what you feel it is worth, and what you think they are willing to pay. It helps to know who the potential buyer is so you can get an idea of what the name would be worth to their business.

If the domain earns money for you each day, you might use that as a metric to determine a bottom value, and use whatever annual multiple that's suits you.

There are so many variables to consider, like are you in need of money or not, do you need the sale or not, does the domain make money for you now or not, how long have you held the domain, do you have plans for the domain, could the domain have value to others now or in the future.

I guess it's really a mixture of things that determine what to ask, and not just what the domain earns per day.

 

[draggar]

http://www.amazon.com/Polyhedral-7-...=UTF8&s=toys-and-games&qid=1257968024&sr=8-16

Case closed.

I take a look at what similar domains have sold for (I don't have any "revenue" domains so I can't go with that at this time).

 

[BidNo]

I also look at sales of similar domains. IMHO, unless you think your domain is at/near peak earnings, current earnings provide a distorted view.

 

[David G]

End users do not care. I never had one end-user ever ask about traffic or stats. Even when I offered it they did not want to look at it.

Also, I would never sell a domain based on revenue anyway what with revenue being down so much over past few years.

 

[BostonDomainer]

End users do not care. I never had one end-user ever ask about traffic or stats. Even when I offered it they did not want to look at it.

Also, I would never sell a domain based on revenue anyway what with revenue being down so much over past few years.

spot on! I never buy based on revenue and I never sell based on revenue. For me, pure type in traffic and companies that uses the word (or phrase) say in the name of their business or ads is where purest equity lies. Then I consider trend, who the buyer is, ROI, etc.

 

[tekz999]

1) Definitely.
2) As you like. Not much difference anyhow.

 

[Bill Roy]

I do not consider 'revenue' when calculating a price for an end-user, what I will do however is calculate a 'multiple' based on earnings under which I would feel I would lose out on a sale if I sold a domain under that valuation.

In your examples let us say


1) $0.05 x 365 = $18.65 revenus per annum

therefore producing about $11 profit per annum

any sale at circa $100 would cover projected financial income for 9 years.


2) At $5 a day

$5 x 365 = $1,825 per annum

equating to a profit of $1,800 per annum

so a sale of circa $14,000 would cover revenue losses for 9 years


The problem here is that trying to fix a hard and fast rule does not apply with end-user sales, the domain making $0.05 a day may be an all encompassing term for the end-user and could be worth $100k to them, whereas the domain producing $5 a day may just be a general phrase with no conceivable value except common usage and therefor the price is mandated by income, all be it approx. 1/7th the value of the domain making just one percent revenue in comparrison.

In other words every valuation is on an individual basis, in this business it simply has to be.