The domain industry today. Whats going on, and where do we go from here.

[Andrew Shaw]

Here are the facts. Industries come and go. There is nothing you can do to prepare for or predict the fall of an entire industry. The world around us is changing every single day. People selling car phones in the late 80's, early 90's would have never expected phone use to be banned while driving a car. The fact is every single industry must realize that it will eventually be replaced by something bigger and better. THAT IS except for the domain industry. I do not see ANYTHING replacing or changing the domain industry anytime in the foreseeable future. It is evident that the sale of domain names has dramatically declined, and things have slowed down. That just means you have to change your strategies. Instead of quick flipping, you looking at a more long term investment. It's not for sure if we will ever see the values on domain names that we saw in the late 90's to early 2000's.... BUT.... domain names, website, and the domain industry in general is not going anywhere anytime soon. Focus on buying. Consider this the time when microsoft stocks were only a few dollars. Consider this the time when gold prices were less then $100 an ounce. We are pioneers. Whether youve been here since the 90's or you just joined us today.... We have an advantage right now in picking up the pieces that some were too impatient to hold onto. We are at an advantage to acquire domain names at a fraction of the price they were just a few years ago.
(1) The number to the left there represents the total number of each generic keyword .com's. Meaning, there is only one of each .com domain name, only one of each .net domain name, one of each .info domain name... etc. If I am a business owner, and I want that .com, I only have two options. Hope and pray that one of you reading this wasn't smart enough to register the domain name. OR pay you whatever it is you want for that domain name.

We are at a point where I would say modestly that at least half of the places of business are still not online. The number is growing, but its still ridiculously low. In the near future it will be essential for a business to have a website, or they will not make it.

I havent been wasting my time these past few years trying to figure out why my names aren't selling as well. I've been putting in effort to buy names for 1/100th of the price I know they would have sold for less then 10 years ago. It is indeed a buyers market. Unfortunately that does not mean people are buying (LOL) It means you need to be buying. You should be buying, you better be buying. A sellers market storm is brewing.

Just before a tsunami the tide reseeds, leaving fish flopping where there was once thousands of gallons of water. But eventually the water comes back in, with a bang.

Good luck everyone. I wish you all the very best!

 

[accelerator]

I haven't bought any domains for quite a while, because I can't afford the high quality ones I'd be interested in. The domainer to domainer resale market has taken a big downtown over the last few years, and that's where it was easiest for many to operate and make money. Now, only the highest quality domains would be of interest to me. I am still looking to the future to think of any potential opportunities, but I am extremely fussy when it comes to buying. Too many people get carried away buying, and they must be more careful too.

Rgds

 

[katherine]

Hi Andrew,

Where did you get this:

It is evident that the sale of domain names has dramatically declined, and things have slowed down. That just means you have to change your strategies.

I'm seeing reported sales every week on DNJ and other sources. Sure there are ups and downs but it's not like the stream of sales has dried out. Big sales are still taking place as we speak.
On the other hand I agree with Accelerator that the domainer market has had better days.

This is what I have learned after over a decade of domaining:
First of all, domaining has become very competitive. More and more people are trying their luck and competing against you. Also, there is often more money than common sense in this industry. There are people throwing out a lot of money in dubious domains and they can certainly outbid you at the auctions. That's why you see a good chunk of domains selling at end user prices. That makes it tough to resell at a profit. We must make big margins to offset the lack of liquidity and low turnover.

It's true that we are pioneers in a way, but the market isn't growing as much and as fast as we would like. We domainers tend to overestimate the size of the market. Like you said Andrew: "The number is growing, but its still ridiculously low."

End users are buying when they have a present need, very few do stockpiling of domains for the future - so timing is often more important than pricing. Domains are hard to move when the need isn't there. You have to own the right inventory at the right moment. End users also have plenty of alternatives available to them. We need end users more than they need our domains. They can certainly bypass us if they don't like the song

The difference between 'then' and now, is that the market may look more confusing after being flooded with so many garbage extensions and hype, but the fundamentals remain.
IMO

 

[accelerator]

For me, the other difference is that there is less hype and perceived rarity value of domains. In the "domain boom" businesses could easily be sold the case for a generic in terms of its uniqueness and potential business advantage. Businesses didn't want to "miss out". I don't feel that's so much the case now, and the new extensions won't help.

Rgds

 

[Biggie]

I haven't bought any domains for quite a while, because I can't afford the high quality ones I'd be interested in. The domainer to domainer resale market has taken a big downtown over the last few years, and that's where it was easiest for many to operate and make money. Now, only the highest quality domains would be of interest to me. I am still looking to the future to think of any potential opportunities, but I am extremely fussy when it comes to buying. Too many people get carried away buying, and they must be more careful too.

Rgds

I haven't been aggressively buying, over the past few years.

mostly i'll just going after "low cost fruit" and store it in mason jars, till a shopper comes along.


like buying names with letters that other domainers don't consider premium or number domains with 4's.


to me:

"high quality" is a perception, "also" associated with a name, by the buyer.... for their needs.

so, you don't always have to spend big money going after what "other" domainers think is a "high quality" domain, to sell one for a high price.


imo...

 

[Theo]

God, get some duct tape and a gas mask already and run for the hills.

 

[accelerator]

I think mobile is also a threat to domains, because people will tend to use Apps, thereby reducing the importance of domains.

Rgds

 

[katherine]

Many years ago, people would say that domain names would become irrelevant because of the search engines. People use search engines to find information.
But now we know that domain names are still relevant. There are many reasons for that, one is that they remain essential for branding and advertising.

 

[accelerator]

I still think domains will remain relevant, but the increasing use of Apps will make big companies think more carefully about how much they will pay for a domain.

 

[airmax]

I used to sell a lot of my names with sedo, these names used to be reported, now 80% of my domains sell thru escrow which are unreported... 10% thru godaddy which was unreported until recently, and another 10% thru afternic, which is now owned by godaddy, and has always been reported.

So like me, there are hundreds more that do deals via escrow.com, names that on the forums that wouldn't even sell for $100 if listed via fixed price that sell for 4-5 figures. These are names that most people never here about, that get moved, developed, and indexed into google, and there it is.

I have to to agree, I have pulled back in purchasing in the aftermarket, as I see some names get purchased more expensive on the wholesale/drop side for more than an end user would pay in some cases. I do follow up, I am seeing domans sell in the aftermarket drops in the 3-4 figure range to people with locations in India, and China, which many years ago was not really even apparent given the economies of scales, and what a dollar buys in these markets.

The market is strong, if you have good quality keyword domains, they do not have to be single word .com's, even three keyword .com's sell thru well, but I do see weakness in the .net from an end user perspective from what I have seen within my own portfolio. I agree many businesses are not online yet, and most end users are clueless about a lot of the valuation, and other processes involved in domaining. There is a lot of education online though about it. Don't be fooled by doomsday scenarios...

 

[Andrew Shaw]

Where did you get this:

Originally Posted by Andrew Shaw It is evident that the sale of domain names has dramatically declined, and things have slowed down. That just means you have to change your strategies.

That was really just referring to many people moral here on the forum. People have been discouraged because they post a name for sale on the forum, and don't get any responses. BUT I agree with you in that names are still selling. back in the early 2000's even horrible names were selling. I dont know if you were around, but there was a point in time where all the 4 letter domain names were registered, and so were all the 5 letter domain names. Even horrible variations were selling for low-mid xxx. ie. XTZDP.com. In many aspects, sales have declined, where as good generic USEFUL names are still selling great. I am not saying that the market is going down, I am saying just the opposite. I just think the market has corrected itself, and people need to try different strategies if their old strategies are no longer working. I am and always will be a die hard DNF member, but there are other places to sell domain names. People get discouraged when their domain name doesn't sell on here, and automatically assume the market has gone to shit.

End users will always have options, but if they are looking for a specific name in a .com, they only have one choice. They always have the choice to sort of go around what they want.... ie forums.com vs theforums.com or domainnames.com vs bestdomainnames.com but every step they take away from the direct term, dilutes the results in my opinion.

I agree with most that was brought up. Although I understand why you may think that smartphone apps may decrease the need for domain names, the business owner will always need it's domain name counterpart. I have a smartphone, but I probably visit 10 times more websites then I do apps.

This industry has always been exciting to me. The possibilities are endless and I see a lot of avenues open now more then ever. Thanks everyone for your input. I think it's all very helpful and I look forward to hearing from more of you.

 

[domainbartender]

During the economic crisis, it was just -bleep- no sales, nothing. Now everything's returned to normal, at least for me. I still don't think domains are being valued as much as they should be (Helloooo world, we're living in an increasingly high tech world and domains matter!!!) but if you put in enough effort it should pay off. Apps will never take the place of websites 100%, I believe there will always be a use for domains.