How to Pick and Evaluate Domain Names for Resale

July 14, 2007

I just bought a bunch of domains that I think are really good. All .doms, no hyphens, all highly searched keywords, all great branding, all good markets like travel, real estate, insurance, loans, cars.

So here is my delima. I want to pay for 2 featured listings on Sedo and/or Afternic, which costs 39.95 a month for each name. Obviously I want to pick the 2 best names that I think will be most attractive to potential buyers for these paid listings. But I can’t pick 2, I think most of them have very good sales potential.

So how do I pick the top 2 to buy a featured listing for? How would you guess which ones would be most likely to sell? Would you base your decision on: the industry, # of searches on the KW, branding, number of words in the name, other?

I’m sure some of you have been in this spot. What was your thought process and how did you make a decision? I know there is no clear cut answer on this, but thought it would spark a good discussion.

Sedo doesn’t sell domains. The domains sell themselves.

You question appears to be about domain value. Clearly, the one’s ‘with value’ are the ones to list. Theories about naming are nice, but the acid test is value. Not perceived, though you could debate that - insisting that it’s the perception that will evoke a buyer. Millions of domains that have lapsed passed the perceived value test. I’d rather focus on market value. Perceived is nice if you are prepared to wait and wait and lose money. Selection formulas help with assessing perceived value, but isn’t the real test ‘what domain(s) - with such perceived value - have actually sold in the past year?’ Appraisals, not based upon comparable sales, are as abundant as they are useless. What do I mean?

There is often an inverse relationship between the sophistication of the domain appraisal formula (read: extensive wording) and the formula writer’s experience in the aftermarket. Not in Lisa’s case. Just often. Some of the crapiest appraisals I’ve seen have gone on for pages and pages of analysis. I guess that makes the purchaser feel that they got something more for their money. My favorite appraisal factoid is the number of appraisal scams that are being run: “I want to buy your domain but will only buy it if it is appraised for $X AND you - the seller - must supply me with this appraisal”. Duh?

If you want to get a handle on value - which in my book means comparable sales - then go to the source for pegging value: BuyDomains. They have the largest inventory for sale, routinely beat all others in the domain drop process and likely have sold more domains than the next 100 resellers combined. You could also see info about past sales at Afternic and DNJournal.

Match up your domains with the closest domains you can find in BDs inventory that are currently priced. That will give you some sense of FMV. BD’s prices are actually rationale 85%+ of the time, which is more than I can say about 85% of the remaining domain resellers.

The trick in the aftermarket is a sound naming theory. There are a handful of people, besides BD, whose naming theory I’ve come to admire. The person behind TheNameStore is a very good example. Look at his collection of dating and real estate domains. One of the early players - WebsiteNames - shows similar skills. Compare your multiword domains with their holdings.

I believe I saw a few of the domains you posted at DS. I see youthful enthusiasm. Been there. Paid the price. I assure you, any hot properties that are dropping are not falling into your lap or mine. Any hot properties that are currently available for registration are … well … most likely beauty in the eye of the beholder. You may find someone to love your registrations. Love happens. Just less often for some domains. A good idea of the loveliness of your domain holdings if the frequency with which you find love letters (’How much for your domain’) in your email in box.

My holdings are in the 3,000 domain range, some of which you can find your way to by the link in my profile. I’ve been at this since 1999, not one of the early birds but early enough to have acquired some nice domains in the aftermarket before it caught fire again. I’ve sold domains in the $XX,XXX range. I’ve also bought domains in the high $XXXX range.

There’s often a tendency for people to think they have found a niche, cornered an undiscovered market, etc. I’ve come across literally 100s of such domain entrepreneurs. People who cornered the “MyWidget, MyOtherWidget” market. The ABCDomain, 1800Domain, PlanetDomain, HotWidgets/HotSmidgets etc phenomena. The most dangerous experience is making a sale - which can appear to validate the theory. These days, with $6 and $7 registrations the risk isn’t that great. When I started with was $70.

A decent acid test really is the response of a few of the bigger players at DS, people who’ve actually sold more than a few $1000+ domains in the aftermarket. There’s about a dozen people who post there that demonstrate a good handle on the aftermarket. If you ask for a value and you get a polite response at DS the domain is likely toast. If you get a palpable lukewarm response then you are likely on to something worth at least a few hundred to a few thousand - if you are willing to wait. The problem with people asking for appraisals at domain forums is that they are usually posting junk and when they get no response the inference that they draw is often wrongheaded.

Here’s the proven market: One word dot coms with a commercial nexus are the big league. Dot net is dropping like a rock, unless it’s really network related. Traffic typos have value. 2 word industry phrases/generics are of some value - depending. Geo domains in most extensions have value. Biz is stillborn. Info is rising. Org is working out its role. My theory is that if you do the right thing with an org you can gain the advantage of the org TLD brand. A domain that is a “brandable domain” is another way of saying “shot in the dark” domain: Hold it long enough and you might find a buyer - maybe. Again, the better approach is to scope out BD’s pricing.

The formula set forth in WW is nicely written and thoughtful. It is useless for fixing a value. Fixing a value is a whole ‘nuther lesson. What’s written is a guide to why/what someone else - or you - might want to register. It’s of no use in setting a value and that, after all, is the most important part of the game.

Lastly, if the domain is desirable, you needn’t list it at Sedo or Afternic. Someone interested in buying a domain that isn’t serving an active website will reach out to you. You can create your own splash page and save yourself the money.