Domain Valuation in 2018

[Travoli]

Got an e-mail about a single word, 8-letter domain. Potential buyer threw out a $$$$ offer. I declined, saying we aren't in the same ballpark. He came back with "What do you want? I might be able to go there."

Where do you guys go for research, or what methods are you seeing for domain valuation in 2018?

[rcjordan]

I could never come up with any decent guidance. Every negotiation is one-off.   Somewhere around here there is the Lynsky approach to no haggling. "Just give me an offer and I'll tell you yes or no."  Ballsy, but it works.

[aaron]

I think the buyer & why they are buying matter far more than comp prices, but there are databases like
http://dnpric.es/
https://namebio.com/
Big fan of the idea of getting them to name the price they'd pay first & then try to triple it from there and maybe settle on a double or 2.5 or such.

To some degree it depends on how replaceable the name is. The ceiling on .com names is much higher than on .net .org .info etc.

A lot of startups shifted away from quickly buying the .com to going with .io .co. or like getappname.com or appnameapp.com or some such & then only upgrading to the core .com name after they got significant traction in the market.

[Rupert]

I agree. The key is not the number of digits, the word, but what it is worth to the buyer. 

Its difficult to get 2 people looking to buy at the same time to get competition, unless it is very special.  I have had a 4 digit .co.uk domain on ebay for £400 for 6 months, and I have 1 watcher. (its ivet).  so loads of small vet practices might be interested, and in the UK, these practices are being bought up by a few big players. So I think there is less hunger for domains at present.

[aaron]

Its difficult to get 2 people looking to buy at the same time to get competition, unless it is very special.

One thing some sellers do to help buyers bid against themselves is state some prices they turned down in the past...which infers the floor price is above that number without actually having the seller state their actual sales price.

I have had a 4 digit .co.uk domain on ebay for £400 for 6 months, and I have 1 watcher. (its ivet). 

There have been some cases where domains go for more at the alleged wholesale auctions than they go retail. I think setting the price crazy low (but maybe using a reserve) and getting a few bids on it could likely drive more perceived value and urgency than leaving a listing up for months at a set price.

so loads of small vet practices might be interested, and in the UK, these practices are being bought up by a few big players.

The same type of vet roll up play is happening in the US and China.
https://www.theinformation.com/articles/dogs-and-cats-are-next-big-thing-for-chinas-hillhouse
https://www.wsj.com/articles/SB857342098455124000
https://www.bloomberg.com/news/features/2017-01-05/when-big-business-happens-to-your-pet
https://www.reuters.com/article/us-vca-m-a-mars-inc-idUSKBN14T1FH
https://www.wsj.com/articles/mars-expands-pet-care-business-with-purchase-of-veterinary-firm-anicura-1528704079
https://www.prnewswire.com/news-releases/mars-petcare-acquisition-of-optigen-llc-will-enable-discovery-of-new-genetic-health-markers-for-dogs-679281993.html
https://www.prnewswire.com/news-releases/mars-petcare-ushers-in-future-of-pet-care-industry-with-new-accelerator-and-100-million-venture-fund-300611389.html

I think there is less hunger for domains at present.

To some degree I don't think declining demand is specific to that industry but is reflective of combination of overall economic consolidation happening in category after category after category
https://hackernoon.com/more-or-less-competitive-b890c7e89f94
coupled with Google, Facebook & other apps trying to displace downstream traffic off their network and diminish the perceived need for independent websites. In some emerging markets people think of Facebook as being the web & some retailers put their Facebook URLs on their packaging rather than a URL they control & can forward to wherever.

And if small indy players (who operate in markets too small to justify large brand ad budgets) keep getting bought out in a way that leads to brand dominated vertical markets then many/most generically descriptive domains might have hit their peak valuations 7 or 8 years ago.

Branded names are much more hit or miss & much harder to value unless a company has already established a strong brand and then is trying to acquire the associated core .com domain name after the fact.

[Rupert]

Aaron,
you say it so much better than me

There have been some cases where domains go for more at the alleged wholesale auctions than they go retail. I think setting the price crazy low (but maybe using a reserve) and getting a few bids on it could likely drive more perceived value and urgency than leaving a listing up for months at a set price.

You are right I am sure. I am clearing out a few domain I have held for years, inc one from 1999 I am considering... gulp... and I am sure I am not the only one. So again, agree the bubble has burst with so many extensions now available. Bought a not bad 9 letter .uk domain for a potential project last week. My local mower shop went for a .co.  (causes havoc with emails, as everyone puts it as .co.uk)
Travoli
Can you look up "sold" on sedo the way you can on ebay?  Interested to know what you do.

[ukgimp]

What would you take? Ask for a bit more than that.

Otherwise what are you going to do with it?

Is it really worth what you think. I have asked about some domain and get crazy prices.

Cash in the pocket is good. I doubt it will make any difference to your life either way :-)

[aaron]

Can you look up "sold" on sedo the way you can on ebay?  Interested to know what you do.

I haven't looked up comps much like that unless I was the potential buyer & I was including other information on way to talk the price of a name down.

But I haven't been much of a buyer in many years because the search results are ad heavy (especially on mobile!) and the algos have shifted away from generically descriptive toward branded names. Very hard to build a big well-known brand without also having many employees. And I prefer not to have a lot of employees because I think if I did I would end up melting down from stress.

The best spot for regularly reporting sales (typically weekly) is
http://dnjournal.com/domainsales.htm
but then the other 2 databases I linked above aggregate data from there along with perhaps a few other minor data sources.
http://dnpric.es/
https://namebio.com/
there are probably another couple sites like these 2, some which focus on short names or specific local TLDs.

I think this really nails the sort of shift that has happened with domain names, as SEO became less predictable, more expensive & crowded out by ads in the SERPs
http://dnjournal.com/cover/2018/april-may.htm

That feeling was the first step in a journey that would eventually lead to Bergman's acquisition of Great.com. A lot of people believe that even at $900,000, Great.com was an excellent buy. When it comes to domains, Bergman knew what he was doing long before he began his pursuit of that name. "When it came to domain names it first started out with actual websites - small affiliate sites in various segments. At first, I was only interested in exact match domains for all the SEO benefits but later on it’s been more about being able to build a big brand with it," Bergman said.

"In the beginning it was mainly .se and.nu which are the top Swedish TLDs. I had bought smslån.nu (meaning "payday loan") for about $10,000 and lånapengar.com (meaning "lend money") for about $3,000.

GoDaddy has a quite large inventory of names built up from various portfolio acquisitions & they tend to be more flexible with pricing than many other sellers. But they've done well on the stock market & certainly are not desperate sellers or such.

[h00t]

Try Estibot.

At the end of the day, you'll always want more and the buyer will try to push it down. Money in the bank is better than a speculative price of what it "could be".

[Rupert]

h00t... good to see you about again

[Travoli]

All good information and advice, thank you. I tried RC's "yes or no" exchange first. I said no, buyer returned "What do you want, might be able to go there"

I looked through some recent sales and auctions. Saw the plural of the domain for sale with price listed. Searched standard and news sections of Google to make sure I wasn't missing some important related companies or developments that would boost value.

I settled on 5x his opening offer. Checked Estibot later, and my price is ~125% of estibot.

If it sells, I won't feel like I gave it away.

Buyer is thinking it over.

[rcjordan]

>I said no, buyer returned "What do you want, might be able to go there"

Bingo!

He broke the "Next Ones Who Speaks Loses" sales closing method.  To save face, and since they are still operating anonymously, they'll sometimes send in a 2nd person if you said no to their first pass.

I used Escrow.com for the money-handling.

[ergophobe]

Searched standard and news sections of Google

I had an offer for a domain name that seemed to have no commercial value at all and a bizarre pitch (birthday present for sick sister or some weird thing like that). I asked Webwork what he thought was going on and he came back 10 mins later with the guy's trademark filing on the USPTO site. That's always worth a look if you get an unsolicited pitch.

[h00t]

h00t... good to see you about again

thanks, at this rate, maybe I'll make the inner core by 2027