Buy your snake oil here

[Edwin]

No, you're thinking of a market for something like oil, corn, baked beans, butter etc. where there there are millions of "units" of product and various acceptable substitutes (different brands, margarine for butter etc.)

A market in UNIQUE products (artwork, domains etc.) doesn't follow the usual supply/demand curve because the supply is "1" at any price.

Specific example: If you wanted to buy my domain name kids.co.uk then, regardless of how much you were prepared to pay me for it, I could never sell you two "kids.co.uk" domains, nor could I sell "kids.co.uk" to you and sell it to somebody else as well.

 

[rob]

Specific example: If you wanted to buy my domain name kids.co.uk then, regardless of how much you were prepared to pay me for it, I could never sell you two "kids.co.uk" domains, nor could I sell "kids.co.uk" to you and sell it to somebody else as well.

As we are having an economics 101 here - he also has kid.co.uk , which is what is known as a MONOPOLY



As for amat eurdra matics .co.uk if I asked a price I think I would have been quoted £1500 as edwin usually deals in firm pricing rather than 'make offer' malarky.

You cannot discuss people making 'good returns' and 'good offers' - the bloke who offered me £50 for a three letter today though he was making a good offer and would be a good return on my outlay to get it. Would I sell? not a chance...

 

[mibut]

365, I think that you are the one with who has his head in the clouds.
You agree a price for a domain name and then say that its "true value" is £2000 less. Crazy.
The ONLY reason that you would pay over its "true value" is quite simply you expect to recoup that money, if not you shouldn't be in business.
You mention edwins name amateurdramatics.co.uk as an example of a name who's so called "true value" is £500 but to someone who wanted to use that name for an amatuer dramatics site the value is a hell of a lot more, not just the typein value but also THE branding value.
I regged, not a drop, a name which surprised me was available on tuesday for £6.09 inc vat. By your logic as a 3 word generic it is worth next to nothing but i know that i will make a minimum of £8000 a year with it so based on that minimum i would not sell for less than £40,000 ,not an "inflated" price but one based on business sense.
Yes, in an "ideal world" we would all get what we want at a price we would be prepared to pay, but then if it was an "ideal world" we would all be broke

 

[seanc]

Rob,

if Edwin wanted £1500 for a mateur drama tic s.co.uk then he's got his head in the clouds.

wouldnt/couldnt the prices also be influenced by the amount of traffic the domain is already receiving?

 

[Edwin]

You cannot discuss people making 'good returns' and 'good offers' - the bloke who offered me £50 for a three letter today though he was making a good offer and would be a good return on my outlay to get it. Would I sell? not a chance...

Yep, it's quite literally none of the seller's business what the domain initially cost, as it has no bearing whatsoever on its actual value, which is - to belabour the point - whatever the "market" will pay.

However, the curiously twisted British concept of "fair play" seems to leak fairly frequently into what should be 100% pragmatic business transactions - you're certainly neither the first nor the last person to argue on the spurious basis of a "fair" or a "good" return.

If you were dealing with a US corporation as a prospective buyer, for instance, they would probably be analysing a domain buy from dozens of angles, but all of those angles would revolve around figuring out the exact value of that domain TO THEM and none would have anything to do with what the domain might initially have cost the buyer.

A "usable" piece of land in Knightsbridge such as a store might seek to build on could easily cost £20,000,000 or more, yet they don't begrudge the price that the buyer is seeking based on the fact that at some historical time in the past, the same parcel of land might have been sold to somebody's great great grandfather for £5. The buyer can't say "Well, your family bought that land for £5 so I think £50,000 is a simply stupendous return" - a laughable argument, yet the same one you seek to present to "justify" undervaluing domains.

Incidentally, the choice of amateurdramatics.co.uk as an example is amusing because that specific domain isn't truly for sale (ok, anything is for sale AT SOME PRICE) because my sister probably wants to use it at some point. There are literally thousands of amateur dramatics groups in the UK, but there will only ever be one amateurdramatics.co.uk so there couldn't be a better domain for the resource site she's thinking about building.

Here's the rub: unless you're Household Name company X, practically nobody's going to have heard of you, your products, your services or your brand. So you can short-circuit the whole hyper-expensive "branding" process and go for credibility that money (almost) can't buy by securing THE generic for that particular niche. And that's worth paying for, above and beyond the traffic/income generated by the domain (which is also a factor). More and more companies "get it", so why should sellers be prepared to accept anything less than the going rate for their names?

 

[rob]

Your answers all assume that you all know the market value of your names but only Rob has given me an answer that I can't argue with because at least he has the balls to get an appraisal prior to selling a name. The rest of you usually negotiate a price you dream up at the point of enquiry.

But I use appraisals as part of a wider informatin gathering exercise. To rely on them soley basically means you are getting someone else to decide on market value. Sedo appraisals are 11 pages of bollocks but the last page with a figure is useful as it is based on their information of sold names.

I 'dream up' prices based on what I know similar domains have sold for in the past, what it would cost to get a substitute name, appraisals and what the owner of the name feels it is worth (sometimes injecting some reality) etc - ie. my opinion based on info I have got.

Budgets come into it when brokering as that is a case of creating a sale that both parties are happy with.

 

[yesterday]

I initially offered £1500 (I believe the true value to be around £2500 and others have backed this up) and eventually got to £2500 then £3000 at which point I asked what the bottom line was and that's when the £4500 price was given, take or leave. So when then man you're buying from isn't worried where his next meal is coming from you have Hobson's choice.

How about this.

The lowball offer - £1,500 for a domain that has a worth of £2,500 is surely just as greedy as a sellers price of £2,500 + £1,500 = £4,000

So the seller was only £500 more greedy than you?

lowball offers keep domain prices down.
overpriced domains keep domain prices up.

A balance of each and we have an averagely fair market.

yesterday

 

[Edwin]

Edwin, you and others keep throwing around these concepts and comparisons but only Rob has told us how he reaches a "going rate". The rest of you dream up your own prices based on your own perception of market value and from conversations with others, a large part of that pricing process hinges on finding who the potential buyer is and what they can afford to pay AND most trade on the principal of it only cost me £5 so I don't have anything to lose.

Given that this is my 11th active year in the domain name industry, I think I'm as qualified as Sedo to "guesstimate" the value of a particular domain name. So yes, that's exactly how I "dream up" the value of a particular domain: I look at the keywords, bids, search counts, similar sales, potential buyers and the secret sauce ingredient of what my gut feeling is about the value of that domain TO THAT BUYER, and come up with a price.

 

[Edwin]

I think the truth is it's like the wild west out there and there's no skill involved. It's basically like playing the lottery and Russian Roulette at the same time. You pay your £5 and then see how far you can push a customer hoping that you can pull back from the brink when they finally say forget it.

It seems from the other posts on this thread that yours is pretty much the lone voice in the wilderness, and there are plenty of folks on here who treat domaining like the BUSINESS it is, and understand the ins and outs of the industry and the market very well indeed. I'm just glad we're comfortably in the majority, as domaining would be pretty depressing if the situation really was like the grim portrayal you're painting.

 

[mibut]

365, YOU cannot have a reasoned debate if YOU cannot accept the basic rules of business.

 

[deconstruction]

i am not sure about anyone else here, but my domains don't cost me £5.

once you take into account, my computer, my nominet membership, my dac membership, cost of dropcatching, time and money collating lists and looking for names to buy , electricity , etc, etc, list goes on...

i am damn sure each domain cost more than £5

:mrgreen:

 

[SF]

365, YOU cannot have a reasoned debate if YOU cannot accept the basic rules of business.

Please go into this more - I am quite lost?

 

[mibut]

The basic rule is to make a profit, as much profit as you can.
If someone wishes to put a high price on something that they own but you want, whether you or a panel of experts or your best friends dog think it is overpriced doesn't matter because quite simply because THEY OWN IT and YOU don't.
You want it, you pay for it, you don't want it you say byebye. Alternatively as 365 has done you can buy the name and then bleat about it being overpriced.
As i asked before, 365, do you expect to recoup your money and make a profit on this domain?
Or did you pay "over the odds" to give yourself something to moan about.

 

[rob]

Or did you pay "over the odds" to give yourself something to moan about.

If people want to buy names like that I have plenty I can price up obscenely and would give them value for money on the whingeometer

 

[James]

I suspect the seller in this case was not new to domain sales. They probably sold comparable domains in the past for comparable prices. Whether or not they were being "greedy", I am sure they knew the price they could get.

 

[mibut]

Someone once said, a domain name does not a business make. I don't intend the domain name to earn me a penny, I intend to build a business that happens to have the name of the domain that I bought. As with any business I'll need to spend money advertising etc.. in order to get people to come through the door and visit the web site. If it's a success - which as with any business is a big if - then myself and the other people involved will have created the success not the domain.

Agree with you that it will be yourself and other people who will have "created" the success but if you are saying that the domain won't make you a penny then any domain could have been brought for branding purposes.
You have "seen" the value in the name for your business, do you not think that the seller has seen that the name has value for a business and has therefore priced accordingly.

I own FAR better names than the one I've bought in the same sector and so I know roughly what type-in traffic I can expect and that will be between 20 and 40 a month. So I'm paying £4500 for 40 random visitors and the pleasure of trying to increase that.

If you own "far better names in the same sector" why are you buying an overpriced name?

I and someone else who I believe is respected on here think that it's overpriced

So what, you bought the name.

I'm not a satisfied customer though

One would never have guessed ...............