Domain Prices and Sales - eh?

[cc976a]

Am I alone in being unable to decipher this seemingly mesmerising world of domain selling at the moment?

Even as far back as a year ago domains and sites were selling ok and I could understand most sales.

Today things seem different. I have just checked through the recent public sales on Domain Prices achieving four figures and probably 90% of which could have been listed in our own bargain bucket with someone daily dropping the price 'one last time'.

I'm not for on second saying the prices domains are selling on here are their 'worth' - they are the resale prices people are trying to get to bring in some revenue either because they at least see some market here (but in reality this went a while ago for sub £500 names) or Sedo hasn't generated the five figures we all thought of when paying over our £7

...but am I alone not being able to spot any patterns when so many seem brandable by nature - something we can merely guess at. Any science left in this game (without having £xx,xxx to start off with)?

 

[Edwin]

I believe fewer and fewer buyers are showing up on Acorn, but of course that doesn't change the number of end-users approaching sellers directly since they never see Acorn at all. Thus a widening gap between what's being achieved on here, and in the wider market.

Also, if your model has been "high volume quick flips from catch/reg fee to £xx" then the drying up of the Acorn bottom-tier name market will have had a disproportionate impact, because every sale is only paying for a handful of renewals. Those able to hold out for the DomainPrices.co.uk-level sales will be more insulated, because each sale will be paying for many hundreds of renewals.

 

[cc976a]

It's true about the bottom falling out of the lower end. Anyone here trading at that level would have been impacted but it does raise the question of why - is it a case all these type of sales were just between buyers and sellers of a sub £100 market - or were these also being snapped up by people with more valuable portfolios as the end user market was there (but now disappeared)

I guess the pattern I was referring to are the end user sales happening on Sedo and the like. If I were to take a look at just these sales over the past two months I'm not sure what conclusion of buying habits is taking place.

Seems to be a world centred on made up / brandable two word domains (with few local exacts) that even with a pocket of pounds I'm not sure where I'd place my bets for the next run of sales. It all appears a bit 'random' - or is this just me?

 

[Edwin]

If you dig back a few years into old DomainPrices.co.uk sales, you'll see just the same phenomenon i.e. a broad mix of descriptives and brandables. I don't think there's any "new trend" in that respect, but maybe it feels that way because the Acorn sales don't come so readily any more.

As for the question of the "disappearing lower end" on Acorn, it's likely to come down to a number of factors. For example:-

A) The average quality of names being offered for sale is dropping while the number of names posted for sale is rising. This is because more and more hopeful domain owners are finding Acorn for the first time, while people who have been selling on here for years have already cleared out large sections of their portfolios and in many cases have already allowed buyers to cherry-pick their better names on a number of occasions. This means that the name-quality-per-time-spent-looking is plunging.

B) The "seen it" factor: the same names seem to get posted again and again, weeks or months apart. I understand that the sellers want to give their names wide exposure, but when you're a long-time Acorn user you may have seen some names come back many dozens of times and it gets more and more repetitive, so the amount of time wasted per name bought is rising.

C) The "incremental improvement" problem: if you already hold thousands of domains, the value to be gained by acquiring one more low-end name is a rounding error compared to the overall potential value of your existing portfolio.

D) The "moving upmarket" factor: I see more and more buyers choosing to buy a handful of names for £x,xxx-£xx,xxx rather than hundreds of names for £xx. One reason is because the deals are likely to be easier to find as folks in the "real world" (i.e. outside the cosy Acorn domainer community) are feeling the pinch, and so may be much more willing to let go of their prized domain assets at a knock-down price. You saw that phenomenon in the recent property crash as well: upmarket properties in desirable areas held their value FAR better than the market average, while those lower down the property ladder saw values crash and burn ("flight for quality").

E) The "lesser extensions dash": far, far more domains are being posted for sale in the .org.uk and .me.uk extensions than historically, but many buyers who have shown a willingness to buy consistently in the aftermarket over the years won't touch them regardless of the "quality" of the name.

F) The "too many venues" issue: some sellers are posting their names in multiple forums in quick succession, for example many "offers invited" or "portfolio sales" threads seem to end up as starting points for a Sedo, Acorn Auctions, eBay or DomainLore auction, and I think that kills the interest for many buyers since time is money and they don't want to have to mess around for a week or more to acquire an £xxx name.

G) The "desperation factor": because of A) to F) and probably dozens of other reasons besides, many of the remaining sellers demonstrate a near-panic in their sales pitch, constant thread bumping, and the pace at which they drop their prices (£XYZ today, 50% of £XYZ by teatime, £20 tomorrow) This makes rummaging around in sales threads ever less appealing, like shopping in a store where all the merchandise is strewn randomly on trestle tables and stickers scream "everything must go" in a luminous blaze on every flat surface.

 

[doodlebug]

To me Acorn and DL sales are dying but end user seems to be changing in a positive way looking at the sales on DP, I think another couple of years and if we all hold onot our stock we will have some good sales

 

[willbon]

To me Acorn and DL sales are dying but end user seems to be changing in a positive way looking at the sales on DP, I think another couple of years and if we all hold onot our stock we will have some good sales

Agree with that sentiment... I think there's a knee-jerk reaction to the current economic situation and it's actually a good time to buy the low-end domains... if you can find anything half decent in the threads!... there's a lot of garbage at the moment... but I think there's some value in the odd 'cheapie' on here.

... we shall see!

 

[websaway]

I agree almost to the letter with what Edwin has posted above.

Recently name values have been determined purely by google local search results, this I believe is not sustainable because it is a moving target so therefore the names are not guaranteed a lasting value, and the search results are not entirely reliable, the name may only be good for it's purpose in the short term. Many new domainers have not learned to determine values by considering other factors particularly uniqueness and long term value. The result is huge portfolios of names that are not tradeable or are only tradeable at very low prices, the glut of names is pushing those prices lower and lower so the principle of selling them is becoming less feasible. The big problem I see is that new domainers coming into the industry will see the low quality names drop and register them again so the cycle continues.

 

[Bailey]

Nicely summarised Edwin.
I wonder how domains sales have been just domainer to domainer in the past. And yes the economic pinch says "No more" for the time being. Whereas the enduser market demand is probably slightly deflated in regard to ad spend but overall there is enough money moving onto the internet to compansate for those with decent names.

what an ad spent dollar is looking for is in no way comparable with the domainer to domainer small site builder wants - Hence one market falling and another staying reasonably healthy, but nevertheless still influenced by those same d2d sales drops

 

[Edwin]

I wonder how domains sales have been just domainer to domainer in the past.

Probably 95-99% of sales on Acorn have been domainer to domainer. And a lot of folks - including me - have given up buying on here, for the most part.

 

[cm1975]

I agree with most of what has been said, but I think there is an H.

If you consider the upcoming auctions of 2 character domains, then some domainers must be hold back cash to bid on these. I don't know the exact number of domains available but let's say 500. If we say there are 2 acorn members bidding on each and they might go to £1000 for a domain, based of 3 character doms selling for £500, then by my calculations you have 500 x 2 x £1000 = £1m of cash being held to buy domains.

Going on this theory, then you have a million pounds taken out of the market. If you remove that kind of cash from any economy, then it is going to become depressed.

I could be wrong, but we will see if the market recovers after the first of the 2 char domains get sold on to end users, and when domainers lose out and look for alternative investments.

 

[websaway]

I agree with most of what has been said, but I think there is an H.

If you consider the upcoming auctions of 2 character domains, then some domainers must be hold back cash to bid on these. I don't know the exact number of domains available but let's say 500. If we say there are 2 acorn members bidding on each and they might go to £1000 for a domain, based of 3 character doms selling for £500, then by my calculations you have 500 x 2 x £1000 = £1m of cash being held to buy domains.

Going on this theory, then you have a million pounds taken out of the market. If you remove that kind of cash from any economy, then it is going to become depressed.

I could be wrong, but we will see if the market recovers after the first of the 2 char domains get sold on to end users, and when domainers lose out and look for alternative investments.

Interesting does anyone know how much american airlines paid for aa.co.uk or countrycasuals for cc.co.uk ?