Wanted: Domain Appraisal Valuing and negotiating prices for a premium domain

[markb]

I was just wondering how people go about valuing, negotiating and selling the most premium .co.uk and other domain names.

Lets say you owned one of the best .co.uk domain names available, for example if you owned the domain 'holidays-co-uk' and a multi billion pound holiday company was interested in buying the domain.

If they asked how much you wanted to sell the domain for, how would you go about initially valuing the domain and what kind of price would you ask for it? Domain names are very hard to value and I know it depends on how much someone is willing to pay for one, but how would you initially price a domain to a company.

 

[websaway]

I was just wondering how people go about valuing, negotiating and selling the most premium .co.uk and other domain names.

Lets say you owned one of the best .co.uk domain names available, for example if you owned the domain 'holidays-co-uk' and a multi billion pound holiday company was interested in buying the domain.

If they asked how much you wanted to sell the domain for, how would you go about initially valuing the domain and what kind of price would you ask for it? Domain names are very hard to value and I know it depends on how much someone is willing to pay for one, but how would you initially price a domain to a company.

What most don't look at is


What was it purchased for
what's the industry
is the industry growing or declining
has the name got potential for the buyer to benefit financially
could the seller easily and cost effectively monetise the name
Is there more than one potential buyer
Has the name got potential to grow in value if it's not sold.
does the name have prestige value.

and don't forget if a business buys a top top name for £xxx,xxx it only pays maybe £xxxx per annum to service the loan to purchase and still has the name as a business asset.
A lot of businesses carry a lot of waste outgoings and are advised not to pay for a domain name, and are then charged astronomical amounts for the advice , they are advised, don't buy a self producing domain that cuts down customer acquisition costs but you can pay us to seo your inferior domain forever.

At the moment there are a lot of fools guiding the fools on the current state of the name market.
Exact match long tailed domains distorted valuations of domain names and confused potential buyers.

A short industry or product exact domain is still much more valuable than most people are paying at the moment and yet could be the best investment a business ever makes.

the introduction of .uk aside, buy a good domain and plaster it everywhere .

 

[markb]

What most don't look at is


What was it purchased for
what's the industry
is the industry growing or declining
has the name got potential for the buyer to benefit financially
could the seller easily and cost effectively monetise the name
Is there more than one potential buyer
Has the name got potential to grow in value if it's not sold.

This is just a hypothetical question, so as in my example, say the domain 'holidays-co-uk' was purchased directly from nominet a long time ago, its in the billion pound holiday industry and the generic domain is an exact match for the company who wants to buy it. How would you go about putting a value/price on it?

 

[websaway]

This is just a hypothetical question, so as in my example, say the domain 'holidays-co-uk' was purchased directly from nominet a long time ago, its in the billion pound holiday industry and the generic domain is an exact match for the company who wants to buy it. How would you go about putting a value/price on it?

Not wishing to over simplify this one but many would want the domain so it would find it's own value.

 

[websaway]

http://domainate.com/2013/01/bad-domain-advice/

 

[domainseller200]

I was just wondering how people go about valuing, negotiating and selling the most premium .co.uk and other domain names.

Lets say you owned one of the best .co.uk domain names available, for example if you owned the domain 'holidays-co-uk' and a multi billion pound holiday company was interested in buying the domain.

If they asked how much you wanted to sell the domain for, how would you go about initially valuing the domain and what kind of price would you ask for it? Domain names are very hard to value and I know it depends on how much someone is willing to pay for one, but how would you initially price a domain to a company.

It is worth whatever you are happy to sell it for. Nothing else matters regardless of the domain name in question.

 

[markb]

It is worth whatever you are happy to sell it for. Nothing else matters regardless of the domain name in question.

Hi Frank, you are no stranger to selling good domains for a good price. Do you just pick a price that you would be happy to sell for and stick to that? Also, when you have a price in mind, what information do you give to the potential buyer to backup your valuation? Or do you just say "this is how much I want for it" ? i.e. whats your sales pitch/spiel to convince the buyer that the domain is worth what your asking?

 

[accelerator]

To get the true market value of a domain, you need to market it thoroughly to all potentially interested parties, e.g. marketing pack posted to them, and ask them to make you an offer. Once all the offers are in, you know what the domain is worth, and you can sell if you want or hold out for more.

If you only ever deal with one party, you don't know true market value, as some party that might have offered more won't get the opportunity to.

If you are going to deal with one party, get them to make you an offer and sell if you are happy to.

Just my opinion.

Rgds

 

[Systreg]

Once all the offers are in, you know what the domain is worth, and you can sell if you want or hold out for more.

You could ask a hundred people how much they want to offer for a domain, and they'll give vastly different amounts in return, and they'll all pretty much offer a lot less than it's worth. Asking all interested parties will not tell you how much a domain is worth, it's worth what the seller is willing to sell it for, if the buyers aren't up to that amount, it's not selling.

 

[accelerator]

You could ask a hundred people how much they want to offer for a domain, and they'll give vastly different amounts in return, and they'll all pretty much offer a lot less than it's worth. Asking all interested parties will not tell you how much a domain is worth, it's worth what the seller is willing to sell it for, if the buyers aren't up to that amount, it's not selling.

I would say a domain can only ever be "worth" what a buyer is willing to offer for it, as then a transaction can happen. A domain cannot be "worth" what a seller is willing to sell it for, as the seller valuation could be totally unrealistic, and therefore a transaction can never happen, and in reality, the domain is not worth what the seller wanted.

My opinion is there must be a real offer made for a domain to be "worth" something. If a seller is not happy with the offer he receives, he can ask for best offers, and whatever they are will be the domains current market value (if enough buyers are asked).

Rgds

 

[Systreg]

I would say a domain can only ever be "worth" what a buyer is willing to offer for it, as then a transaction can happen.

The problem with that is the buyer might not be offering what the domain is actually worth, and if they're not, there may be another buyer who will come along and offer the right price.

I've had quite a few domains where people have made a low £xx offer and then come back with a £10 higher offer thinking that is a clincher, does that mean that is what the domain is worth? The same person then increased their offer to £2xx and then offered £6xx, or does that mean that is what the domain is worth?

I wasn't going to sell it to them at any price purely because of their initial low ball offers, had they came in with the better £6xx offer straight away, I would have given a BIN price of what I wanted for it and we might have met in the middle.

A domain cannot be "worth" what a seller is willing to sell it for, as the seller valuation could be totally unrealistic, and therefore a transaction can never happen, and in reality, the domain is not worth what the seller wanted.

The exact oposite of what you said can also be true. Of course a domain can be worth what a seller is selling it for, it doesn't mean the seller has overpriced, it could be that the buyer is being totally unrealistic with their low offers, as we know buyers like to get domains for as little as possible, especially on sites like this, both cases are seen daily on here and other sites where names are offered.

My opinion is there must be a real offer made for a domain to be "worth" something.

If someone owns a domain which has never received an offer, does that then mean it's worthless?

 

[accelerator]

All I'm trying to say is that a real offer must be made for a domain to be worth something at a given point in time. It's up to the seller whether they accept or ask for more. The domain could be worth more, but there is no real value until there's a real offer from someone in my view.

Rgds

 

[Bailey]

'Negotiating Skills' are almost an art in any field - domains are no different. There's never going to be a 'one size fits all'

It takes work to be able to get yourself into a potential buyers mindset. (which is just step one) And each sale is unique. I do find it somewhat disappointing that as individuals we sometimes invest in domains without a thought for either an exit strategy or the skill-set to make them a viable investment, whether that be development or pure domain selling.

 

[domainseller200]

Hi Frank, you are no stranger to selling good domains for a good price. Do you just pick a price that you would be happy to sell for and stick to that? Also, when you have a price in mind, what information do you give to the potential buyer to backup your valuation? Or do you just say "this is how much I want for it" ? i.e. whats your sales pitch/spiel to convince the buyer that the domain is worth what your asking?

Hi Mark

There is no 'one cap fits all' method really.

I don't give anything to back up my valuation. If you need to 'sell' a domain or convince someone that it is worth the money then either :

A. the name isn't very good or worth your asking price (eg wanting to sell holidays2013.me.uk for £100k)
B. the person doesn't understand the value of the domain anyway (eg someone wanting holidays.co.uk for £500)
C. both

My view and method of selling with probably be somewhat different to others though as I have bought 99% of my names on the aftermarket, so I haven't paid reg fee for the name or caught it. This naturally affects my sales path and how much I will sell something for due to me having a rough valuation of what I would 'personally' like to sell it for at some stage in the future as this will be already researched / thought about at the time of me buying the name and for this reason I truly believe it plays a big part in why I manage to sell lots of names over some others.

You have to have a good knowledge of certain markets and industries when selling domains in my opinion (especially when buying them to sell onwards) and it is no different to any other market, except you don't have a benchmark to compare against and you are then using your own knowledge and intuition to make it work.

There are some pointers in a blog post I done last month which will explain in other ways how I personally 'value' names and what I do etc. The link is here

I always price my names fairly and not stupidly and it has worked very well for me so far - the domain has to be worthwhile selling but also a good deal to the buyer also (same as when you buy a car from a garage mentality) if everone is happy then a good deal has been done.

Remember a good domain will always sell itself, and as long as you are happy with the price you sell it for that all that matters.

 

[Sound]

Remember a good domain will always sell itself, and as long as you are happy with the price you sell it for that all that matters.

The above is all you really need to know. Only you have to be happy with the price you sell it for.

 

[domainseller200]

The above is all you really need to know. Only you have to be happy with the price you sell it for.

Exactly what I mean see my post from yesterday http://www.acorndomains.co.uk/433181-post6.html

 

[websaway]

It is worth whatever you are happy to sell it for. Nothing else matters regardless of the domain name in question.

Your answer simply raises the equivalent question of what should he be happy to sell it for.

So not quite that simple.

 

[markb]

Your answer simply raises the equivalent question of what should he be happy to sell it for.

So not quite that simple.

I think this would all depend on how wealthy the person is that is selling the domain. If you where a multi-millionaire and a company offered you £150,000 for your premium domain, you would say no. If you where earning £40,000 a year and the company offered you £150,000, you would be more tempted to sell.

 

[domainseller200]

Your answer simply raises the equivalent question of what should he be happy to sell it for.

So not quite that simple.

Yes but only he can answer that question as he will have his own agenda and reasons for selling the domain. It is no different to someone asking how much he should sell his car for without knowing the exact car or his personal reasons for selling the car in the first place.

It is impossible to give a more accurate answer without knowing more details about the car in question or the cirumstances in which he is trying to sell it.

 

[websaway]

Yes but only he can answer that question as he will have his own agenda and reasons for selling the domain. It is no different to someone asking how much he should sell his car for without knowing the exact car or his personal reasons for selling the car in the first place.

It is impossible to give a more accurate answer without knowing more details about the car in question or the cirumstances in which he is trying to sell it.

Yes I do agree with everything you say but to establish what he would be happy with he would have to ask what is it worth.
Can't use the car thing because we have glass's guide to car values.

Not disagreeing with you on this it just shows how subjective domain values are.
No simple way to value them.