Most people have no idea that domain names sell for six and seven figures all the time

Million dollar domains

No matter what industry you’re in, it can be easy to forget that people who aren’t in the same industry as you, don’t know some of the foundational things that you know. This is especially true in the domain name world where most people don’t even know there’s an industry with conferences around the world that continues to grow and thrive long after the so-called “.COM bust in the early 2000’s.”

One of the things that I always find interesting is the disconnect many people have with the value of premium one-word .COMs. Just to be clear about what I’m talking about, I mean domains like California.com which sold for $3M earlier this year or Ice.com which sold for $3.5M lasts year.

At the same time, six-figure sales happen weekly, and in some weeks they happen multiple times or even daily. Heck, a few days ago Free.games, a non .COM in a domain extension that most people have ever heard of (.GAMES) sold for $335,000.

While you and I see six and seven figure sales happen all the time, most people don’t, and they don’t even believe it’s happening. If you’ve ever had the chance to field inbounds on a seven figure domain, you’ll really know what I’m talking about. Monster domains, that you find yourself turning down $500,000 offers on also get $500 and $1,000 offers from buyers that honestly think that $1,000 will seal the deal.

Trying to explain to someone with an $1,000 budget that the domain they are interested in buying is worth seven figures, and that you turned down a half a million dollar offer yesterday is hard for them to understand. Which is why, in most cases – domain owners just ignore these offers.

The challenge is, when a domain sell for six and seven figures, it rarely gets covered in the mainstream media. Yes – all the blogs you and I know and love cover it…but let’s be honest, your average person on the street has neve read a domain blog, doesn’t realize there is such thing as a “domain industry” and therefore has no idea.

This is what makes domain investing so different from anything else that it gets compared to. People compare domain investing to real estate investing or stock investing…but it’s easy to forget that there are a ton of articles about real estate and stock investing, in just about every broad-based publication in the world, every single day.

No real estate investor would put an $1,000 offer on a three bedroom home in San Francisco, but a domain that’s worth just as much, sure they’ll do it, because they have no idea what domains actually sell for.

So what can we do as an industry? At the end of the day, I’m personally less concerned with the awareness problem and more interested in how we, as investors, respond to offers. There are really two paths you can take when someone offers you $1,000 on a $1M domain.

You can choose to ignore the offer or send a friendly email back saying, sorry but I’m looking for $1M+ for this name so I don’t think it’s a fit. Or, you can send a nasty email back to the person telling them how insulting their offer is and chastising them for not knowing how much domains cost.

I encourage every domain investor to take the high road and just realize the simple fact that most people have absolutely no idea that domain names sell for six and seven figures all the time…or even ever. So be nice, you never know what happens when you leave a door open.

{ 22 comments… add one }

  • Snoopy June 2, 2019, 9:46 pm

    The reason why most don’t know is because the the domain aftermarket is small, I’d say around $1billion per year in sales. For example Escrow.com handled about $330M in transactions over the last year.

    To compare $1billion is maybe 30% of the market size of the coin collecting market. Lets’s not even try to compare it to mainstream markets like stocks or property, that is pointless. The industry is kidding itself thinking most people should or ever will know about aftermarket domain sales.

    Regarding offers, who cares if someone is offering $1,000 on a million dollar name. Most people will value it at $1,000 or less because they don’t work or participate in the domain industry. Not worth replying either as they will never be a buyer.

    Reply
    • fizz June 2, 2019, 10:25 pm

      I agree with Snoopy that a person who offers $1K on a $1M name is not worth investing the time to educate about market value.

      Didn’t realise the coin collecting market was at that level – were you a collector Snoopy? I was, and it’s knowing that low mintages impact value that got me interested in domains, with the ultimate low mintage of one.

      Reply
      • Snoopy June 2, 2019, 10:56 pm

        Hi Fizz,

        I don’t collect coins, I was just looking at a random market that many people would know about, and looked at the size of secondary market trading in it (it is way bigger than domains). Even still many people wouldn’t know that some coins were worth millions, and if they did see that million dollar coin in a shop they’d probably value it at $5.

        Reply
  • Arafat June 2, 2019, 10:24 pm

    Hi,
    I am a new domainer from Singapore. I have some domain registered. If you buy domain to use or resell them, you can have a look on them.

    tropicalcanada.com

    unsmartness.com

    damnfuckinghot.com

    spacbdoil.com
    cbdforgym.com

    customizedsmartphone.com

    cbdyahoo.com

    alphamaleclub.us

    babydelivery.us

    Reply
    • Snoopy June 2, 2019, 10:58 pm

      You are wasting your money.

      Reply
      • matt June 3, 2019, 8:39 am

        He is trying to learn how registry works,but not how to register a good domain.LOL

        Reply
    • BullS June 2, 2019, 11:04 pm

      @Arafat..apa khabar…
      your money is better spend on nasi lemak.
      Useless domains but what the heck you will learn the hard way.
      I couldn’t care less educating the others, this domain industry is still young and domains are getting valuable each day.
      anybody still collecting stamps? ha

      Reply
    • Ben June 3, 2019, 8:44 am

      hi,
      First, you say to be in Singapore… but, if i look at the whois for 2 of your domains… “AlphaMaleClub.us” and “BabyDelivery.us”, witch are both .US extension reserved for US citizens, are registered to an address in Bangladesh. I doubt someone serious while want to do business with you.

      Reply
    • Ben June 3, 2019, 8:52 am

      HI again,

      i forgot to mention, but you are also a cybersquatter with domain such as “cbdYAHOO.com”.

      Reply
  • Andrew Hyde June 3, 2019, 4:22 am

    A lot of those million dollar deals are protected by non disclosure agreements too, and I think that hurts valuations as it goes unreported. Best policy is if you’re going to respond, a simple thank you is sufficient, but why waste time with the ridiculous offers. Serious buyers will engage differently.

    Reply
  • Mark Thorpe June 3, 2019, 7:40 am

    The popular $1000 offer for a domain name, whether it’s one-word or two-word domains, end-users and domain investors both do this.

    Reply
  • matt June 3, 2019, 8:36 am

    your domains worth ZERO,because you do n”t have good domains

    Reply
  • Jay June 3, 2019, 8:44 am

    I’ve met people that when told of the word “domain”, I need to explain, “URL”.

    Reply
  • Adam June 3, 2019, 9:00 am

    A link to the weekly sales from high to low from namebio can help people see the activity. https://namebio.com/?s==kTO0kjN3EjM

    It’s not going to change $1000 sale to $1m though.

    Reply
  • Don M June 3, 2019, 9:20 am

    Higher prices names should be placed with a broker it keeps any emotion out of it. At same time they give you exposure and will get you higher price to make up for the 10-15% commission.
    This is why people who sale a house “for sale by owner” get less money, brokers have no incentive to show that house. No one knows it’s for sale. END RESULT- less $$$

    Now If buyer wants to question you about the value of domain you own, you simply ask what are they going to do with the name and what is “LTV”-( long term value) of one client worth to them over 10 years.

    Now you have formula for numbers and value. If they can’t figure out simply math then don’t deal with them. Now if your selling garbage names then you will have to become some far worse a manipulate salesman. LOL. Great names don’t require a salesman, but they do require an awesome negotiator.

    Reply
    • Snoopy June 3, 2019, 4:40 pm

      Are you a broker?

      In my view view it is not like a house where valuations are usually fairly straightforward. Brokers usually just want to sell for whatever the best offer is over a fairly short period (eg 12 months), usually it will be closer to wholesale price than retail.

      Reply
  • John June 3, 2019, 12:50 pm

    Don’t forget the external enemies which have been doing everything they can for years to erase domain names from people’s consciousness insofar as possible.

    This is what we have need all along:

    Mainstream auction activity. Sotheby’s. Christies. Mainstream news coverage. “Hey folks – WallStreet.com is up for auction at Sotheby’s this week.”

    Sorry industry insiders, but that is what has been needed all along, not insider venues.

    Reply
    • John June 3, 2019, 12:52 pm

      And check this out:

      1. I name a business for a friend and get her set up with the domain on GoDaddy, years ago.
      2. She does well almost overnight, appears on TV news.
      3. She quickly inherits fortune from her biggest client, retires.
      4. Now that she’s rich, one day we’re talking about domain names, and she’s in shock when I mentioned how expensive some can be, and one in particular. She, now rich, says something like “Oh, I was thinking maybe $50 or something.”

      Yes, you can imagine what I was thinking.

      Reply
  • Natasha June 4, 2019, 12:51 am

    I own florists.co.nz and florists.nz and want to find out what they are worth.
    Anyone got any suggestions please

    Reply
  • Mike June 5, 2019, 1:36 pm

    May I submit that even within the domain industry, valuation perception is all over the place. I have been buying and selling domains (mostly 3 & 4 figure sales) for 2 decades and still have my mind blown by reports of sales of certain domains. Why, why, why, would some of those high prices be paid for what I perceive as low quality domains. Then, on the other hand, there are names that are sold which prompt me to think: “what a bargain!” for the buyer. Often I have to remind myself (as I remind others who are newly aware of our industry) that many domain holders have thousands, and tens of thousands of domains for sale, and only occasionally sell a few for very high dollars. Value is truly ultimately in the eye of the beholder (buyer) and to your point on higher value names, it is important to politely educate and illuminate those eyes to value the valuable ones.

    Reply
  • Changkouth Bouth June 9, 2019, 4:33 pm

    I suppose it’s just about time we all learns value of the digital assets.

    Reply
  • David J Castello June 10, 2019, 7:59 pm

    This may not apply to four or five figure deals, but we’ve noticed that if we have to explain to a potential buyer why a name is worth six or seven figures it will never sell. Every six or seven figure deal we’ve ever done was to someone who already knew the value.

    Reply

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