Pricing Your Domains: Part 1 – Comparable Sales

Welcome to the first in my three-part series on pricing your domains! This series is geared towards new Domainers so if you’ve been doing this for a while you can skip this series as it will probably be a lot of review. This series was inspired by many new Domainers that have emailed me in a state of anger and confusion.

Why are they angry and confused? They registered hundreds or thousands of domains – tried to sell each for thousands of dollars and haven’t sold a single one! This creates bitterness towards the industry and at least ten times a week I get emails from people saying “it’s not fair – all the good domains are taken!”

First let’s be clear – “all the good domains are NOT taken!” That being said if you don’t understand how much your domains are worth, you may register terrible names and get discouraged when nobody wants to buy them for thousands of dollars. This is why, as with any investment, you must do your homework BEFORE buying a domain. Do you think real estate investors just buy a house thinking that they can re-sell it for 2x or 3x what they paid for it no matter what? No! However many people getting started with Domaining are expecting 100x returns or greater on a name they find “catchy” – it doesn’t make sense!

Before you buy a domain name you should have an understanding of what similar domains have sold for. It’s like visiting the neighborhood where you want to buy a house and looking-into the price of your neighbor’s homes. If your neighbors all paid $500,000 for their homes – buying a house and re-selling it for 20 million is probably unlikely. Well if this is unlikely then why are you expecting the domain you registered for $10 to sell for $5,000???

The first step in determining the price of a domain is looking at the price that similar domains have sold for. How can you do this? There are only two sites you need in your arsenal: DNJournal and NameBio.

DNJournal should be the first place you look. This has the latest domain sales and you can easily see what is selling right now, and what prices they sold for. You’ll want to find at least three comparable sales – domains that if you showed them to an end-user they would say – “wow that domain that sold for $xxxx is almost the same as yours!”

Next you can go-over to NameBio and type in the keywords in your domain to find even more comparable sales. Remember – you want to use recent sales as this will be the most accurate for the current market conditions.

In the end you should have a list of at least three domains that are comparable to yours. Like I said, comparable means that if you show the other domains to an end-users they will easily see that yours is just like the other three!

Now remember, this is only part one so we’re only one third of the way there. Stay tuned for the next two parts of the series!

{ 2 comments… add one }

  • Leonard Britt October 24, 2009, 10:15 am

    Actually DNJournal is probably misleading because by default it only reports the very high-end sales which aren’t typical. And even though it is not the norm, there are so-so domains which will attract a buyer willing to pay xxxx and thus get reported at DNJ. So newbie domainers are misled into believing that so-so domains can attract such offers. Another thing that is often overlooked by new domainers is that most of those higher-priced sales are .COMs and yet many domainers still spend a lot of time registering alternative extension domains and then pricing them as though they were .COMs.

    Reply
    • Morgan October 24, 2009, 10:20 am

      Thanks for your comment Leonard! Actually DNJournal has an entire section for ccTLD sales. Thus if someone buys a ccTLD this would be the place to look. Also at the bottom of the sales list they have domains selling in the $1,000-$3,000 range as well as the Global Contenders that shows non .com sales.

      I do agree that it is absolutely essential that people look at the TLD when pricing the domain. That being said you just gave-away my topic for part 2 🙂

      Reply

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