04 March, 2009

Buy My Domain, Episode 1

A few years back, I registered two domain names for a side business and wound up using only one of them. Instead of letting the other name go, I decided to try and sell it. This is the tale of how I priced it up, sold it, and saw what the buyer did with his investment. It’s a convoluted tale, and it’s going to take several blogs to tell. But stick around: There are dollar signs and a bit of a chuckle at the end of it.

To begin at the beginning: I registered a domain for $15 at Directnic.com, transferred it the following year to Godaddy.com for $7, and sat on it for six months. Then I asked myself the question: Where can you sell domain names? A couple of years ago when this story began, the obvious choices were Afternic and Godaddy’s Domain Name Aftermarket (which is now called GoDaddy Auctions). They're still the obvious choices.

A quick look at these venerable domain aftermarket sites taught me two things:

1. People do buy second hand domains
2. People who sell them ask ridiculous prices for them, and seldom get them.

Something about TDNAM.com appealed to me: It had buyers. They were actually paying a couple of hundred bucks apiece for such names such as coffeefair.com, endsuffering.com, and my personal favorite, kungfujesus.com. My domain wasn’t quite as catchy, but it was short and businesslike and well-suited to a real moneymaking market. So I thought it stood a chance of making a modest profit.

To make sure I didn’t price myself out of the market, I needed to set a fair price, and that was the problem: What's a fair pirce? Luckily, most domain name aftermarket venues charge a small fee to analyze a domain name and figure out what the market will bear for such a name. I paid five bucks to get an automated appraisal from TDNAM.com, which shared some good news: This site (a GoDaddy property, remember) reckoned from a superficial analysis that the domain could fetch somewhere between $722.00 and $2,094 on the open market.

But how realistic is that figure? TDNAM.com didn't really explain their calculations--and the range was huge--so those figures could have been plucked out of thin air. However, TDNAM did offer a higher-end "seal of approval" appraisal for $14.95. This certified appraisal gives you the right to flag any domain you sell in their marketplace so that prospective buyers can see the appraised value.

The news wasn't as good this time around. The appraised value of my precious cargo was now $622 to $1,617--a C-note off the low end and almost a grand off the high end.

But at least it gave me a access to their appraisal methods--and these are valuable to anyone who wants to speculate in the domain name market. In a nutshell, these are the important factors:

Short domain names sell well; names with numbers, letters, and hyphens do not.

Words that are in vogue help jack up the price of a domain; generic names less so.

A dot-com domain will sell better than any other extension, such as .net, .org, or .biz.

And that's about it. The rest is in the details.

So there I was with a domain in my portfolio appraised between $622 and $1,617, ready to bring it to market. The question: When the gavel dropped, would it fetch anything near the appraised value?


My price tag so far:
$22 in registration fees; $19.95 in appraisal fees
$41.95 total

Sites mentioned in this article:


Tdnam.com-now Auctions.godaddy.com

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