When it comes to buying and selling domain names, there are some fundamentals that have always guided me over the years.
Several years before I started this blog, I used to own DNTrade (which is a forum for anything to do with domains). As I do now, I used to write many articles there.
I thought it might be useful to recap some of these over the next couple of weeks (for both newbies and oldies alike).
Cyber Property / Values – July 2012
This is the link to the original thread – and below is a summary of the article.
A good friend of mine is Ed Keay-Smith from OzDomainer , and in the past he has interviewed some of the most well-known and successful people in the domain business. We’ve often talked about how best to describe cyber property (domains and websites) – and consequently how to optimally value them.
Ed told me that one of the best explanations and analogies he ever heard was when he interviewed Andrew Miller from InternetRealEstate.com. Andrew and his partner Mike (Zappy) Zapolin own (and have owned) some of the best generic domains there are to own. Names like Beer.com; CreditCards.com; Music.com; Chocolate.com and Phone.com – and many others.
So if anyone knows how to value cyber property, it is these guys.
I had a listen to the interview that Ed did with Andrew, and I recommend others do to. I love listening to successful people sharing ideas and visions. I am going to highlight two sections below.
- A lot of “domainers” (not all) value domains they make offers on based on traffic and CPC (cost per click). He totally disagrees with this approach. He and Zappy have never ever sold a domain based on traffic and CPC / PPC. They even refuse to quote any stats.
- Their buyer is a domain developer or enduser who understands that the value to them is not some parked page that a domainer has done nothing with – but rather what they can do with it.
I’m paraphrasing, but basically he said:
“Imagine if you had the opportunity to own a big chunk of prime vacant commercial land in Madison Avenue, New York. If a hot dog seller wanted to set up his stand on that land, it would only be worth so much to him. But if someone like Barneys (famous department store) came along and saw the same land, and worked out that they could cover the whole site with a 4 storey department store, that piece of land would be worth a whole lot more to them”.
He describes it better than I can – if you don’t want to listen to the whole interview, you can fast forward to 12 minutes 15 seconds.
Conclusion:
- While “search traffic” may be gratifying, look beyond this if you can. Have a vision. Both as a buyer and a seller.
- Increase the value of your assets – don’t just have a parking lot – build something!
P.S. Ed also did an interview with Zappy Zapolin that is worth listening to.
Any comments or thoughts?
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