Ohashi.US Domain Name Resource
Introduction to Domain Name Reselling - Page 3
Selling Domain Names
Selling domain names is one of the most difficult things for most people to
do. Often too much personal value gets attached and prices asked reflect it.
One thing to remember is there are generally two ways to evaluate the worth
of a domain name. The first is based on revenue and multiples of it. Domain
names with revenue are purchased normally between 1-5 years worth of revenue
with adjustments for risk and direction of revenue stream (increasing or decreasing)
and related market expectations. The second method of valuation is less defined,
price is determined by an arbitrary value perhaps based around potential which
the seller thinks he can get and a buyer agrees to pay. This is the category
into which most end-user sales fall. What motivates these sales is hard to define,
it varies a lot from case to case and the buyer. Perhaps they own the same name
in another extension, want to name their new product, and there are many other
possibilities. There is considerably less liquidity with the second method of
valuation. The reseller or 'domainer' market purchases domain names at a much
lower price but this comes with increased liquidity.
The reseller markets are often centered around forums such as DomainState(http://www.DomainState.com),
DNForum(http://www.dnforum.com) and WebHostingTalk (http://www.webhostingtalk.com)
to name a few. Putting domains for sale on such forums as these can often result
in offers within minutes as long as the prices are reasonable; these aren't
places where you are trying to locate end-user buyers. They offer cash a lot
quicker so if you need to cash out quickly or want to work on small margins,
these are great starting points.
The end-user market is a bit less defined, there are many articles written on
the topic of finding, approaching and selling to end-users. One of the other
ways to get noticed is using large listing sites such as Sedo(http://ww.sedo.com)
and AfterNic(http://www.afternic.com). Many of the big sales take place at such
markets and they attract some deep pocketed buyers. One suggestion is setting
a minimum offer because they are also used by resellers trying to find a bargain
and there is a constant flow of minimum offers. The easiest way to advertise
your domain name for sale is to write a for sale announcement on your website.
Many parking services allow you to list the name for sale which is a great way
to let visitors to the site know it is for sale while earning revenue on the
visitors going there.
As you've read this article you may have noticed it has been left very open-ended.
That is completely intentional, the best way to get serious about this business
is learning hands-on. Try your own techniques, test your theories for selling
domain names, find what works for you and go with it. There are so many niches
in the industry and probably many more that aren't discovered yet, you just
need to find your own. Lastly, keep reality in check, don't invest more than
you're willing to lose and know when to quit.