All investors want to get the best price for their domain name, but often we just see a bunch of low offers, nothing substantial. We look at domain sales sites and see that names similar to ours are worth much more than the offers we are seeing for our domain name. We wonder why? Why do other people get higher amounts for the same type of name? Well, I’ll tell you why and give you some tips on how to maximize the value of your asset.
Shortage
We all know that scarcity drives domain name value. How many articles have you read talking about “There are only 676 2 letter.com domain names, and there are 17,576 3 letter.com domain names, and so on…” It is well known that scarcity creates value, so, How to personally take advantage of scarcity?
Tip #1: Privacy Protection
Privacy protection can be purchased from your registrar for your domain name. The cost is typically around $3 per year. Most experienced domain investors already know this, but putting privacy protection on your domain name will actually increase the value by 10-30%. How is this you ask? Shortage! Domain investors often search for cheap domain names by emailing domain owners who do not have privacy protection on their domain assets, because their contact information is public knowledge. These domain names are often viewed by investors as names that can be obtained relatively easily and at any time. When you remove your contact information from the public sphere, no one can contact you to ask about the name, making it instantly rarer. You ask “OK, well, how do I sell my name if no one can contact me to acquire it?” This brings us to the next point.
visibility
Investors must see that your domain name is available for purchase for a sale to occur. The more investors want to own your name, the more the value of your asset will increase. If your name is not visible, one will know that you are available. So “how do I keep my domain name scarce but at the same time maximize the visibility of my asset in the domain investor market?”
Tip #2: Get professional help
Aftermarket websites and/or industry professionals on average charge higher prices for domain names. Why is this what you ask? Because they have access to large networks of buyers and have a lot of investor traffic on their websites. They understand the market intimately, they know the prices that investors pay in each domain category. Professionals can guide you through the investor market and give you insider information on market trends and the best deals. “Okay, well, there are tons of brokerage and aftermarket auction sites out there. How do I choose the right one for me?”
Understand your investment audience
It is important to know what types of investors are buying domain names in the same category as your domain name. If you own a short numeric domain name, then you know that the buyer you are looking for is probably Chinese. However, if you own a single-word English domain name, your best bet is to find a buyer in an English-speaking country. Some names derive their value almost exclusively from investment potential, while others have more value to end users. Many domain names intersect in the western and eastern domain markets and in the investor/end-user markets, but understanding where your specific domain name fits in is essential. So you’ve decided to seek professional help and you have an idea of the segment that your domain will have the highest value, now what?
Tip #3: Find the right partner
Find a broker or after-sales service that meets your needs. You want to find a service that specializes in providing visibility to the right types of investors for your specific domain name. Each type of service has its advantages and disadvantages.
First, we will discuss aftermarket sites. Most aftermarket services are broad and tend to have the largest audiences as well. Places like Namejet, 4.cn, Sedo, Afternic, Flippa, etc. they have a high amount of traffic, so you can take advantage of the large number of investors who come to the site. Most of them have options to auction your domain name, which puts investors in a position where they have to bid to get the right to buy your asset. The challenge with using these services is that they have so many domain names for sale that your name can get lost in the system. They don’t provide a personal touch to help guide you in selling your name. They are also passive services, so no one is approaching specific buyers who might be interested on your behalf, the investor would just have to stumble across your name to see it. These services tend to be more expensive (typically around 15% of the fee) than other options. Lastly, if your name doesn’t sell, the public can see the highest bid for your domain name and that price will be set in the minds of investors when you try to sell your domain name at a later date.
The second option is to hire a broker. Brokers actively approach buyers they know personally who are interested in their specific type of domain name. They can provide a personal touch, such as evaluating your name, and help determine which investment market to target to attract the most interest. Unlike auctions, if your name doesn’t sell, they don’t reveal the highest bid so your name’s value isn’t fixed in the eyes of the market. Brokers tend to deal with a smaller portfolio, so their name stands out more prominently. They tend to be less expensive than aftermarket sites (they usually charge around 10%, but most brokers are willing to negotiate fees based on name and relationship). The challenges when dealing with a broker is that their network of buyers and the traffic to their websites tend to be much less than that for aftermarket services.
So there you have it, if you want to maximize the value of your domain name, then you want to find the right mix of creating scarcity, increasing visibility, and understanding your investing audience. With these quick and easy tips, you can expect to see a significant increase in quality offers for your domain name and get the most out of your asset. Have a great day and best of luck!