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What is accurate pricing anyways? I touched a little on the subject in part I, where I stated “the initiative for accurate pricing should be on the seller and the seller only”. But how do you educate sellers to price correctly? A step further, how do you educate two professionals to price correctly? By listing an item in a live/event/vibrant auction marketplace it cost the auction house time, money, and energy, whether the domain sells or not. In order to protect the auction house as well as serve the needs of buyers, those costs should be passed to the seller. Newspapers have done it well with classified ads. They sell the space in their publications and if you sell or not is up to you, it is not their concern. If you do not sell you have costs involved (advertising). There is a point in time when you will either reduce the price in order to move inventory or stop listing. In short, to do this right there needs to be an accountability system. In the case above, this sort of accountability system forces you to react to the marketplace or go elsewhere. Continue listing forever with paid classifieds without conversions is simply not an option.
Newspapers are old media and they were made long before the times we live in today. Technology changed the format and delivery however technology did not change fundamentals, the dynamics that needs to be preserved in business. Break those dynamics and you have a broken system. The domain industry is a niche industry where addressing its needs is a complete different ballgame than addressing the needs of Main street, where items such as iPhones and laptops are sold in quantities. Our industry is closer to the collectibles industries, rarity industries. Our industry is extremely young, built on intangible assets, hard to price. Value to buyers and end users is always in the eye of the beholder. As with collectibles you need a buyer which is ready, willing, and able. As with rare items, if you bore your potential buyer long enough by marketing to him items he has no interest in whatsoever he will walk away and spend his time elsewhere, where he can find deals. For these professionals, as well as the the domain professionals, spending their time wisely is essential. I explained yesterday to a close friend of mine that I rarely participate in auctions at the few major auction houses in the domain space. I do like those companies and there are steals to be found (no doubt about that) but going through millions of names, making hundreds of offers to find one deal is just not using my time efficiently. I want to participate in a place where sellers are motivated to sell, where deals are abundant and are likely to be found. NameJet, Snapnames provide that sort of excitement however their systems only work well with expired domains, as these are auctioned off for low opening bids and no reserves, no matter what the inventory is. When it comes to the secondary market though, with these systems and others, there is still no accountability.
In the secondary market, if sellers are not motivated to sell, for professional traders, there’s no reason to buy. Professionals are unattached to the deal, they know there are others. Their business is domains, not one specific domain. When sellers are motivated, when there is accountability and pressure on sellers to price accordinally, it is when we will finally see real liquidity in our marketplace.
Have a great day,
Sahar
Following the model of newspapers and classifieds should not only bring the number of domains down to a more manageable level, it should also save the sellers a good deal of money by eliminating the commission model.
After all, if you sell your car using a classified ad, you don’t pay a commission to the newspaper IF you sell your car.
On the other hand, if a broker wanted to use a model of charging Both a listing fee And a commission, that would be expensive. So, the sellers would need to limit submissions to much higher quality domains in order for it to be worthwhile.
Perhaps this is a time in the domain industry where all auctions must be liquidation or clearance sales. Maybe that is currently all the market will bear. Maybe sellers who have hopes of getting end user prices for their domains will need to make the decision to stay away from the auctions as a means of selling. And, maybe…just maybe, someday there will be domain auctions with end users.
“But how do you educate sellers to price correctly? A step further, how do you educate two professionals to price correctly?”
You can’t, there’s no such thing as accurate pricing when it comes to selling or buying domains, just like its impossible to have an accurate appraisal.
I just contacted an enduser to try and sell MalagaVillas.com for $3,000 which, to me - is priced dirt cheap, the end-user sells villas (in malaga) that cost $300,000 and in this current climate I would have thought they need every help they can get.(The area is also very popular for villa rentals.)
…their reply, if it was $300 we’d be interested.
Beauty really is in the eye of the beholder to both seller and buyer..nothing more.
Only when both expectations are similar will a sale happen…its just hit or miss
ps - Congrats on that $100,000 hyphen domain sale Sahar - sweeet !
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Gazzip,
That “End User” did you a favor of sorts. Now you have a bottom dollar number of $300.00.
Why not get that one off Sedo parking and build it out some. And put some ads on it after the build out (or during if you can build it fairly fast). Become the “guy to see” on Malaga Villas then figure out when the sales season starts in Malaga for those Villas and offer it again for twice the original price or 10x annual net (which ever is higher).
Lots of pictures, local info, and a map! And then pack it full of Villas for sale there maybe. Or just make it about all the nice villas in Malaga with an ad at the top and another down the side of the page.
I’m sure it could be great for developing Jeff but I have others that interest me far more, this one does not make it on my developing hit list..as long as it keeps making reg fee I will just keep it.
I fired off a couple more emails so we’ll see if it gets any interest
Thanks for the suggestions though.
Gazzip, I think that is an awful attitude to approach a buyer with. Instead of wasting your time and buyers time on a measly $3000. Why not spend the time and maybe a $500 on a website that is better than his current one, and shows the potential buyer\seller what his great properties could look like, could be marketed like, which would sell his properties faster. In fact I would rank the site into #1 position in google, and start looping the leads it generates to the top villa rental places in malaga, which might ignite a bidding war for your domain (if in fact it generates leads, which you claim it would) Unless you do that, all you have is cheap talk as leverage, and that is not a great position to be in when you are selling anything.
“I’m not sure it would be great for developing” if that is what you are thinking, you can bet chances are high, that is exactly what the buyer is thinking as well.
Unfortunately most domainers, have the “make me an offer attitude” which is just a bad attitude to have in any business.
If you want to sell your domains, you have to sell more than the domain itself, because domain by themselves are just ideas and if great ideas is all you have, then you have nothing!! and people know that, the people with money, your end-users are not stupid.