Increasing the Value of Your Domain Name
Every investor wants to get top dollar for their Domain Name yet oftentimes we just see a bunch of low ball offers, nothing substantial. We look at domain sales sites and see names similar to ours go for much more than the offers that we are seeing for our Domain Name. We ask ourselves, why? Why are other people getting higher amounts for the same type of name? Well, I will tell you why and give you some tips on how to maximize value for your asset.
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 common knowledge that scarcity creates value so how do you 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 seasoned domain investors already know this but if you place privacy protection on your domain name it will actually increase the value anywhere from 10-30%. How is this you ask? Scarcity! Domain investors often fish for cheap domain names by sending emails to domain owners that 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 had relatively easy and at any time. When you remove your contact information from the public sphere, no one can reach you to inquire about the name, instantly making it more scarce. You ask “OK, well how do I sell my name if no one can contact me about acquiring it?” This leads us to the next point.
Investors have to see that your domain name is available for purchase in order for a sale to happen. The more investors that desire to own your name, the more the value of your asset increases. If your name isn’t visible then know one will know that it is available. So “How do I make my domain name scarce but at the same time maximize the visibility of my asset in the domain investor market?”
Tip #2: Enlist professional help
Aftermarket websites and/or industry professionals on average command higher prices for domain names. Why is this you ask? Because they have access to large networks of buyers and have loads of investor traffic on their websites. They understand the market intimately, knowing the prices investors are paying in each domain category. Professionals can guide you through the investor market and provide inside information on market trends and top bids. “OK, well there are tons of brokerage’s and aftermarket auction sites. How do I pick the right one for me?”
Understand your Investor Audience
It is important to know what types of investors are purchasing domain names in the same category as your domain name. If you own a short numeric domain name then you know that the buyer that you are seeking is most likely Chinese. Yet if you own a single word English domain name than your best bet is to find a buyer in an English speaking country. Some names almost exclusively derive their value from investment potential while others have more value for end users. Many domain names have crossover in the Western and Eastern domain markets and the investor/end user markets but it is essential to understand where your specific domain name fits. So you have decided to enlist professional help and you have an idea of the segment your domain will command the highest value, now what?
Tip #3: Finding the Right Partner
Find a broker or an aftermarket 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 pro’s and con’s.
First, we will discuss aftermarket sites. Most aftermarket services are broad and also tend to have the largest audiences. Places like Namejet, 4.cn, Sedo, Afternic, Flippa, etc have large amounts of traffic so you can take advantage of large amounts of investors pouring into the site. Most of them have options to auction your domain name, which put investors in a position of having to bid to earn the right to purchase your asset. The challenge in using these services are, they have so many domain names for sale that your name can get lost in the system. They do not provide a personal touch to help guide you in the sale of your name. They are also passive services so no one is reaching out to specific buyers that might be interested in your name, the investor would just have to stumble upon your name in order to see it. These services tend to be more expensive (typically around 15% fee) than other options. Lastly, if your name does not sell, the public can see the highest bid on your domain name and that price will become fixed in the minds of investors when you attempt to sell your domain name at a later date.
The second option is to enlist a broker. Broker’s actively reach out to buyers that they know personally, that have interest in your specific type of domain name. They can provide a personal touch such as appraising your name and help determine what investment market should be targeted to bring in the most interest. Unlike in auction, if your name doesn’t sell they don’t disclose the highest bid so the value of your name doesn’t become fixed in the eyes of the market. Broker’s tend to be dealing with a smaller portfolio so your name is featured more prominently. They tend to be less expensive than the aftermarket sites (typically charging around 10% but most brokers are willing to negotiate fee’s depending on the 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 lower than those of 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 investor audience. Utilizing these quick and easy tips you can expect to see a significant increase in quality offers for your domain name and squeeze the most cold hard cash out of your asset. Have a great day and best of luck!