How do you price your .ca domains? (2 Viewing)

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Wanted to get insight from the pros here on how domain name pricing is done.

What would your price be if:
1. You hand registered it
2. You won it from an auction
3. You bought it from another domainer

Is there a floor price that you’d set or is there a multiplier for the money you spent on it? And how do you avoid overpricing it?

Any info would be much appreciated. Thanks!
 
1. Hand reg 1-3k
2. Auction - Usually try to get 5k
3. I spend a lot on domains so for me that price has no ceiling and is highly dependent on who is buying the domain.

For point #3, don't sell a premium domains unless mapledots.ca/inquiry is filled out.
I will set the selling price based on the net value of the company and I am not afraid to ask 10% of the .com value for a one word.
 
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I will set the selling price based on the net value of the company and I am not afraid to ask 10% of the .com value for a one word.
Would you say the .com value is based on previous sales reported on Namebio? And if not previously sold, is GoDaddy valuator reliable?

Thanks for the info @MapleDots! Those are very helpful. Sorry, I did not know how to insert a line/space on top of a quoted message, so the thank you came last.
 
Would you say the .com value is based on previous sales reported on Namebio? And if not previously sold, is GoDaddy valuator reliable?

No they are totally unreliable when it comes to valuing one word domains.
I base it on my experience and what other similar one word .com's have sold for.

So for my domain pink.ca I would check to see what pink.com sold for and shoot for 10%.

That is only the beginning though because you have to factor in that domains are getting more valuable every year and if pink.com sold 3 years ago I would still have to consider the inflationary aspect by comparing it to sales of other colours that are more current.

Then lastly if I am dealing with a billion dollar LLC company then all cards are off the table, I might involve someone like @MaiTaiMan (Bill Sweetman) of Name Ninja to see how I can maximize my profit.
 
First off, how I bought it really has nothing to do with how I price it. Don't let the fact that you paid $11 for a domain and someone offers you 100x entice you on a rate of return level when you could get 500x or 1000x. And on the flip side, if you overpaid for something and now you realize the domain isn't as useful or popular as you thought, don't let that sway you from accepting a smaller profit either.

I price it based on a variety of factors including popularity of the term, length, ease of spelling, memorability, comparative sales data, etc. Any comparative data I can find is useful.

And personally, unless its a junk domain you're trying to liquidate since you're not going to renew it, price everything at at least $2500 at the lowest end. Even the smallest business should be able to justify that much (IMO), if not, they probably shouldn't be in business. Try and get a down payment and let them make payments before you negotiate down on the price too, unless its just a small token 10% discount or something.

You want to sell to businesses, not hobbyists or for personal use. Think about all the expenses a business incurs, a domain name, their brand name, is arguably one of the most important aspects. Price it like that. Its just a one-time expense after all. Compare that to how expensive office rental is, vehicle leases, equipment leases such as servers, phone lines, internet, etc.

Shaw Business Internet plans are from $115 to $195 per month. That's $1380 to $2340 per year. Just for an internet connection. Their domain & brand should be worth MUCH more than that, no?

Those free valuations are entertaining to look at, but when I compare the GoDaddy valuation on my sold domains to the actual prices sold, they are way low. I find that the Graen.com or Saw.com valuations are more comparable to my actual sales. But even then, sometimes those are also way low.
 
Thanks for the detailed response @rlm. 👍🏼

You want to sell to businesses, not hobbyists or for personal use. Think
I think this should be the mindset of every domainer to guarantee a good ROI. And having a potential buyer fill out an inquiry form like what @MapleDots suggested separates the personal users from businesses.
 
@rlm great response and yes you are right but sticking to the op's question there is merit to the fact that most hand registrations at this point in time are ok registrations at best.

The ones I buy from GoDaddy auction are purpose bought and will be priced higher.

If I buy a domain from another domainer it usually means I paid a fair bit and I really wanted the domain so it will command a higher resale for me.

You cannot buy a quality domain like the ones we had in the past unless you part with a fair piece of change so the retail price will be reflective of that.
 
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@rlm great response and yes you are right but sticking to the op's question there is merit to the fact that most hand registrations at this point in time are ok registrations at best.

The ones I buy from GoDaddy auction are purpose bought and will be priced higher.

If I buy a domain from another domainer it usually means I paid a fair bit and I really wanted the domain so it will command a higher resale for me.

You cannot buy a quality domain like the ones we had in the past unless you part with a fair piece of change so the retail price will be reflective of that.
Well, that is true in general, you're not going to get great hand regs unless its a new trendy term. However, anyone collecting domains for a long time has hand-registrations from 10 or 20 years ago. And they're still hand regs - just not new hand regs. If you want to compare your investment to your return, you'll need to properly account for all your carrying costs over the years too.

The reality of it is, if you paid $10K for a great domain, its WAY harder to get 100x return on it than it is to get 100x return on a $20 or $50 TBR domain. So when pricing domains, I don't really think about what the % return is. My investment is my investment, the selling price is the selling price, they shouldn't be linked. You're making a generalization, which is fine, but I wouldn't use that as a rule to price anything.

If anything, if you really want to use rate of return as a factor to influence your business decisions, then before you ever buy any particular domain, you should consider what your asking price will be first, then apply your desired rate of return, and then calculate your maximum permissible purchase price - and then not go over it.

I consider return data like 10x or 100x or 1000x and I think cool, that's an interesting fact AFTER you've sold it. But I don't think it should really have much to do with your selling price... Sometimes you've got a dud and have to come to terms with that and just sell it. Sometimes you've got a gem and you need to shoot for maximum value, not a rate of return.

And on the valuations topic, I just reviewed my last year of sales data. Here are some interesting numbers to ponder:
  • GoDaddy valuations came in at less than 24% of my actual sales prices.
  • Average return for all sold domains (including purchase + renewals) was 93x.
  • Had I sold at GoDaddy prices it would have only been a return of 22x.
  • My highest return was 633x on a hand reg that I held for only 8 months, lol. So much for the no good hand regs left theory!
  • The max hold time for a sold domain was 18 years.
  • 20% of sales had a hold time of less than 1 year.
  • Sales were fairly equally split between 4 general categories of domains.
Now, keep in mind that when I say average return on investment, that was for a single domain transaction. Its kind of a useless number. You really need to account for the expense of renewing the entire portfolio every year to give it any real meaning.

The big takeaway is that if I had I sold at Godaddy valuations, it would have lopped off all of my profits once I add in portfolio carrying costs. So consider Godaddy valuations as liquidation prices. Those prices aren't really high enough to sustain a business, IMO.

For me, a big factor is that with having a large portfolio, I can price relatively high, stubbornly negotiate very little, and still make plenty of money despite a very low sell-through rate compared to the so called industry average numbers people throw around. And even at a sell through rate of 1.5%, I'd still have 2/3 of my portfolio when I'm 80. If I was smarter, I'd quit buying altogether, focus on selling only, and be more willing to negotiate to increase sell through rate significantly, diversify my investments with excess profits, and then die with a lot fewer domains and instead have more liquid assets to pass on. To be honest, I'm getting to that age where I think it may be smart to start doing that. The lack of liquidity means time isn't really on our side for us older guys... And assuming our heirs will appreciate a portfolio of domains as much as we do is probably more wishful thinking than reality.
 
And assuming our heirs will appreciate a portfolio of domains as much as we do is probably more wishful thinking than reality.
Well said @rlm and this is so true.
 
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And even at a sell through rate of 1.5%, I'd still have 2/3 of my portfolio when I'm 80. If I was smarter, I'd quit buying altogether, focus on selling only, and be more willing to negotiate to increase sell through rate significantly, diversify my investments with excess profits, and then die with a lot fewer domains and instead have more liquid assets to pass on.
I can understand what you mean @rlm . I am starting to think the same way.

To be honest, I'm getting to that age where I think it may be smart to start doing that. The lack of liquidity means time isn't really on our side for us older guys...
How much I wish I could do this. But TBR has become an addiction. I have always been at EVERY TBR since it originated and never failed to pick a few up on every drop. The debate is on whether I should carry on that habit or quit. I like to quit, but my wife keeps me going at it saying "what you are engaged in is not harming you, your health or others like if you are smoking or driving impaired" which keeps me motivated.
And assuming our heirs will appreciate a portfolio of domains as much as we do is probably more wishful thinking than reality.
Even with adult children, it's a hard call, but harder still if one has a younger family. Hoping that all three of our children would one day be part of this great business that has helped us along the way for many many years.
 
My highest return was 633x on a hand reg that I held for only 8 months, lol. So much for the no good hand regs left theory!
This is inspiring. I’ve only started domaining last Jan and try to avoid hand regging as much as possible. Even the auction prices can blow through your funds if one is not careful. To be honest, I even question myself if I made a good decision spending money on auctions when I haven’t made my first sale yet. And that’s probably the reason why I only participate in auctions for domains that I personally want — so I can develop them if all else fails.

Thank you so much for your responses. I know I have a long way to go so I’ll just be patient. Hearing your thoughts on this serve as a great motivation to new domainers like me.
 
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Make sure you check in regularly to Domaining.com and read the interesting domain blogs that catch your attention, often there are reported domain sales and points about domain selling and buying.

Also check the weekly DNJournal.com domain sales report, and you can go back in history to see years of actual domain sales they have archived there. Often I'm surprised how much some names sold for, and also how little some names sold for. You can also see trends in sales, like today a lot of the bigger domain sales are often crypto/blockchain/meta related companies.

Domaining for me has been a 22 yr side business to bring in extra cash on top of my day job, though I've never gone aggressively into competing in .com drop auctions and making big bets on single names. I've mostly done hand regs and picked up TBR drops over this time. I don't think I've ever spent more than $500 or $1000 on a single domain. This is just what I've done, there are so many ways to go about this business and you have to find what works for you.

An easy test is to look at what you've spent on domains in a year, minus what you've earned on sales and parking. I've had some breakeven years and even years of slight loss, but also years that more than made up for it. Domaining is an easy in, easy out business, if things get tight you can always acquire less names or let names drop to conserve cash, and keep going with your best names til things improve. One or two big sales can change everything, likewise if you're losing money year after year then its time to take a hard look.

One of the things I like about domaining is that you can use your own creativity and intuitiveness, be the first to register domains based on new trends you're seeing before anyone else, see value in a domain where others might not, take a gamble on an extension that may become popular (.xyz anyone?), etc, so your own ability and time invested can be your advantage over others. It's what you make of it and what you're willing to put into it.
 
Make sure you check in regularly to Domaining.com and read the interesting domain blogs that catch your attention, often there are reported domain sales and points about domain selling and buying.

Also check the weekly DNJournal.com domain sales report, and you can go back in history to see years of actual domain sales they have archived there.
First time I’m hearing about those sites. I’ll definitely check them out. Thanks for your input and great recommendation. 👍🏼
 

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