What Do Good Domain Names Sell For?

wirefarm asks: "A friend of mine has owned a good generic domain name for the better part of ten years. She and her husband have a small consulting business incorporated in that name and now a big financial company has expressed interest in their domain. It's a name in common use for hotels, bed and breakfasts, country clubs, schools, churches and probably a few towns, as well. Very generic and pleasant. Something roughly like 'hillside.com', though that's not it. Fortunately, the company is being pleasant about it and not threatening to squash them with lawyers... They've never considered selling it before and are not just trying to make a buck, but they're curious what sort of money is typically involved in this type of thing. Anyone been in this situation lately? What should they be careful about?"

Pricing and selling a domain

[NetSettler]

I haven't actually sold a domain name, but someone made me an offer on one of mine, so I looked into it a little. Here's what I (think I) know:

If you're really worried about getting too low a price, you can put the domain up for sale on eBay. That will at least cause the person bidding to not try to lowball you if the name is quite good, but you might risk that people shopping for domain names are not looking there.

On the other hand, you can put the domain up on afternic.com, which is sort of like an eBay for domain names. It even has a specific "appraisal" service that is intended to help you ask for a reasonable price from the outset. The good thing about this site seems to be that it's inhabited by people wanting to buy/sell domain names. The bad thing is that you immediately have the sense when you go there that there are LOTS of other domain names that are just as good, and so your domain name seems "less special", probably driving down the price, since many reasonable alternatives are too close at hand.

(By the way, afternic also has the advantage of having some facilities for managing the mechanics of the sale, which makes it less likely you'll botch that part. Some domain registrars have this, too. If you don't use such a facility, it's worth at least reading the instructions to make sure you understand the process.)

Just browsing either eBay or afternic.com you can get a good sense for pricing, though, that may help you, even if you don't use the forum to do the sale. (Don't direct your purchaser to do likewise, since the same knowledge might drive down the price.)

Another way of assessing the price is to ask yourself, "what would I have to pay if I were to replace my domain with one I liked just as well?" I was offered a certain sum for one of my domains, for example, but I concluded that I'd have to pay at least that sum for a replacement name I liked equally well. So I counter-proposed an amount three times the sum, an arbitrary amount that would have cleared my credit card debt. Kind of random, but I figured even if I regretted the sale I'd appreciate being out of debt... They turned me down, which suited me fine.

That's the key thing. Pick a price that makes you happy either selling or not selling.

Don't sell. Lease.

[clark625]

This is one of those times I recommend that you take a page from M$. See if this big corporate firm would be interested in leasing this domain from you. You then are the official owner of the domain, and can point the TLD at the DNS servers of their choosing. But this way you get a guaranteed income every month or year--and if you ever want the domain back you can get it.

Obviously, you will have to commit to these guys leasing the domain for some amount of time--they won't want to only be entitled to the domain for a year at a time. They also would want some amount of time to migrate from this domain if the need ever arise.

If I were a big company, I really think that $50 or $100 a month for the "priveledge" of you pointing your domain to their DNS servers would be well worth it. Besides, this way they don't have to fork out lots of cash initially and find out a year later that they may have wasted money. Here they can cancel their contract and you can go back to using the domain or lease it to someone else.

Of course, I haven't recently checked out whether or not you can legally do this. This may just be one of those "great ideas" that just happens to also be "greatly illegal". If that's the case, please disregard.

Selling names

[haplo21112]

3 years ago when I had just purchased a small internet company along with two friends, I got an Email offering $50,000 for the domain name of that company(in retrospect we should have taken it). I checking to it, and the company looked real enough, but we were not selling. We had "big plans.com" Well we went out of Business in June and I started looking at selling the domain name we originally had plus two we picked up along the way. Total bids on E-bay for all 3 $350.00. Saying the turn out was disappointing would be an understatement. I had set the reserves much higher so I still hold the names thankfully. One one persons expirence thought it might be useful.

Re:Selling names

[Tony Shepps]

Two things come to mind. One is, what a very fine allegory for the entire net boom it is, to have "bigplans.com" and to see its value drop so far and so fast; and two, you probably should have taken the $350.

is it a liabilitity?

[ameoba]

I'm just imagining an ultra-generic domain name, and it seems to me that, if your bandwidth is in any way metered, that it'd be a liability. I doubt people looking for info on a hotel are going to be in any way interested in consulting services, so it's not like a whitehouse.com thing, where accidental hits are still positive.

I guess a few things to consider might be:

- How much is the business you get through your website worth?

- How much trouble would you have to go through to let your existing customers know your new website/email addy?

- If you have any sort of reputation attached to the domain, how difficult would it be to rebuild it?

I'm sure a business student would be crunch the numbers better, but at a minimum you'd need to ask for some ammount that equaled your potential revenue from the domain compounded over the time it would take you to get a new domain to that point. I seem to remember something about "future value of money" from a class I took...

The other way to look at it is to do the same type of calculation from the buyer's perspective; how much do they stand to make off of it? Crunching the same numbers could show you how much it's really worth to them.

Some of the above posts mentioned appraisals & domain selling services, if you don't have any better sources, you might want to go through one of them. Few people sell a house without a real-estate agent.

I used to have mrbill.com

[www.sorehands.com]

Before I had sorehands.com, I had mrbill.com. I sold it for $2500 plus an official Mr Bill t-shirt. I would have won if it came to a legal battle, but why bother?

Somethings to keep in mind are issues of trademark and trademark dilution. That they came to you, offering to buy should help that. Did you build traffic to the site, and how much traffic does it generate?

Why don't you ask them for a number?

Make sure there's a transition link for YOU

[MadCow42]

I'm sure it's popped up already in your mind, but make sure that if they do sell the domain, that there's some sort of provision to provide a link to your "new" domain name (for at least 6 months), so that your customers can still find you.

I'd state a real-estate size (say, 30x300 pixels), placed at the TOP of the page, saying something like "Looking for Hillside Consultants? We've Moved to www.wearerichnow.com". This way, you don't annoy your existing customers that are accustomed to finding you at your old location.

MadCow.

Re:Make sure there's a transition link for YOU

[rizzo420]

if they won't go for the link to your new address, then make a new deal with them that says you still own the domain for 6 more months and have it be a redirect page to your new site with ample info on how to get to the new site. that way they will get the domain anyways, you get the money, and you don't get angry customers. and if they won't go for that, try 3 months still yours as a redirect, and 3 months with a link on their site. making a smooth transition will be important and you will still have angry customers who can't find it.

Get an appraiser...

[Rude Turnip]

Don't mess around with arm-chair theories on what a domain name could be worth. If you think you can get a decent price, spend a few bucks and hire a intangibles appraiser to give you a professional and unbiased value.

I'm a member of the American Society of Appraisers [appraisers.org], one of the largest and most respected multidisciplinary appraisal industry groups. If you check out their web page, you can find references for intangibles appraisers in your area and around the country. Or, just email me and I could find you some references.

Some Caveats

[Anonymous Coward]

I've sold a couple of domains, including, just before the dot-com boom really took off, one for $36,000. (No, I'm not a squatter -- every domain was actually in use before it was sold.) Anyway, here are a few things I've learned along the way:

• Don't take their first offer. Particularly if the buyer is a large corporation and you're a private individual or a small company, they're going to try to lowball you, thinking you don't know what it's worth (which you probably don't).
• Do some research up front on who might plausibly be interested in the domain name, even if you've already got an eager buyer. That way if they try to intimidate you into accepting a low offer by insinuating that they could take it away anyway via some trademark or trademark-like action, you'll be able to immediately respond with a list of other parties who could make similar claims (which definitely blunts any such action).
• Make sure you have an agreement in writing about the transfer, and get it reviewed by a qualified attorney. Registrars like Network Solutions screw domain transfers up all the time, and without a written contact you could suddenly find yourself without the domain name or the money.
• Make sure you're dealing with someone who has the power to complete the deal. Marketing people can get very excited about getting a domain name, and can sound very official when negotiating to purchase it, but there's a good chance that they have no power to actually sign a check.

Like alot of business deals, if you're careful and the buyer is sincere, everyone can walk away from the table with a big smile, but with something as intangible as a domain name it pays to be very careful when completing the transaction.

JESUS.COM

[shredds]

"Jesus" knows the answer to this question. I can't really explain to you who "Jesus" is, you really need to check out JESUS.COM [jesus.com]. In a question [jesus.com] in his FAQ, he addresses the issue of how much a good domain should go for:
If you can write a check for 10+ million we might have something to talk about.

A good domain name is subjective

[mutt lynch]

All that matters is what the purchaser wants to pay. I mean, five years ago slashdot.org was probably dirt cheap. Now is another story.

Re:A good domain name is subjective

[Graspee_Leemoor]

Actually this really is insightful- a good domain name will only help you at the start. I mean what does an amazon have to do with books? Once you have market penetration your name will become well-known and your domain well-visited. If ebay.com had been called buystuff.com would they have more money now? Doubtful.

Side note- buy.com (who own buystuff.com the domain) are looking for a senior developer who knows SQL server and VB- so how good can they be?!?!?!?!?!?!?

graspee