Two articles for your weekend.
I read two great articles on domain sites this week that I wanted to bring to your attention.
First is a post by Owen Frager. Now, I’ll be the first to admit I don’t usually click through to Owen’s stuff because I find the story has little to do with the headline. But when I saw that Escrow.com retweeted an article he wrote about the company, I took a look.
Frager has written a fascinating story about Escrow.com and its president Brandon Abbey. Definitely check it out.
The other article is from Elliot Silver. In his post “Thick Skin Is Necessary When Selling Domain Names To End Users“, he gives examples of how some end user prospects have told him he was crazy for asking his prices.
I know a lot of domainers would respond to such feedback by telling the end user he’s an idiot or missing an opportunity that one of his competitor’s will take advantage of.
But what’s the benefit to this? As Elliot points out, there’s no benefit…and it could potentially hurt you.
The smart to do is just move on. Why waste your time with someone who’s not going to buy your goods?
I’ll add one point to Elliot’s story. When a domain investor tells an end user he’s an idiot, how do you think that end user will respond the next time an investor pitches him or her?
Not only is “just moving on” smart for you, but it helps the industry, too.
Tarik Pierce says
The average end user is 100% clueless about a good domain name. He is brainwashed into believing that good content is enough.
You need a good brandable domain to stand out in the crowd. Buy like Gary V said…The internet is very young.
Those who stay in this industry for the next 2 years will be rewarded handsomely.
Troy says
The average domainer is 100% clueless about the value of a good business plan. He is brainwashed into believing that a premium domain is enough.
A good business plan with a quality product/service with dance the socks off a good domain ANY day of the week. A good business with a quality product can brand itself.
This is not to say that a premium domain has no value. If I believed that I would not own as many domains as I do. What I mean is all this talk about end users not “getting it” from domainers that are making less that $50,000 per year with domains is so illogical it’s funny. This argument has been made by people much more convincing than I but we still see a domainer mentality using phrases like “end users just don’t get it”.
Troy says
The “domain industry” is so incredibly small that most business men wouldn’t even consider it an industry.
Just to make my point, there are 2.9 billion graphite pencils sold in the US yearly. At an average cost of 25 cents each this is 710 million dollars in just graphite pencils ALONE. Divide that by 52 weeks in a year gets you 13.6 million dollars in graphite pencils sold in the US per month!
Now look at the combined monthly sales of Afternic, Sedo, Great Domains, Godaddy.com auctions and all other secondary domain markets. One average the complete, world wide sale of secondary domain names (called Domaining) probably totals less than the monthly sales of graphite pencils in the United States alone.
Again, I am not claiming that domains have no value. Just pointing out the foolishness of some domainers to pretend like they are part of some “sleeping giant” of an industry. Overtime some domainers WILL DO WELL. Domainers that have premium domains will continue to sell them for massive profits but they are probably less than one out of every thousand domainers.
Domainers that started late and were still able to flip there way up to premium domains are ever rarer, probably one in 5000.
Love the industry, it is a fine living if you know what you are doing, but understand how the rest of the business world sees you when you bandy about terminology like “End users just don’t get it” to companies that are doing millions of dollars in revenue each month.
9 out of 10 domainers are children when it comes to understanding real business.
Troy says
Oh, and I did that math wrong. The graphite pencil industry in the US is a 59 million dollar per month industry, not a 13 million dollar one. This helps make my point five times over.
help says
Troy is just about 100% correct on everything. I always laugh when I hear the term “domain industry.” There are some that think that developing a domain portfolio is some major accomplishment like curing cancer rather than just a good business decision.
Andrew Allemann says
If you’re referring to the domain resale industry, you’re right. It’s tiny. It’s a good business for a handful of companies, but it’s small.
The over all domain industry is much larger. Just look at the sales of VeriSign and Go Daddy.
It’s still not huge, but we’re talking multi-billion.
help says
Godaddy is a hosting company and Verisign is a security company. You read too many of those delusional puff pieces that are published at certain domain name web sites.
Rob says
absolutely right troy. well said, plus you gave numbers to back it up.
and that concurs precisely with what i have said on dnw in the past – that a large part of the domain industry is just extortion and not real value (they “dont get it” if they don’t pay my asking price). now i was gang bashed for my views by quite a few. there are no more premium domains today than there was 10 years ago, it’s just that all latecomers have jumped onto the leftover rubbish and think they’re all premium.
the thick skin requirement if apt for the handful of REAL premium domain owners, but when the others apply it they bring the whole domain market into disrepute and (i believe) actually lower the industry total due to fewer sales.
for the record, i own “a few” domains too, perhaps only one or two could be called premium.
help says
“a large part of the domain industry is just extortion and not real value”
They are just not using the proper metrics to determine the price. They just look at other sales or PPC revenue. You need to look at the business plan for the domain whether it be development costs vs. expected income and/or the benefits of the domain as it relates to branding and advertising.
Saying Joe Blow sold example.me for $xxx and this somehow sets a price guide for all .me domains is not a valid metric for determining value. (Besides, most real high-priced domain sales are confidential)
Kal B. Hensel says
What are the metrics by which you measure a domain to qualify as premium? I own hundreds.