There are three stages involved in selling a domain
name. The first is to determine its market value; the second is to decide on the minimum price you are willing
to sell it for; and the third is to choose
the best venue for selling it.
Stage 1: Determining Market Value
You need to have an idea as to the market
value of the domain name. Because each domain
name is unique, it is most likely difficult for you to estimate
the fair market value of your domain name. The most objective solution is to have it professionally appraised.
Stage 2: Determining Personal Value
Now that you have an estimated market value of your domain name,
what is the minimum price you are willing to sell
it for? Your personal valuation of the domain name depends on its current
market value and your expectation of the future
price trends.
Just as in the stock market, there are two schools of thought. Some
investors believe
that markets are efficient and that prices
reflect true value at a given point in time, while
others believe that they can outperform the market
by either selecting stocks or timing peaks and troughs.
However, domain markets are not as efficient as
stock markets, and thus negotiation skills and acquisition
urgency play a significant role in determining value
at a give point in time.
Stage 3: Choosing the Best Venue
(1) Auction
Listing
One
of the main appealing features of an auction is
the immediacy of the sale, even though it may be
achieved at depressed prices.
One of the major limitations of an auction is non-synchronicity
of demand and supply, i.e., situations in which
there is no one interested in buying your domain
name when you are ready to sell it. (This problem is discussed in more details in Auction
Data Can Be Misleading! This problem can be overcome
through customized auctions and direct contact even
if one designs auctions with longer listing time.
(2) Customized Auction
This is an auction listing with the added feature that either the
seller or his broker has contacted potential buyers
to publicize the event. It is intended to solve
the non-synchronicity problem mentioned in (1).
(3) Catalog of Listings For Sale
The main advantage of catalog listing is its clear signal to potential
buyers that an owner is interested in selling a
domain name, but doesn’t have an immediate need
to sell. DomainMart has integrated this list with
the Whois search so that a buyer does not have to
search separately for availability.
A limitation is that sellers may need to list their domain names
with a number of major brokers, as there is no single
dominant listing yet. Another limitation occurs
when a seller does not want to reveal the domain
name being sold, for some reason. If the latter is your case, please
consider Private Placement, discussed
next.
(4)
Private Placement
Private placement means that
you list your domain name with a broker, but the
information is not revealed to the public.
This option eliminates the need to regularly
check Wanted and other listings.
Such a list is used by DomainMart
to match Wanted listings without revealing the full
information about the domain name. Only certain
characteristics of the domain name are initially
revealed.
(5) Direct Contact with Potential Buyers
With
this option, potential buyers are contacted directly. Considerable time and effort are involved in compiling a list of
potential buyers and their contacts. (Sellers need to be careful when trademarks are involved.)
To
facilitate this process, DomainMart provides a
customized
list of contacts whose businesses are intimately
related to your domain name.
(6) Leasing Through
MoreValueDomains.com.
Concluding Remarks
If a buyer has approached you, you should negotiate for best price. However, remember that domain markets are not
as efficient as stock markets; thus, prices may
not reflect the fair market value when you are ready
to sell your domain name. Therefore, negotiation skill and acquisition urgency play an important
role in selling domain names.
Depending on your negotiation skill, you
may want to retain a broker/agent to act on your
behalf. You should also consider a custom auction,
as you can expect at least one bidder.
You should weigh the benefits and limitations
of each option before you decide on the best venue
for you.
