EXPERT Q&A: The First Big Domain Sale

Domain Name Expert Answers to Your Domain Name QuestionsIn the Q&A series, domain name experts, influencers and friends of DomainSherpa offer their opinions on various topics. The focus this week is on the tactics that domainers have employed during their first big sale ($5,000 or more).

Selling a domain name can be rife with frustration and false starts. The effort a seller puts in to contacting potential end users often leads nowhere. Other times, an unsolicited purchase offers will come in, only to have the buyer lose interest when the domain name owner counters with a specific number. In one case, a large domain investor recently lost a $200,000+ sale by not coming down $10,000. So what can you do to close more sales? Three experts chime in to help out.
David R. from Nevada asks: “I am still looking for my first ‘big’ sale – a domain name with a ticket price of more than $5,000. How do other domainers close their big deals? I need some tips – and motivation – to begin the sales process.”

Daniel Kollinger, NICIT

The first domain name I sold for more than $5,000 was fussball.net. (Fussball is German for “soccer.”) It sold for 10,000 euros (about $13,500) in 2005, more than five years after I started in the domain business. For this domain sale, I made phone calls and sent faxes, emails and letters. I even bought a book with addresses of those in the soccer industry. In the end I had only two parties bidding for the domain.

My best tip for success in selling domain names is to do your research. Before contacting potential buyers, research the topics your domain names are in and understand the business model of potential end users. Unsuccessful sales efforts cost you a lot more energy and motivation than the researching. Also, do your research even before acquiring a domain name for your portfolio. Pick the ones for which you can easily find potential buyers.

For domain sales you have to find the buyers whose business interests most closely match the domain name you have to offer, not necessarily a large number of potential buyers. If you were selling a product everyone uses, like cars or furniture, then contact as many customers as you can find and don’t think about it. But a domain name is unique, so spend time on researching to find the end user who has the unique strategy that best fits your domain name.

Daniel Kollinger, Owner of NICIT.com (@NICIT)

Mark Fulton, DotSauce Magazine

I personally focus on domains in a more modest price bracket and have never made a domain sale over $5,000. However, I have made a handful of sales just under your target that I would be happy to provide some detail on.

Looking over the DNJournal.com weekly sales reports, especially recently, you may notice some strange domains selling for big bucks. Sedo is such a huge marketplace and the Internet so vast, it’s my understanding that many of these sellers are essentially “winning the lottery.” Your plan should start with quality domains that are compelling to a potential end user. The next step is to get great exposure.

My three highest sales came from a GoDaddy premium listing, a Bido auction and a BrandBucket listing. GoDaddy premium listings are performing very well for many. If you are not at GoDaddy, you might want to consider transferring over to get your domains in front of people ready to buy. I marketed the Bido auction on DotSauce and to my extended network at least a week in advance of the auction; the bidders showed up. One of my short domains was perfect for BrandBucket, so I made an effort to have it listed there and a buyer came along in just a few months.

Mark Fulton, Founder of DotSauce Magazine (@DotSauce )

Michael Cyger, DomainSherpa

My first domain name sale was a doozy: $7,500 and a case of Banana Boat sunscreen. The biggest piece of advice that I can offer based on my experience is this: Know your customer.

The unsolicited offer to purchase SunPill.com came in via email back in 2006 for $500. Having never sold a domain name and having no contacts in the industry to ask, I had no idea at the time what the fair market value of such a domain name should have been. But given that the offer was nine times my original purchase price, it seemed like the buyer was keen to acquire the domain. I did a little research and discovered that the person making the offer was the founder of Banana Boat sunscreen. I conjectured to myself that he had likely discovered his next-generation product – in the form of a pill. (It turned out he had formulated a supplement branded SunPill that would provide sun protection from the inside out.)

If memory serves me correctly, I countered at $10,000 and he countered at $5,000. We settled at $7,500 and a case of sunscreen – all via email communications. But I never would have known what such a domain name was worth unless I knew that little bit of information about the buyer. To him, the domain name I owned was one that could not be easily substituted with another name – and that made all the difference in the negotiation.

Michael Cyger, Publisher at DomainSherpa.com (@MichaelCyger)

What advice do you have to offer for making the first ‘big’ sale? Tell David! Leave a response.

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6 Responses to “EXPERT Q&A: The First Big Domain Sale”

  1. The advice in this thread is still very relevant till date for all domainers, especially those just venturing into this aftermarket domain sales business.

    Thanks guys!

  2. So much helpful article. Hope someday I can share my First Big Domain Sale experience.

  3. I just started domaining full time! My business partner and I listen to at least 1 interview a day on your domainsherpa.com site! :) Thank you!
    Don

  4. JR says:

    I have to say that I am more of a Domain collector than an investor or a domainer. I buy domains which I would someday want to develop, or I would like to name products. I have really not developed a domain far enough to be proud of it. However, sales of my domains have paid for an 800+ domain name portfolio (over the years I am break even).

    In all domain sales I have made, I have always been contacted by endusers interested in these domains. My biggest concern with domain sales is that sales are not constant… for example, in 2011 I made all my sales during the month of August ($10,000 total)… Interestingly, sales were completely dry before and after August. If I had a constant stream of sales, I would feel better about my portfolio and would be able to plan better. My portfolio must not be that bad, because many of the domain names i have let go have been picked up by others and a good bunch developed…

  5. I have sold several domains for well over this amount.

    My experience is to develop the domain, generate synergy, get google ranking at or near the top, invest in adwords, then, when you have an income stream, sell.

    I sold ChicagoJOBS.com and KnoxvilleJOBS.com this way in the mid to late 2000′ with both sales exceeding $50,000 substantially.

    Additionally, I have sold several for over $10,000.00 by investing in software from eDirectory.com, developing the database, getting ranked high and then selling the complete package.

    Another option to selling is leasing, which I hav done more recently. Make the lease rate affordable and have a reasonable buy out after the lease term. If they fail, you have made money. If the win and purchase the domain, you have made money.

  6. Ian Wedgewood says:

    Great advice all the way around. Much appreciated.

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