Ask the Experts: To Price or Not To Price
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This is a question that comes up often, so we thought we’d get some expert opinion . The responses are mixed, but the prevailing message seems to be: To move quickly post the price. To maximize the sale price, discretion is key.
Q. To price or not to price – Which helps sell a domain more easily?
A. Buy-it-now is proven to be the fastest way to make a sale and promoted as GOD by the brokers with self-interest in mind to push it this way. I think it’s harder to make a quick sale on a domain without a price. But, to get full value, knowing what to quote or what to offer depends on knowing WHO is on the other end of the line.
Example: 6 Months ago, the Chairman of a large Global financial firm called me about a domain from the Whois that he eventually bought for $25,000 and used to name a cloud software service. He had remembered seeing it “somewhere” a year before with a “Buy-It-Now” price of $995. I told him it was an error and that brokers often tease the market with properties they don’t own just to get attention. He bought my story. I was lucky he didn’t buy the domain when he first saw it at the BIN price of $995. At the time I wanted to take the easy way out and link to a brokerage sales ordering system, because negotiation is hard! But as this example proves, it can cost you on one sale what it would take the profit from 100 buy-it-now sales to make up, if you get misled by industry metrics and appraisals and price a domain much less than the buyer is prepared to spend.
Remember it’s not about what a domain is worth to you. All that matters is what a domain name is worth to buyer. If they are looking for an exact match to their brand, and yours is the only .com with hundreds of thousands of other companies who share that same name and would want it, it’s not about “Price or Not To price,” it’s about “Time and Patience.” If you really want to absorb this point, read my story of Frank Schilling’s $30 Valuate appraised name that just sold to Warren Buffett for near six-figures.
(PS – One additional cautionary note about BIN prices. If you leave them all around the Internet, when the buyer searches for your domain he is going to know the lowest you will accept and then becomes the card holder in any negotiation.
– Owen Frager, FragerFactor.com
A. I do not price domains too often myself. I do not know the price to set nor have the time to do it in scale. Without knowing the buyer, demand and other factors, I choose to leave the opening bid price flexible. I do set minimum offer prices and start from there to filter out the sub-$500 bidders. I personally like it when domains have a BIN price, as it lets me know immediately if the buyer is on crack or its a domain deal worth pursuing. One other reason I do not price domains is becuase often it will sit with the BIN price. Usually over time, the domain increases in value so I would really be hedging my bet the wrong way. If a buyer wants to buy it, they will pay the most when the process is easy, priced fairly and have the resources. So, while BIN might increase sales on lower domains, it could leave you a lot on the table.
– Chad Folkening, Ecorp.com
A. I generally price names when I am actively selling them to help close deals. However, when my domain names aren’t actively being sold, I don’t price them. This enables me to price them based on different variables, such as the buyer, market conditions, and the current keyword activity and advertising data.
– Elliot J. Silver, Elliot’s Blog
A. Very rarely do I ever put asking prices on premium names out of the gate. Once you do this, you’ve set a ceiling on how much you can sell the name for. I normally just give a ballpark price range or a minimum threshold in order to let a potential buyer know what it’s going to require to open the door to negotiations on a particular name. Once I’m confident I’m dealing with a serious buyer and I know as much as I can about him, I’ll wait until I feel he’s put his most compelling offer on the table. Assuming he’s within range of what I’m willing to accept, then I’ll counter with my asking price and attempt to help capabilities meet desires from there out.
– Steven Sacks, DomainBrokers.com
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