stupiddomains.com
March 16th, 2011 // 12:29 am @ admin
It’s been a while since I’ve looked at domains, in the past especially when I bought my first domains it was fun and you could fairly easily find at least an iteration of what you were after. Lately I’ve proven to myself once again that I am actually capable of applying myself to this niche site/affiliate marketing stuff and I’m taking a real serious approach, the most frustrating part is no longer finding the niches, that remains relatively easy now the hard part is finding appropriate domains.
Last year I found what I thought was a great domain in awaylife.com, nice, short and ripe for developing as an expat resource site I thought, I sat on it for two days and when I went to buy… yep, gone. hugedomains.com had snapped it up and were now trying to sell it for $2.8k (Now $2.6k, it was just renewed so seems the price drops for each year no one buys it). Pissed! Since then I hadn’t really looked at domains.
With my recent foray into niches something I’m interested in doing is an Action Camera site, the likes of GoPro and Contour helmet mounted point of view cameras. But can I find a domain that doesn’t sound like complete gibberish? I haven’t come close. In this case the niche doesn’t help, there are a number of names these cameras are know by which might help for keyword variety but it doesn’t for a keyword targeted domain. Nor do site like hugedomains running around registering every damn two word combination that doesn’t make no sense at all and slapping prices of hundreds if not thousands of dollars on them. I’m sure hugedomains is making huge money but they are doing it at the expense of the internet. Huh? What I mean is that most of the sites on the net are not companies with budgets for acquiring domains they might use, sure many of us are guilty of letting domains languish undeveloped or ignored, but then that is to be expected somewhat. What is completely stupid is snapping up 100s of thousands of domains and pricing them regardless of their quality well beyond the reach of the average domain buyer, where they remain, for years, undeveloped.
If you are a domain buyer I’m sure you’ve thought of a domain, maybe something you are interested in and just hammered the address into your browser, fully expecting it would already be taken. And you’re right it is taken, but it’s not filled with useful information about the topic, it is another fucking parked domain. It pisses me off, so many domains with great potential sit there useless and worthless, much like the guys who register them.
Lets considers the basic economics, supply and demand.
Supply is easy, it’s 1. Short supply increases prices but just because there is only 1 of every domain doesn’t mean there aren’t alternatives, we have the .net’s and .org’s and others, plus we have different words that hold the same meaning.
Demand can certainly vary wildly, sex.com is the obvious example selling at of $10 Million the last few times it has changed hands. But in the world of domains the 80/20 rule is likely more of a 98/2 rule or even higher. Of course I can only guess at what the market for a given domain is at any given time is but my guess is going to be that over the course of a year for the vast majority of domain purchases, the number is somewhere between 0 and 2 potential buyers.
Lets think like an actual businessman and not a brainless domain speculator. A business will want to make a 50% gross profit off the registration and reselling of a domain, they don’t want to hold the merchandise for too long so lets say they buy domains they believe they can sell in the next 5 years at $10 a year to register it they need to set the price at $100 to make their desired profit (ignoring overheads, which lets face it, is pretty small in the domains game). Hang on, doesn’t that mean if he can sell it in 1 year he’ll only sell it for $20 to make his profit? Of course neither of us are that stupid, if he can sell it in a year then demand is higher, if he sells it still for only $100 his gross profit is 90%, not to be sneezed at. These are simple maths and I think it is worth pointing out that the 90% profit means a 900% markup on wholesale price and yep that means a $1000 (a moderate price at best) domain sold within the year has copped a 10,000% markup. Are we even talking about a fair price anymore? Maybe $1000 for an average domain has left the realms of what might be fair pricing and moved into the realm of is this even ethical? I mean I doubt they guys are coming up with 100,000+ domain databases by themselves, he has likely just purchased bit of software to scan unregistered 2 word domains by readability. The “work” he puts in is minimal as is the value of the service he is providing.
On top of this many of the domains I’ve been seeing lately don’t have great money making potential, they would more likely be a labour of love for the owner. The bulk of sales for most lower level sites (the sites with the types of domains I’m talking about) go for about 1 years worth of the site’s annual income, can we really expect similar numbers for an undeveloped domain? The analogy I’m thinking of is a real estate agent trying to sell an acre of undeveloped land for $5 Million because the buyer might build a $5 million house on it.
Supply and demand? I don’t think so. What’s worse, with each item being unique, competition isn’t even a factor and maybe it’s right there where domain economics is broken.
Oh and by the way, I did check if stupiddomains.com is available, it’s not, and it redirects to a domain registrar.
Category : Blog &Musings and Rants
