Cashing in on Unused Domain Names
| Category: Domain Names | Date: 2001-08-22 |
If youre a typical Webmaster, you will have registered several domain names over the last few years with the intention of developing sites, but for one reason or another, the sites never happened. Now that selling domain names for profit is a thriving business, why not cash in on those unused names? Heres a step-by-step guide to help you maximize the chances of selling a name, and just as importantly, maximize the selling price...
Step #1 - Establish if your name has any commercial value.
We all like to think that our names are the best around, but you only need to glance at the number of names on sale at domain name auction sites to see that supply easily outstrips demand, even for supposedly scarce dot coms.
In order to sell your name, it must have something going for it. There are a lot of nice names around, but nice doesnt necessarily equate to valuable.
Here are a couple of free ways to find out if your name has any resale potential.
a) Ask other domain resellers.
The easiest way to do this is to log on to one of the big domain name resale sites (Afternic.com or GreatDomains.com, for example) and join in a chat room discussion. Just ask a simple question like:
"Does anybody like Sitename.com?", or "Do you think SiteName.com holds any resale value?"
If you get a positive response from the chat-room floor, chances are that you have a name with some resale potential. Otherwise, its time to try another method...
b) Get some appraisals
On Afternic.com, you can get an unlimited number of free opinions on the value of a name through their Appraisals Board, http://afternic.com/index.cfm?a=research&sa=appraisals
Once you submit a name for appraisal, other Afternic members are then free to value the name, and also comment on it.
In order to get your name appraised by other members, you need to publicize it to them. You do this by appraising their names, and then suggesting your own name in return.
Dont be put off by the thought of having to value other peoples domain names. Read the valuation guidelines, and since you can choose to value any name you like, choose names which already have plenty of appraisals. You can base your own valuation on these.
Now its worth knowing that Afternic members tend to be very generous with their appraisals, so dont be surprised if the first valuation you get back suggests you can sell your name for some astronomical sum you only dreamed of.
Here are how Afternic appraisals typically translate into real-world sales values:
Appraisal Amount Sales value
0 - $5,000 0 - $250
$5,000 - $10,000 $250 - $1000
$10,000 - $20000 $500 - $1000
$20,000 - $50,000 $1000 - $2500
$50,000 - $100,000 $2500 - $5000
$100,000 upwards $5000 upwards
Once you have gotten some feedback, its time to move to the next stage - a professional appraisal. This is going to cost you money, so think before you leap. If you didnt get any positive chat-room feedback, or the appraisal values were very low, then youre probably going to have a great deal of difficulty selling the name. In that case, getting a professional appraisal might just be a waste of money.
A professional appraisal is an excellent way to get an independent valuation of your name, which you can then send out to potential buyers. There are many firms doing domain name appraisals. Check out GreatDomains.com, DomainCritics.com, or DomainAppraise.com for starters.
Again, dont get too excited if your name is valued at some enormous amount - even professional appraisers tend to suffer from the same "generous evaluation" syndrome that Afternic members fall victim to. Just consider the appraisal amount the "ceiling" of the price you can expect to get for your name. If you get half the amount, youve probably managed to get a very good deal.
Click here to recommend this article to a friend!
Step #2 - Promote or die!
There are 101 different ways to promote your domain name. One way I dont recommend is blanketing companies with unsolicited email. Writing mail to 200 banks asking if they want to buy FasterInternetBanking.com is not likely to win you many friends, nor make you any deals. Your time would be better employed using the methods listed below:
a) Update the domain name registration information
Many potential buyers will look at the information in the WHOIS database as a first step when investigating a name that they are considering buying. So make it perfectly clear that the name is for sale. Update the owners name to include (This name is for sale) after your own name.
b) Put a promotional Web site up
The other obvious way for a potential buyer to find out if a domain name is for sale is to visit the Web site. Dont disappoint them. Get some free Web space from Hypermart or FreeMerchant, and put a simple, one-page Web site up, showing that the name is for sale. Include a form or at least an email address so that interested parties can submit offers.
c) List the name on GreatDomains.com
These are the biggest domain name brokers on the Net with over a million names listed. But having so many names is a double-edged sword. The site attracts many potential buyers, but unless your name really stands out, you have very little chance of making a sale here.
List anyway, as this is a very important site, and by listing your name, it will be picked up by meta-domain search engines (see Sedo.com).
d) List the name on Afternic.com
This is by far the biggest domain name auction site on the Net, and is particularly suited to small-cap names i.e. those names which sell for under $5,000 (the vast majority).
According to Afternic, by listing at their site you are reaching up to 20 million potential buyers through their partner network. You really must list your name here.
e) Submit your site to Sedo
Sedo are one of the new breed - a meta-search engine for domain offers. In other words, they have a huge database of domain names which are available for sale, across a large number of domain name listing sites. You can also add your name to their database directly, which is highly recommended if you find your name is not already there.
f) Submit your name to other domain name listing sites
If you have some spare time, go ahead and list with as many of the smaller domain listing sites as you can find. - use iDomainLinks.com to find them. Most suffer from lack of liquidity, but the scattergun approach can sometimes pay dividends.
Step #3 - Make The Deal
You could get lucky, and receive an offer just days after listing your name. Typically, though, names are listed for months before any offers arrive. The key here is to be patient. Think about it - a party needs to come along who believes that the name is right, even essential, for their new Web site. The only other offers you will get will be from domain resellers, who will typically offer you 20-25% of a names potential value. Unless you really need the money, turn down these offers, but note them anyway, as they are external confirmation that your name has resale value.
Here are a few pointers that will help you negotiate a deal once the first offer comes in.
a) Private sale
Pros:
The buyer may reveal their identity. If it is a corporation, you should be able to negotiate a better deal.
Likely to take much less time than other methods.
Theres no middleman to take a commission.
You are free to negotiate deals other than straight cash. Leasing, profit-sharing, or stocks are all possibilities.
Cons:
You will have to arrange the transaction yourself - payment, escrow, domain transfer, registrar transfer.
Tips:
Dont say how much you want for the name - simply invite offers. If someone has a serious interest in a name, they wont back off because you refuse to name a price. Initially, they may only offer 25% or so of the amount that they are prepared to pay. After receiving their opening offer, use the professional valuation you received in step #2 as your counter-offer. This will set the boundaries of the negotiation.
b) GreatDomains.com
Pros:
GreatDomains lead you through the whole process
Buyers normally open the negotiations.
Cons:
Sellers pay a hefty commission, especially on names with low dollar value.
The process can take many weeks.
Tips:
List your name as Make An Offer, then you are forcing buyers to make the first offer.
c) Afternic.com
Pros:
No commission for sellers.
Three types of auction to choose from, including a new Make An Offer auction.
An overtime feature where you can negotiation a fair price with bidders on an auction that didnt reach the reserve price.
Cons:
The process can take many weeks.
Only straight cash offers are possible.
Tips:
Even if you get no offers for weeks or months, resist the temptation to keep lowering your opening bid. Buyers will latch onto this, because it is a sign that you are desperate to make a sale. If you are confident that your name has value, name your price and stick to it. Your patience will be rewarded.
Set a high reserve price. If the auction doesnt reach the reserve price, you can always negotiate a fair price in overtime.
If you only have one bidder, stay firm during overtime negotiations. Remember, if they didnt want the name, they wouldnt have bid on it. If you fail to agree terms, you can always re-hold the auction and accept a lower offer.
Once you have agreed a deal with the buyer, then you will have to complete the deal. They send you payment, and you transfer the name to them.
Its best to use an escrow service here. It protects both parties, but can be quite expensive, so make sure you have agreed beforehand who will pay for it. Normally the buyer pays, but sometimes the cost is shared.
Good luck!
About the author:
Lee Hodgson is founder and owner of DomainGuideBook.com a firm which specializes in helping small businesses choose and register the best domain names for their web sites.
To subscribe to the Domain Guide Book newsletter, "Your trusted source for domain names news", just send a blank email to DomainGuideBook-subscribe@listbot.com
:To contact see details below.
lee@domainguidebook.com
http://domainguidebook.com
Step #1 - Establish if your name has any commercial value.
We all like to think that our names are the best around, but you only need to glance at the number of names on sale at domain name auction sites to see that supply easily outstrips demand, even for supposedly scarce dot coms.
In order to sell your name, it must have something going for it. There are a lot of nice names around, but nice doesnt necessarily equate to valuable.
Here are a couple of free ways to find out if your name has any resale potential.
a) Ask other domain resellers.
The easiest way to do this is to log on to one of the big domain name resale sites (Afternic.com or GreatDomains.com, for example) and join in a chat room discussion. Just ask a simple question like:
"Does anybody like Sitename.com?", or "Do you think SiteName.com holds any resale value?"
If you get a positive response from the chat-room floor, chances are that you have a name with some resale potential. Otherwise, its time to try another method...
b) Get some appraisals
On Afternic.com, you can get an unlimited number of free opinions on the value of a name through their Appraisals Board, http://afternic.com/index.cfm?a=research&sa=appraisals
Once you submit a name for appraisal, other Afternic members are then free to value the name, and also comment on it.
In order to get your name appraised by other members, you need to publicize it to them. You do this by appraising their names, and then suggesting your own name in return.
Dont be put off by the thought of having to value other peoples domain names. Read the valuation guidelines, and since you can choose to value any name you like, choose names which already have plenty of appraisals. You can base your own valuation on these.
Now its worth knowing that Afternic members tend to be very generous with their appraisals, so dont be surprised if the first valuation you get back suggests you can sell your name for some astronomical sum you only dreamed of.
Here are how Afternic appraisals typically translate into real-world sales values:
Appraisal Amount Sales value
0 - $5,000 0 - $250
$5,000 - $10,000 $250 - $1000
$10,000 - $20000 $500 - $1000
$20,000 - $50,000 $1000 - $2500
$50,000 - $100,000 $2500 - $5000
$100,000 upwards $5000 upwards
Once you have gotten some feedback, its time to move to the next stage - a professional appraisal. This is going to cost you money, so think before you leap. If you didnt get any positive chat-room feedback, or the appraisal values were very low, then youre probably going to have a great deal of difficulty selling the name. In that case, getting a professional appraisal might just be a waste of money.
A professional appraisal is an excellent way to get an independent valuation of your name, which you can then send out to potential buyers. There are many firms doing domain name appraisals. Check out GreatDomains.com, DomainCritics.com, or DomainAppraise.com for starters.
Again, dont get too excited if your name is valued at some enormous amount - even professional appraisers tend to suffer from the same "generous evaluation" syndrome that Afternic members fall victim to. Just consider the appraisal amount the "ceiling" of the price you can expect to get for your name. If you get half the amount, youve probably managed to get a very good deal.
Click here to recommend this article to a friend!
Step #2 - Promote or die!
There are 101 different ways to promote your domain name. One way I dont recommend is blanketing companies with unsolicited email. Writing mail to 200 banks asking if they want to buy FasterInternetBanking.com is not likely to win you many friends, nor make you any deals. Your time would be better employed using the methods listed below:
a) Update the domain name registration information
Many potential buyers will look at the information in the WHOIS database as a first step when investigating a name that they are considering buying. So make it perfectly clear that the name is for sale. Update the owners name to include (This name is for sale) after your own name.
b) Put a promotional Web site up
The other obvious way for a potential buyer to find out if a domain name is for sale is to visit the Web site. Dont disappoint them. Get some free Web space from Hypermart or FreeMerchant, and put a simple, one-page Web site up, showing that the name is for sale. Include a form or at least an email address so that interested parties can submit offers.
c) List the name on GreatDomains.com
These are the biggest domain name brokers on the Net with over a million names listed. But having so many names is a double-edged sword. The site attracts many potential buyers, but unless your name really stands out, you have very little chance of making a sale here.
List anyway, as this is a very important site, and by listing your name, it will be picked up by meta-domain search engines (see Sedo.com).
d) List the name on Afternic.com
This is by far the biggest domain name auction site on the Net, and is particularly suited to small-cap names i.e. those names which sell for under $5,000 (the vast majority).
According to Afternic, by listing at their site you are reaching up to 20 million potential buyers through their partner network. You really must list your name here.
e) Submit your site to Sedo
Sedo are one of the new breed - a meta-search engine for domain offers. In other words, they have a huge database of domain names which are available for sale, across a large number of domain name listing sites. You can also add your name to their database directly, which is highly recommended if you find your name is not already there.
f) Submit your name to other domain name listing sites
If you have some spare time, go ahead and list with as many of the smaller domain listing sites as you can find. - use iDomainLinks.com to find them. Most suffer from lack of liquidity, but the scattergun approach can sometimes pay dividends.
Step #3 - Make The Deal
You could get lucky, and receive an offer just days after listing your name. Typically, though, names are listed for months before any offers arrive. The key here is to be patient. Think about it - a party needs to come along who believes that the name is right, even essential, for their new Web site. The only other offers you will get will be from domain resellers, who will typically offer you 20-25% of a names potential value. Unless you really need the money, turn down these offers, but note them anyway, as they are external confirmation that your name has resale value.
Here are a few pointers that will help you negotiate a deal once the first offer comes in.
a) Private sale
Pros:
The buyer may reveal their identity. If it is a corporation, you should be able to negotiate a better deal.
Likely to take much less time than other methods.
Theres no middleman to take a commission.
You are free to negotiate deals other than straight cash. Leasing, profit-sharing, or stocks are all possibilities.
Cons:
You will have to arrange the transaction yourself - payment, escrow, domain transfer, registrar transfer.
Tips:
Dont say how much you want for the name - simply invite offers. If someone has a serious interest in a name, they wont back off because you refuse to name a price. Initially, they may only offer 25% or so of the amount that they are prepared to pay. After receiving their opening offer, use the professional valuation you received in step #2 as your counter-offer. This will set the boundaries of the negotiation.
b) GreatDomains.com
Pros:
GreatDomains lead you through the whole process
Buyers normally open the negotiations.
Cons:
Sellers pay a hefty commission, especially on names with low dollar value.
The process can take many weeks.
Tips:
List your name as Make An Offer, then you are forcing buyers to make the first offer.
c) Afternic.com
Pros:
No commission for sellers.
Three types of auction to choose from, including a new Make An Offer auction.
An overtime feature where you can negotiation a fair price with bidders on an auction that didnt reach the reserve price.
Cons:
The process can take many weeks.
Only straight cash offers are possible.
Tips:
Even if you get no offers for weeks or months, resist the temptation to keep lowering your opening bid. Buyers will latch onto this, because it is a sign that you are desperate to make a sale. If you are confident that your name has value, name your price and stick to it. Your patience will be rewarded.
Set a high reserve price. If the auction doesnt reach the reserve price, you can always negotiate a fair price in overtime.
If you only have one bidder, stay firm during overtime negotiations. Remember, if they didnt want the name, they wouldnt have bid on it. If you fail to agree terms, you can always re-hold the auction and accept a lower offer.
Once you have agreed a deal with the buyer, then you will have to complete the deal. They send you payment, and you transfer the name to them.
Its best to use an escrow service here. It protects both parties, but can be quite expensive, so make sure you have agreed beforehand who will pay for it. Normally the buyer pays, but sometimes the cost is shared.
Good luck!
About the author:
Lee Hodgson is founder and owner of DomainGuideBook.com a firm which specializes in helping small businesses choose and register the best domain names for their web sites.
To subscribe to the Domain Guide Book newsletter, "Your trusted source for domain names news", just send a blank email to DomainGuideBook-subscribe@listbot.com
:To contact see details below.
lee@domainguidebook.com
http://domainguidebook.com
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