Tag: domain valuation

Domain Valuation: There is No Kelley Blue Book

Red Classical Sports CarWhen someone goes about buying a car, there is a valuation model to follow.  If a car is brand new, the value is set by the manufacturer, which allows for their margin plus a margin for the dealer.  Once a vehicle is driven off of the lot the depreciation begins.  That is, unless the vehicle’s value appreciates.  Take, for example, the greatest car ever constructed, the Shelby Mustang GT500 of the late 1060s and early 1970s.  When the 1971 model starred in the film classic Gone in 60 Seconds, it changed the world of movie car chases.  The 2000 Nicholas Cage remake of Gone in 60 Seconds used a 1967 model of the same vehicle, and revitalized the world’s fascination with “Eleanor” (the code name given to the sumptuous steel vixen).  That particular model was recently sold at auction for over one million dollars.  If you’re lucky, you’ll find a fix-er-upper for $100,000.  That’s a far cry from the original sticker price of $8,000 when it was sold right off of the assembly line.

This same story can be told about domain valuation.  There are websites out there giving ‘valuations’ of domain names but, as well-meaning as they may be, only take into account simple factors such as keyword popularity, selling price of similar names and very little else.  Domain valuation is never that simple.  When we first receive a request from a client to inquire about the purchase of a domain we first investigate the owner.  This allows us to take into account factors such as their initial intention, other uses, their tech savvy and even their financial bracket.  Typically there are two kinds of domain owners out there.  The first is the ‘domainer’, who valuates the domain using a cold formula then awaits a reasonable price and moves on to the next domain.  No emotion is tied to the deal.  It’s just a number.  Then there’s the individual who purchased it with a vision in mind, went to the trouble to register the same name on other social networks and sees the name’s potential in a way that only a parent can with its own child.  With the latter person, it doesn’t matter if the project is dead or alive; whether they are in need of funds or not.  To them, the name is priceless.

This does not mean there isn’t a number that could greenlight this sale.  It just means that the owner of the name values it in such a way that ‘they’ can’t put a price on it.  There is always a price.  It is our job to begin a negotiation that welcomes a dialogue.  This means to get to know the individual and build rapport.  It also means we need to come up with a starting price that does not turn them away.  If I offered you $500 for Eleanor, you’d likely not return my call and, even more likely burn me for future contact.  Our approach has shaved millions off of domain name selling prices.  This doesn’t mean we’ll be able to buy you a domain for a fraction of its potential price.  What we guarantee at IPCybercrime will provide honest, respectful treatment of both sides and the best possible outcome for you, the buyer.

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