What is an asset worth if no-one wants to buy? That’s the title of a post I read on Reuter’s DealZone blog today. I don’t want to comment on that specific article here, but the title triggered an interesting question about a phenomenon one can observe in the domain industry every day:
Overpricing, or at least, different perceptions of value by buyers and sellers. So, what is a domain worth if there is nobody who wants to buy it? If there is nobody willing to pay your asking price?
This is an interesting topic, because, technically, an asset doesn’t become completely worthless if there is no buyer for it in the current market. But the problem is, if there is no buyer, you will not be able to sell the asset and you will not make any money.
Domain valuations are always subjective. That’s the problem. Domains are still more complicated to objectively evaluate compared to real estate, for example, because there are no proven, commonly accepted appraisal methods. We have no appraisal standards in the domain industry and numeric factors of value, such as keyword searches and pay-per-click prices, are changing quickly.
That is one reason why you see hundreds, if not thousands of domains being offered for sale on domain forums or on eBay for prices a rational investor can only laugh at. I would argue that there are more meaningless low-quality domains on the market than there are buyers. So many domains no sane investor would want to buy.
But what’s the value of those domains? The buyers and neutral observers will say those domains are worthless, but from the owners’ point of view the situation is obviously quite different. There are still so many disillusioned domain sellers in the market that I can hardly believe it. If there are absolutely no buyers for a domain, chances are that its sale value is very close to zero.
If you just can’t find any buyer for your domain name, no matter how hard you try, carefully reconsider the asking price. If this still doesn’t help, maybe the domain isn’t as good as you initially thought it was, and you should perhaps find another way of getting rid of it.
The bottom line is, if there is nobody in the market you can sell the domain to and if you won’t turn it into a profitable project yourself, the domain is worthless. You shouldn’t hold a domain for investment that nobody else wants to buy. Don’t fall in love with your domains. Renewing worthless domains won’t improve your situation, it will only cause more headaches.
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> What’s the value of a domain nobody wants to buy?
At least $60! Many times I’ve tried to sell on the forums a domain I plan to drop for a mere $10. No one buys it, then when it drops I see Pool picks it up which means at least one person preordered it for $60, and it possibly went to auction for more.
Jeff, that’s happened to me quite often, too. It’s just frustrating to see that you’re unable to sell an expiring domain for a low amount of money, but once the same domain expires and gets picked up by a dropcatcher, there are suddenly buyers willing to pay $79 for the same domain they could have gotten for less than half that price.
It is as if some people thought domains sold by SnapNames, Pool etc. were more valuable than domains offered for sale directly by the owners.