What Do Good Domain Names Sell For?

wirefarm asks: "A friend of mine has owned a good generic domain name for the better part of ten years. She and her husband have a small consulting business incorporated in that name and now a big financial company has expressed interest in their domain. It's a name in common use for hotels, bed and breakfasts, country clubs, schools, churches and probably a few towns, as well. Very generic and pleasant. Something roughly like 'hillside.com', though that's not it. Fortunately, the company is being pleasant about it and not threatening to squash them with lawyers... They've never considered selling it before and are not just trying to make a buck, but they're curious what sort of money is typically involved in this type of thing. Anyone been in this situation lately? What should they be careful about?"

Comments

is it a liabilitity?

[ameoba]

I'm just imagining an ultra-generic domain name, and it seems to me that, if your bandwidth is in any way metered, that it'd be a liability. I doubt people looking for info on a hotel are going to be in any way interested in consulting services, so it's not like a whitehouse.com thing, where accidental hits are still positive.

I guess a few things to consider might be:

- How much is the business you get through your website worth?

- How much trouble would you have to go through to let your existing customers know your new website/email addy?

- If you have any sort of reputation attached to the domain, how difficult would it be to rebuild it?

I'm sure a business student would be crunch the numbers better, but at a minimum you'd need to ask for some ammount that equaled your potential revenue from the domain compounded over the time it would take you to get a new domain to that point. I seem to remember something about "future value of money" from a class I took...

The other way to look at it is to do the same type of calculation from the buyer's perspective; how much do they stand to make off of it? Crunching the same numbers could show you how much it's really worth to them.

Some of the above posts mentioned appraisals & domain selling services, if you don't have any better sources, you might want to go through one of them. Few people sell a house without a real-estate agent.

Make sure there's a transition link for YOU

[MadCow42]

I'm sure it's popped up already in your mind, but make sure that if they do sell the domain, that there's some sort of provision to provide a link to your "new" domain name (for at least 6 months), so that your customers can still find you.

I'd state a real-estate size (say, 30x300 pixels), placed at the TOP of the page, saying something like "Looking for Hillside Consultants? We've Moved to www.wearerichnow.com". This way, you don't annoy your existing customers that are accustomed to finding you at your old location.

MadCow.

Some Caveats

[Anonymous Coward]

I've sold a couple of domains, including, just before the dot-com boom really took off, one for $36,000. (No, I'm not a squatter -- every domain was actually in use before it was sold.) Anyway, here are a few things I've learned along the way:

• Don't take their first offer. Particularly if the buyer is a large corporation and you're a private individual or a small company, they're going to try to lowball you, thinking you don't know what it's worth (which you probably don't).
• Do some research up front on who might plausibly be interested in the domain name, even if you've already got an eager buyer. That way if they try to intimidate you into accepting a low offer by insinuating that they could take it away anyway via some trademark or trademark-like action, you'll be able to immediately respond with a list of other parties who could make similar claims (which definitely blunts any such action).
• Make sure you have an agreement in writing about the transfer, and get it reviewed by a qualified attorney. Registrars like Network Solutions screw domain transfers up all the time, and without a written contact you could suddenly find yourself without the domain name or the money.
• Make sure you're dealing with someone who has the power to complete the deal. Marketing people can get very excited about getting a domain name, and can sound very official when negotiating to purchase it, but there's a good chance that they have no power to actually sign a check.

Like alot of business deals, if you're careful and the buyer is sincere, everyone can walk away from the table with a big smile, but with something as intangible as a domain name it pays to be very careful when completing the transaction.

A good domain name is subjective

[mutt lynch]

All that matters is what the purchaser wants to pay. I mean, five years ago slashdot.org was probably dirt cheap. Now is another story.