Selling your domain names on a venue with a fixed, “BIN” price opens up a can of worms.
Not only you’re disclosing the price to the public, particularly on Sedo, but you’re also risking getting much less money that what the domain might be worth.
Setting a BIN price supposedly generates more sales that close quicker, as the buyer knows in advance how much they have to ‘pony up’ for the domain name. They can also make a usually irreversible decision on the spur of the moment, buying the domain with one click. I know, because I’ve done that, but the amount involved was within my budget.
The issue is with the buyer that has a large or even ‘unlimited’ budget, large corporations that need a particular domain name to roll out a product or service. Such buyers will gladly pay less, as opposed to more money, but in the process the seller loses out a substantial advantage they might have; that, of negotiation.
In a case that is as fresh as yesterday, Microsoft rolled out HoloLens, a revolutionary pair of goggles that will transform the way we interact with computers. They acquired the domain HoloLens.com using a third party “proxy” service, Marksmen. Nothing wrong with that, except they bought the domain on the spot as the seller was offering it for $6,750 at Sedo.
When pressed for time to roll out a product, a company will most likely negotiate up versus down. This is not ‘extortion’, it’s the ability to sell a domain based on its demand characteristics, and in this case the buyer – Microsoft – would have not blinked twice at a price of $150,000 or perhaps more.
That’s why setting a BIN price for your domains is not something I’d advise you to do, unless you’re 100% content with the money you’d receive.
On another note, it seems that serial spammer / “domain broker” that uses fake gmail profiles to spam dictionary domain owners is at it again. Waiting for them to slip up as they did before. You know who you are.
Hi Acro
Your post is not for every domain seller.
If you have one or maybe only a few very valuable domains it would make sense to
leave them un priced and hope for a big offer. I call this the domain lotto.
However if you own hundreds or even thousands of domains it is smart to use
previous sales as comps and price your domains with a BIN accordingly.
I work with some of the most successful domain investors and I can tell you that
most will provide price upon request without an offer as well as having domains
they feel are worth less than $10,000 listed with BIN.
I can also tell you that BIN vs make offer has been tested on a large scale with huge
portfolios and the end result is the BIN domains outsell the make offer domains
and generate more revenue for the seller.
In most portfolios 90 % of the domains are easily replaced at auctions and on the
drops. These are the types of domains you want to move quickly at market value .
The other 10% are the high value domains that should remain un priced.
Sell the domains in the 90% group to generate enough revenue to add domains to
the 10% group. This model is working for large and small clients of mine.
Either way I look forward to hearing about your next six figure sale.
Theo..
keep in mind though that corporations such as Microsoft are usually professional enough to come up with a list of potential product names, during that process also weighing in the difficulty/costs to get each of those names as a domain (besides marketability, brandability etc..)
Had Microsoft for example noticed that HoloLens.com belonged to a developed website/real company operating under that name we might very possibly be reading about a HoloGlass or HoloGlasses instead of a HoloLens right now..
Brian – The majority of domain sellers are not ‘large portfolio holders’ eager to utilize a domain broker that manages their tens of thousands of domains. It’s common Joe Domainers listing 100-500 domains on various venues, such as Sedo, TDNAM and Afternic, or on forums etc.
You got too defensive there, it seems. At any rate, I’ve found from experience that the majority of sales could have been much bigger when no BIN is involved. Have you seen the average sales price on Sedo these days? Sure, they sell volumes of domains but the median price is at $2k at the most.
On the other hand, using for example Domain Name Sales with an offer/counter-offer system leads to considerably larger sales. I’m not saying that, Frank Schilling said it, and I can confirm it.
So far my largest domain sale was in the mid five figures; I will let you know when the big one happens, and it won’t be through a BIN.
Daniel – The domain was listed with a BIN, which as opposed to “make an offer” puts the seller at a disadvantage. Anyone, from a guy with $7k in hand or a megacorp like Microsoft, could walk in and click the BIN button, and they did.
Negotiating with a buyer once you’ve done your due diligence is the key to success in every domain sale.
Theo – my point was that Microsoft could have weighed in exactly that fact (of the domain sitting available for $7k) into their product naming decision process.. nothing more, nothing less..
would their product stil have been publicly named “HoloLens” if this were not the case, we can only speculate..
I decided to use BIN on very few of my domains.
The ones that I already have a buyer for and the buyer is stalling and not pulling the trigger. 🙂
Daniel – I’m not sure how long the domain sat there with a BIN for Microsoft to ponder over, but it would have made no difference, IMO, if it said BIN: $100,000.
Since the seller did not solicit offers but set a price, that number was the selling price. The process of product naming does not happen overnight, and I am certain that Microsoft decided on the name independently of the domain’s price.
On another note, I am getting inquiries on a handful of “Holo” domains I’ve registered years ago and rest assured none has a BIN price set. 😉
Unfortunately, I had a bad experience with Sedo. Well, I suppose you can call it, “user error”.
I was in a rush to add a lot of 10-15 domain names mobile at one time and went through the process. Next, next, next, etc.
What I didn’t realize, until of course I got the email that a domain name had sold months later, was that I entered the automatic appraisal BIN of mid 3 figures and never changed this manually.
It hurt me inside a little bit, but I did learn my lesson to do due diligence when adding names to marketplaces.
Either way, I was mobile at the time when I got the alert and it paid for my Red Lobster, so I was quite satisfied after a couple Americano drinks (the only decent American food you can get in Okinawa, Japan). Of course, I didn’t have to follow through with the sale, but it was my obligation to do so.
I do believe that if a BIN wasn’t set that it could have gone much higher, like others.
As far as corporations selecting a new name out of the blue if the .com are taken, I don’t believe that would happen in my opinion. The names are selected, written into marketing plans, etc. It would be more cost effective to buy at the $150,000 stated price; negotiating, than to redo an entire marketing plan as the name is embedded everywhere in it already (and no, I don’t believe it’s as simple as Find + Replace).
Acro is right. I had similar experience with Bridgestone on Sedo.
Sedo tries to commoditize domains. No serious domain investor sees his domains as commodities. He sees them as assets.
Timing. To most, that name was worth much less than $7k a week ago. Suddenly, you have a buyer that is in a must-have situation. Happens every day.
It’s ok to price a domain, but go ahead and price with the idea that at any moment “the best possible buyer” is knocking on your door and they want your domain .
After all, if you don’t have a BIN, at some point in your negotiation, you’re going to give them a price right ?
. . . Price it and be realistic. Not every name is even remotely possible to be a name Google/Microsoft/etc would want. The big fish aren’t going to want your “geoservice.com” domain. They’re not likely going to want your adult name, typo, etc.
Each name has a likely candidate buyer and you have to figure that most of those buyers have a somewhat limited budget, especially stacked against alternatives. . . .Check the comps in that category. Be realistic about where your name fits in comps. A lot of people think they’ve got a gem when in fact their gem is very replaceable. Maybe your name is in fact “one of a kind” but be realistic when evaluating .
I know. It’s a lot to ask a domainer
Adam – Great advice, thank you for taking the time to share it.
An older explanation from 2011 😀
http://acro.net/blog/domains/fixed-price-listings-at-sedo-it-doesnt-work-for-me/