Should You Price Your Domain Names?
Domain investors have a tough decision to make when it comes to their domain name pricing strategy: should they set a price for their domain names now? Or leave them unpriced and wait until they get an inquiry on the domain?
The decision is often referred to as ‘Buy Now’ vs. ‘Make Offer.’
Setting a ‘buy now’ price means listing the domain for sale at a certain price that a potential buyer can see when they search the domain. Alternately, ‘make offer’ means that the potential buyer either has to provide an initial offer on the domain themselves or they need to contact the owner to get a price quote.
Let’s take a look at the pros and cons for each of the domain name pricing strategies.
‘Buy Now’ Pricing Strategy
Setting a “buy now,” or fixed, price on a domain has a lot of benefits. Here are some of the advantages of this domain name pricing strategy:
- More exposure – Domain names with a fixed price qualify for added exposure on domain name aftermarket services such as SedoMLS and AfternicDLS. Both of these marketplaces will syndicate domain name listings to other domain name registrars and marketplaces if they have a fixed price. This puts the domain in front of a lot more potential buyers. Domains without a fixed price, meanwhile, are shown on fewer partner websites.
In fact, domains listed with a fixed price can show up directly in the registration process when someone searches for a domain name at a registrar such as Namecheap. This is great exposure and makes it easy for people to buy the domains.
- Fast transfer – Aftermarket systems such as Sedo and Afternic provide an automated way of transferring a domain name from the seller to the buyer. The only way for this process to work is if the domain has a ‘buy now’ price.
Without fast transfer, sellers need to manually transfer a domain name to a buyer. This is a time-consuming and often frustrating process.
- Higher sell-through rate – Domains with a ‘buy now’ price sell at a higher rate than domains without prices. This is because priced domains remove friction from the buying process—a domain buyer sees the price and can instantly purchase the domain without negotiation. This allows the buyer to get back to the important tasks of running their business.
According to Afternic, listing domains without a price drops the sale rate by over 65%.
Make Offer Pricing Strategy
While there are clear benefits to pricing domains, there are also benefits to leaving them as “make offer”.
- Less time upfront – Setting prices on every domain in a portfolio is a lot of work. By opting for ‘make offer,’ a domain investor can wait until someone inquires about a domain name before calculating a price.
- Researching the buyer – Domain name investors often research who is buying a domain name to determine an asking price. Rightly or wrongly, an investor will ask a Fortune 500 company for more money than they would an individual or small startup. You can’t research a buyer if you set a fixed price; if the buyer has to reach out for a price quote then the investor can usually ascertain something about the buyer’s identity.
- Respond to market changes – Some terms become popular due to changes in the market, new product names, etc. For example, domains with coin and crypto in them suddenly became more valuable as cryptocurrencies took off. If a domain name is priced before the keywords in the domain become popular, a buyer can swoop in and buy the domain at the below-market price. If the domain is set to ‘make offer,’ then the seller has time to research the current value of the keywords and price the domain accordingly in response to a purchase offer.
- The buyer might offer more – No one likes to leave money on the table. A fixed priced sets a limit to how much an investor will sell a domain for. With ‘make offer,’ it’s possible that the buyer will suggest a price that’s higher than what the investor would have asked for.
- A more consultative approach – Fixed-price transactions are simple. ‘Make offer’ deals instead open up a consultative process. The domain investor can work with the buyer to explain the value of the domain name and why it’s worth what it is. They can also do a creative deal involving equity or a payment plan rather than cash up front.
- Doesn’t scare away buyers – If an investor asks for $5,000 and a buyer will only pay $3,000, the buyer has no choice but to walk away from a $5,000 ‘buy now’ price. A ‘make offer’ listing opens up the opportunity to negotiate a deal below the fixed price that both parties are happy with.
A Hybrid Approach
Whether to set prices or not depends a lot on the investor’s portfolio. If they usually sell domains for under $10,000, ‘buy now’ prices make sense. If they have a superb portfolio of six-figure domains, then negotiations will almost always be necessary.
A good approach is to segment a portfolio by the type of domain. Domains that sell for under $10,000 should be priced to give them maximum exposure in the domain name aftermarket. Domains worth more than $10,000 can be unpriced as long as there’s an easy way for buyers to contact the owner to start negotiations.
And $10,000 is a somewhat arbitrary figure. Domains frequently sell for fixed prices above $10,000. But it’s a good starting point.
Ultimately, it’s up to each domain investor to determine what is most effective for them. The good news is they can constantly test to see what works. A fixed price today can be removed in favor of make offer in the future and vice-versa.
Have you purchased a domain lately, or do you sell them? Which domain name pricing strategy do you prefer? We’d love to hear your opinions in the comments.