The Importance of Comparative Sales for the Domain Market

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Using the paradigm of the real estate market to gauge the domain market's performance is a popular method.

Just like houses, condos, and land, the domain market is about exchanging assets that appreciate over time for money. Real estate investors acquire, develop, and flip property.

Does this sound familiar?

Domain investors follow the same example, registering or acquiring domains for profit. Between a domain's registration or acquisition and its selling point, lies a path that includes development, monetization, and leasing.

Domain names represent a class of "intangible assets" with an annual renewal cost. Home owners must pay their property taxes to keep ownership of their property and when the time comes to sell it, these records must be clean or else a liens is placed on the property.

How do you price a domain name?

The rules of the game dictate that short, dictionary .com domains top the price list, just like expensive neighborhoods host the highest priced homes. Realtors don't just pull a random price from a bucket, they study the market, its performance, seasonal trends, and comparative sales.

The latter is an element that domain investors should always study and incorporate in their pricing.

Comparative sales drive fifty percent of a domain's value at a minimum. The de facto rules of pricing apply here, providing a pricing scheme that addresses domains made of keywords that are nouns, verbs, and gerunds.

That's why comparative sales reports are important. Uniregistry, now a GoDaddy company, used to release curated weekly sales reports from its market place, the Uni Market.

Currently, GoDaddy releases monthly reports from some of its marketplaces that include both the Uni Market and Afternic. These reports contain publicly disclosable sales that took place six months prior. While this might not seem adequate to some, it's still a very valuable metric that gauges the sales performance of domain names on the very large GoDaddy marketplaces.

Analyzing these sales reports gives domain investors a good indication of how to price domains of similar quality, keywords, or TLD (extensions.) Naturally, just like every home for sale has its own unique characteristics and overall charm, the same goes for domain names; comparative sales provide a direction and a range, but they are not the complete picture, or a gospel of sorts.

In a nutshell: Comparative sales reports indicate the overall sentiment of the domain market, its volume and trends, and can help provide a valuable metric to domain investors and domain pricing.

The information contained in this blog is provided for general informational purposes about domains. It is not specific advice tailored to your situation and should not be treated as such.

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