With all the talk this week about whether or not the auction at Traffic sucked, the focus imo should be on the wholesale domain market.
Over the past few years the market has come down on all kinds of domains. Three letter .info,biz and .us are down substantially. There were buyers for these type of names on the forums all the time. Now the prices seem to be a bargain basement pricing, many times reg fee. I am not making a valuation on these names, saying they should have been where they were, just that they are much lower now. Even the price of a three letter .com the staple of the domain wholesale market is lower than in past years. Maybe it was too high in the past and could not sustain its valuation level.
The wholesale pricing for four letter .coms has come down greatly. There are auctions on Namepros all the time that end in the single digits for names that would have got at least $25 to $50 previously. That difference may not seem like a lot but % wise it means a lot for those who spend most of their time buying and selling at the wholesale level.
An extension like .co may make headlines on a blog when there is an end user sale, but there are not many sales taking place at the wholesale level, where its easy to liquidate names on Namepros or DNF.
One look at the fixed price section on Namepros shows very few posts of sold. Now quality is a factor in that too. Maybe there are so many threads on the forum that people have just grown tired of searching through a lot of less desirable names to find one hidden gem.
The wholesale market is needed to provide liquidity for those looking to flip and trade up to buy bigger names. It is also needed to provide some peace of mind for those growing their domain portfolio. Its nice to know you have somewhere to liquidate names fast to pay for renewals or for a new purchase.
Another factor is that many more people own decent names, they don't have to come onto the forums and buy a name for $25 to $100 unless there is great value.
Auctions without end users are basically just the wholesale domain market at a nicer setting than a domain forum. Its still the same thing, and if auction results suck, its more a reflection of the wholesale domain market, coupled with irrational pricing.
The goal is always to find an end user, but domaining as an industry needs a decent wholesale market.
Good article. I pretty much agree with all of it.
I generally deal with end users, not domainers, and the market there is doing fine.
Brad
right on, it does suck. I cannot sell any LLL.us for more than the cost of a cup of coffee.
About time someone said it. There is just no liquidity for ok names. I could sell 20 LLL.info and raise $700 back in 2007, now lucky to raise $200.
DNFORUM.COM is what sucks. It was much more active and sales were occuring but when you have an owner who is stuck up and drives people away from the site it impacts sales.
I think you hit the nail on the head with this blog post. You pretty much have to hold your good names and wait for the end user. And learn to develop some names if you can, to generate more income stream while you wait.