
Just made a 100K offer for a domain. Am I crazy? - aabbaabb
My partners think I am, they say no domain worth that much. What am I missing?
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edent
It depends why you're getting it. What does the word "Amazon" have to do with
selling books? Or "Google" with searching?

Having the "best" name doesn't really help you build a brand.

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kysol
I've always had the opinion: "Let the site make the name, not the name make
the site."

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meric
If you needed to ask, that means you haven't thought it through. If you made a
$100k decision without thinking it through, then yes, you are crazy.

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1123581321
When you buy a domain, you're buying a business on that domain. Like any
business you have to appraise its value and also its potential value less the
cost to realize that value.

So, if the domain is serving $2,000 of ads every year, it's worth $2k using a
common estimation model. You don't want to buy it because it's priced at its
value. Yes, you would have a good ROI if you held it, but the ad revenue isn't
guaranteed, you have transaction costs, annual costs, etc.

If you know you can double the ad revenue to $4k by changing to another
provider or using a proven method of placement, then it's worth $4k to you. If
the seller is still offering $2k, then you have a good deal and you should
buy. If the seller realizes this and raises the price, then you have to decide
how much beneath $4k you need to go to make it worthwhile for you.

If you want to build a business on the domain, then you're pricing the value
of each visitor. Let's say each visitor brings on average half a cent in
revenue: 400,000 visitors brings $2,000. How well will your business convert
these visitors? Say you can convince .05% of them to purchase software at an
average lifetime value of $100 -- that's $20,000 per year in revenue. Of
course you'll need to build a sales site and the product itself. If that takes
$15,000, then the domain is worth about $5,000. It might be worth more since
the product and the site could be transferred to another domain, so possibly
you could pay up to $10,000 or $15,000 for the domain.

These are just considerations - I don't know the numbers for your business or
for the domain you're considering. You would certainly want to choose at least
two domains and play the sellers off of each other. Your math might tell you
that you'd pay $100,000, but market pressure might bring it down to $50,000
anyway.

P.S. If you are buying for the value of the name as a brand, then I think for
that money you should just buy an actual brand.

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brackin
Yes, I paid slightly more than I probably should've for a domain (no-where
near this much but in terms of how important it was) and it'll hinder you from
making future pivots or product changes which could be bad.

When looking for domain names I found one that was on sale for $100k, simply
as a joke I offered $10k and they accepted this. Obviously I don't even have
that but it probably means you don't need to pay so much. Most people look at
how much domains were worth in 2000 and think they can start the bidding at
that price.

If the name is still for sale and they're willing to sell it, it probably
isn't worth what they're asking for it. If you can find someone with
experience in the space that you trust, this helped me a lot. Traffic is also
key in most names, unless they're a short one word .com they aren't worth much
without a lot of traffic.

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ohashi
No right answer to this question. I can definitely see some circumstances
where it would be worth it. Owning the category killer domain can be
incredibly valuable. The brand recognition and instant credibility of a good
domain is also undeniable. Many have type in traffic which means potential
customers looking for that service show up every single day without any
effort. Some search engines also give you an SEO boost for exact match
domains.

Worth 100k? Depends on the name. But I thought after reading all these
negatives, I feel like many of these people haven't actually owned any good
domain names and seen the value that can generated from them.

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pedalpete
What is the long-term plan for your company?

If you are going to be raising investment from Angels or VCs, are they going
to look at your domain purchase and think this was a wise investment? Or are
they going to think you were being frivolous with money?

Will the name actually have a significant affect on your business? You'd be
surprised how many great domains are still available.

Do you think you could flip it? If the domain is only valuable to you, it
probably isn't that valuable. Do you think somebody else would want the domain
if you decided not to use it? Or would your money just be gone?

Just a few things to consider.

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0penMind92
100K is a lot of money for a domain! The name can really build the brand of
the company though. If you're solving a painful problem that people are
willing to pay for, the name in my opinion is irrelevant. If not, the name can
be make or break the business for a unique company. Some of the startups that
I've came across in the past I wonder how they get the domain in the first
place and how much they paid for it. One that really stuck out today was
branch.com. I wonder how much they paid.

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coryl
The name isn't worth that much unless its valuable on its own. Does it get
typein traffic? Does it generate revenue on its own with a landing page or
adsense page?

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ig1
There's not enough information to make a judgement. It's like saying "Is a
house worth 100k ?" - without knowing the details it's impossible to say.

There are definitely domains that are worth millions of dollars, but there are
far more domains that are worthless.

A good point to start is by saying "how valuable would this domain be on the
open market at auction ?"- if you don't know you can get specialist with
expertise in the domain market who can value it for you.

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jamesjguthrie
There's no way I'd pay thousands for a domain these days. There's so many
common TLD's available now that if you can't have .com it's perfectly
acceptable to have another.

The simple fact is that nobody cares any more. It's more common to directly
type the company name in the address bar of a browser than to type out "www."
etc.

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marcusmacinnes
If the 100K investment makes business sense and results in a positive outcome
(profit or increased market share etc), then it's the right price regardless
of whether you could have bought another domain cheaper. Buy, profit, move on
to the next task on the list...

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NonEUCitizen
<http://www.domaining.com/topsales/>

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devb0x
Just 1?

What happens when you want the associated .net or .org? Trademark rights been
checked?

You could've gotten a .com, net, .org and like 10 years registration for each
and been in a good position. And been in a position where you'd still have a
lot of cash in the bank.

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systemtrigger
With all due respect, I don't believe you. Your comment history on HN is
"Should buy the .com" and you have conveyed zero insight around today's
question. I judge you are trolling.

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amikazmi
I know it's not the question, but if you need to ask HN what are you missing,
your partners can't communicate that to you, and they think you are crazy..

You have bigger problems here.

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mcartyem
Being forced to come up with a different domain name can be more valuable than
100K. It could help you rethink your entire approach to the problem you are
solving.

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dear
Unless you have already built a brand name and the domain is your brand name,
100K is TOO TOO much.

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duiker101
well... if you can afford it I think a good domain can be worth a lot...but
remember that there are more important things if you are starting something.

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jmgunn87
yeah you make me sick.

