Whats missing in the great domain valuation debate?

It is not unusual to find domainers debating on forums and on blogs about the different factors that influence the value of domains and the relative merits of each factor.

Frequently, people try to put together some sort of league table of factors and there is even a list of ‘factors’ on this site.

Inevitably, there will be some argument about the relative rank of each factor. And every so often someone will add in “but of course a domain is only worth what someone will pay you for it!”.

Its not that this is a bad approach and these factors are important. The problem is that there  is something missing from the great debate about what a domain should sell for. There is one factor that is often ignored in the debate.  Its a factor that is rarely mentioned. This factor can make a big, big difference in the price a domain sells for, but is rarely discussed.

That factor is this -

the price you can sell a domain name for will be influenced by your ability to negotiate the best price possible for a domain name.

Think about that for a moment…………..

In January 2008, top domainer and industry expert Rick Schwartz negotiated the sale of iReport.com, a domain possibly worth “four or five figures” for a jaw dropping $750,000.
Or read how a UK based entrepreneur entered into negotiations that led to him rejecting a $57,000 profit.

And remember negotiation skills apply just as much to selling as they do to buying.

There are perhaps three areas that domainers need to have some familiarity with in order to negotiate confidently.

1.) Domainers need to be aware of general market prices of domains and the markets for different types of domains e.g. four letter domains, geodomains, forum domains, generics and so on

2.) They also need to be aware of the future potential of the area / industry to which the domain relates

3.) Domainers need to develop an appreciation of sales and negotiation skills and tactics - others will use them and you need to be aware of what people will throw at you

The need to exploit the full potential from a domain means that the price a domain sells for is influenced by how the various valuation factors stack up and (almost more importantly) the negotiating ability of the parties involved.