Hate Domain Speculators? Here's a Few Reasons You Shouldn't.

The next time you find yourself bemoaning the fact a domain speculator owns a domain name that you want, think again. It’s far better that a professional domain speculator owns the parked domain than it is sitting dormant with a mid-to-large sized company. Here’s my take on why…

First of all, the reason most domain speculators or "domainers" own domains in the first place is because they are hoping to sell them one day. If you contact them and are willing to pay fair market value for their domain name, then chances are you will get a quick response (often within hours) and can sew up a deal within days if not a week.

In fact, millions of domains owned by domainers are available for instant purchase at a fixed price, meaning you don't even have to go to the trouble of contacting the owner or negotiating with them. If you are comfortable with the purchase price you can simply whip out your credit card and buy the domain name on the spot. You will probably have it within days if not hours.

Now contrast this with a domain owned (but not used) by a mid-to-large sized company. First you have to figure out who the right person at the company is to speak to about the domain. It could be their head of marketing, the IT person, the in-house lawyer, or even the CEO. Once you've figured out who you need to speak to the next hurdle is getting through to them. That can take weeks.

Many times these large companies aren't used to being asked about purchasing a domain name they own. It confuses and puzzles them, and this will lead to them needing to have lots of internal discussions and meetings. Finally, and typically weeks or months later, you may get to the point where you are able to negotiate on price, and this is where things can go really wonky.

Unlike domainers, who buy and sell domains all the time and know what a comparable domain might realistically sell for in today’s market, the folks at these companies often have unrealistic expectations of the value of their domain, simply don't know any better, or just cannot be bothered to engage in a discussion about selling the domain for less than a six-figure price, even if a domainer would happily sell the same domain for four figures. It's just not worth their time.

Don’t get me wrong. I empathize with the folks at these large companies, I enjoy interacting with them, and I understand why they often take the approach that they do. In fact, I would probably do the same thing if I were in their shoes, especially if I didn’t know much about the secondary market for domain names. But when you step back and look at these two scenarios objectively -- a domain owned by a domainer and a comparable domain owned by a large corporation -- I’d bet that in almost every case the domain owned by the domainer can be acquired for at least half the price and a quarter the time.

When I am looking for domains to buy on behalf of my clients in my role as a Buyer Broker at Name Ninja, I love it when I discover that the domain is owned by a domainer, and I shudder when it is a large corporation. I know what the implications of the latter usually mean to my client's budget and timeline, and it is not pretty.

Remember this the next time you are griping about domain speculators; they are probably the least of your worries. If a Fortune 500 company owns the domain you want, now that’s when you should be afraid, be very afraid...

Comments

[Gaurav Kohli]

Great point to bring up Bill!

If you look at it from the point of view of the company that holds the domain you want, I think they find it strange that somebody would approach them for a domain name they own.

More than that, they find it difficult to deal with individuals & that's where a domain brokering company needs to step in & establish some credibility in the interest in the domain name & catalyse the negotiations.

[MS]

Wouldn't it be altogether better if said domain were sitting on the shelf of the registrar itself for $10 instead of being held for ransom by a domain speculator?

[nobody]

MS, you do not have an idea what you are speaking about. Good domains would never be available in the first place. either another end-user owns them from who you'll hardly ever have opportunity to buy or a domain speculator. remember the domain would never be available, it's 2013 for Christ's sake!

[Tomas]

Nice article!

[Edgar Waters]

Also interesting to note that of the over 100 million .com domains currently registered, about 70% of those are being PPC'd by speculators that are trying to offload them for ridicules prices that will never be met. Since these speculators pay a low yearly registration fee per domain i.e. $8.03, the money they earn from parking these domains offsets their costs meaning they can afford to sit on an unfairly marked up doman indefinitely until some uneducated sucker nibbles on the line and gets dragged in.

[Bill Sweetman]

@ Edgar Waters, thank you for your comment. The domain speculators who read your comment will get a chuckle out of it. Domain parking is no longer the cash cow it used to be. The vast majority of domains owned by speculators do not recoup their registration fee via parking. Those days are long gone, and that is why domain speculators are really focused on sales these days *and* have generally lowered their prices. Their parking loss is your (the buyer's) gain.