It’s the IDEA that Determines Domain Values. Your Job is to Extract that Value.

Morning Folks!!

The value of a domain is in direct proportion to the idea and business behind it. Very simple. One guy wants to have a business with a total annual sales of $50,000 and one guy wants to run an empire worth $500 Million. Do you really believe the domain has the same value?? Get off of it.

I have long been on record saying that the valuations out there are all a farse. Period. They are simply a great business model for the owner and for people who don't know any better. Nothing wrong with that, but it has no value. See how I make friends. I say something factual or state my strong opinion and of course it offends everyone in that business and half of those that actually paid for one of those worthless appraisals that can be waived in the face of other folks that know even less.

But what is my choice? Insult you and blow smoke up your ass?? My soul is not for sale.

You have a unique asset. Somebody else wants that unique asset. Your JOB is to extract as much value as possible and do it not by looking at yesterday and last year but looking forward 10 years. If th buyer does not like that....move on!

One guy spends $1000 a year on advertising and another spends $1000 a SECOND on advertising. You don't think information like this is valuable? You don't think this has a direct value on your asset? If you are afraid to ask questions, you are afraid to make the big money. Folks that want YOUR asset MUST overpay by definition. You don't have to agree. But you will leave a lot of money on the table.

So answering an email without an offer and looking for a 'Deal' or a 'Reasonable' price on your domain is just going to be a waste of your time. Eventually you will figure it out, but you will waste YEARS of your life in the process and you will handicap your business and growth. There is no LAW saying you MUST answer every email. It is not rude because you are not obligated to waste your time or even answer.

In FACT, I answered only 8 of those inquiries last month. Why? I READ their words and their words usually tip off who is who. Look for the keywords. Anyone with an appraisal whether buying or selling is automatically eliminated. The chances of extracting his head from his ass at that point is a near physical impossibility.

There are emails that casually are interested in your domain. There are emails from other domainers. There are emails from end users. There are emails from brokers. There are emails from lawyers. There are emails from representatives. There are emails from jerk-offs. There are emails from folks with an agenda. There are emails that set a trap. Do you know the difference between these types of emails and more?

That is just the first layer. Then there are a host of other CLUES that tell you who you might be dealing with. Value is based on their idea and your circumstance. If there is no circumstance the value is going up because you have no motivation to sell. Put Proctor and Gamble as the owner of my domains and see the difference in response. Price. Interest.

If you are young and in good health, time is an ally in this business. The game has changed. The model has changed. but these changes are predictable as things evolve. Domains are the center of Internet evolution. When a company has a great success on the Internet they have demonstrated that they would like better more high profile domain names in a lot of cases.

Nothing remains the same as it was yesterday. But as long as you deal with meaningful quality domains you will be safe.

Have a GREAT Day!

Rick Schwartz

20 thoughts on “It’s the IDEA that Determines Domain Values. Your Job is to Extract that Value.

  1. Domaintycoon

    Thanks, very well said.
    Just One Domain Idea can make you Rich?
    Think about if you had the first idea of the Domains below:
    Or something like
    How about The rest is history.

  2. Aggro

    How do you respond to brokers?
    Plus, I take it you just reject or never respond to the Godaddy ‘Domain Buy Service’ emails..?

  3. Altaf

    Hello Rick,
    Greetings. Thanks for a nice post. What did you mean with”One guy spends $1000 a year on advertising and another spends $1000 a SECOND on advertising.” Should we spend a lot on advertising? Will it be worth spending on worthless name or extension? Gratefully,

  4. Leonard Britt

    As I am now developing a local geo domain, it turns out that the development costs (including my time) are running into the thousands of dollars. That is likely common for any website project done by someone who isn’t a domainer. So I would agree selling a search-phrase keyword domain for a few hundred dollars just because the buyer thinks all domainers are squatters is likely undervaluing your asset.

  5. Louise

    Hi Rick, I challenge you to leave this post.
    Talk about idea, is a name which time is still to come. Mobi-, smartphone-, pda-, mobile-, portable-, and handheld- domains are registered across popular terms. It sets up .mobi extension to have a resurgence. Advertising firms are consolidating, seeking cheap methods to piggyback original app and content so as to deliver targeted ads and coupons to mobile users, which number is expected to explode with the popularity of new devices, such as the tablet.
    You were smart to acquire It looks like a matter of months before .mobi gets a resurgence! Mobi has a new application of a company’s mobile content, which every brand is going to have to invest! See: Apps are in demand!
    In retrospect, was a smart investment, and you got out because you got impatient!

  6. Owen frager

    .mobi is was and will never be.
    Unless it’s built around a brand ie equals franchise, tv ads, branded vehicles, uniforms, kiosks
    And that ain’t going to happen either so far hasn’t even happened on a dotcom

  7. Louise

    BTW, would like to qualify my take on Scwartz investment in said the destitute person to the millionaire.

  8. Louise

    @ Owen, Glad your comment is here for posterity, when .mobi takes off, it will be a reminder!

  9. domain guy

    domainers should take note that rick hedges his bets.rick identified 10 domains in the .mobi suffix that could have value purchased, financed and managed these domains. rick took a risk and missed the boat. then rick registered 2300 .co suffixs and does not even believe the .co suffix has value. but is still in the .co space.
    what you see here is an entreprenur at work, risking money,mangement and advice in full public disclosure.the idea behind this article is the value of the domain is in direct porportion to the market behind the domain.for the record domain guy would never reveal anything
    that was learned in the shool of hard knocks.

  10. Altaf

    IMO .co will have same fate of .mobi. Good Luck to those domainers having them. I still remember one line from Rick. Some ext. cannot be found in the radar.Will .co be seen in the radar?

  11. Amanda

    @domain guy”The value of the domain is in direct proportion to the market behind the domain.”
    Very well put.

  12. Robert Haastrup-Timmi

    Hi Rick!
    Again you are never afraid to speak your mind kudos! Kindly allow me to make a small contribution to this thread.
    I love your inference to looking 10 years out, as this is partly the true meaning of”Investments”. The problem is, most people are very impatient and really don’t understand asset growth and future valuation. I agree a lot of domains are worthless, however a considerable percentage of domains have deep intrinsic value and long term asset growth, backed by the market that sits behind them. If you are lucky to have one of these domain names, my advise is don’t get taken in by short term broker mentality. Every asset class has appreciated exponentially throughout human history period.
    If you bought only $1000 worth of Disney shares in the 60’s, your assets are now worth a million dollars, hence the business behind your investment. Even if you own a dilapidated property in Manhattan or Knightsbridge in London, your property asset bought 10 years ago has appreciated exponentially without doing anything! If you impeccably acquired a Picasso or Monet painting decades ago, your piece is probably now worth a mint! Remember Apple shares were in the dumps 10 years ago? now they are worth a mint if you held on. I honestly believe”slow and steady always wins the race” Valuable domains with a tangible market behind them are no different than all other asset classes.
    If you are desperate, then sell for whatever a broker says it is worth. If not hold on to your guns, bide your time and participate in the future of online Real Estate as technology completely changes human behaviour, work and play. Has anyone here heard of”Crowdfunding” ? just another concept that is changing human behaviour and can compete with future bank lending within 10yrs. is Wikileaks a new kind of media journalism, how about Group Buying? You start to get the picture of why your assets are going to be worth a lot more in the future.
    One last thing, anyone born in 1995 when the internet just got started will be 25yrs old in another 10 years, all they will ever know is what happens online… think about that very carefully as Rupert Murdoch does and he’s in his 80’s lol!…. most of my mates in their 20’s hardly ever watch TV or buy newspapers, they watch you tube or get their news through friends on facebook! Online is the future, even Groupon had the balls to walk away from $6 billion…be patient and enjoy the future value of your domain assets.

  13. Domaining365

    The principal of saying no, or ignoring wasteful correspondence that doesn’t bring you closer to your business objectives, is something every business owner needs to learn the hard way. I’m glad I internalized that in a different business environment and didn’t have to learn it as a new principal for the first time as a domainer.
    As you so aptly put it, none of us are obligated to waste our time.

  14. Danny Pryor

    LMAO @”the chances of extracting his head from his ass …”, etc.
    It’s called”inverted cranial proctology,” for those clinically inclined among us; yep, the appraisals are pretty useless, as are those sales comparisons on some sites, referring to 2004 and 2005. What are we into here, a time warp?

  15. Myka

    A domain name can have an impact to your starting website or blog. It helps build credibility on your blog. You should select a domain name that has the ability to enhance the branding of a product, service, or business. What’s more is that it can improve your search engine ranking. I’ve found a site that can help you in generating a unique domain name.


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