Buying an existing domain name doesn't have to cost a fortune
A window on the fascinating world of ‘domaining’
Recently, internet auction house Sedo.com published its Global Domain Report for 2020. As well as describing trends in the market as a whole, the publication provides information about the domain name trading mediated by Sedo. The report makes compelling reading. Because, with roughly 19 million domain names for sale, Sedo is a major global player on a market where good data is hard to come by. Rather than giving a representative picture of the market as a whole, the report is a window on the fascinating world of 'domaining' -- the business of buying and selling domain names. The central take-home point is that transactions of less than $1,000 account for the majority of trades.
Low-value sales dominate
It may come as a surprise to hear that domain names generally change hands for so little money. After all, most sales that make the news involve huge price tickets: when voice.com was sold for $30 million last year, it hit the headlines all over the world. However, the reporting of such mega-deals can easily give a distorted impression. In reality, Sedo says, about two thirds of all domain names sold in 2019 changed hands for less than $1,000. Indeed, 45 per cent of sales were for less than $500. And the hammer went down at more than $10,000 in just 3 per cent of auctions.
Averages and corrected averages
The influence of the top-end sales is emphasised by the difference between overall average transaction values and the average values after excluding outliers. In 2019, the overall average price for a .com name sold through Sedo was $2,693, for example. However, once outliers -- very high and low-value transactions -- are removed from the picture, the average comes down to $530. The corresponding figures for .nl are $1,683 and $776.
|TLD||Average (in $)||Excluding outlers (in $)|
Table 1 - Average prices of domain names sold through Sedo and averages excluding outliers, in US dollars (source: Sedo.com) .
Big-ticket .com sales
As the figures show, a small number of very high-value sales push up the overall average price considerably. Despite falling well short of the sum realised by voice.com, some of the prices paid for .com domains traded through Sedo were eye-catching. In 2019, Sedo mediated the sale of rx.com for $1,000,000 and links.com for $798,000. Further down the list, the prices fall away rapidly, so the tenth highest was a 'mere' $100,000 (for yotta.com). Although the names involved are very diverse, they include a number with betting connotations, such as bettingodds.com, which changed hands for $445,000.
No big prices paid in the Netherlands
A gambling-related name fetched the highest price paid for a .nl domain as well: lootjes.nl was acquired for $29,500. However, given the size of the .nl zone, the Dutch market has a somewhat lightweight big-ticket sector. Number 2 in Sedo's list is a $10,000 sale (sonnen.nl), and the tenth biggest transaction was just $ 3,734 (lwr.nl). There have been high-value trades in the past though: in 1999 voetbal.nl was sold for more than a million. Of course, domain names are also traded privately for unpublished sums and don't therefore feature in Sedo's data.
|Domain name||Price (in $)|
Table 2 - Highest published prices paid for .nl domains, in us dollars (source: Sedo.com) .
From Sedo's report, it's clear that acquiring an existing domain doesn't have to cost millions. Nevertheless, the rate of turnover is very low: in 2019 Sedo mediated 3,000 transactions a month, or 36,000 a year. Even allowing for the fact that, unlike goods, domain names can generate income from advertising and so on while they're 'held in stock', Sedo's data points to very slow market turnover. Download Sedo's full report.