Sedo is world’s only global domain maketplace and their Chief Sales Officer, Liesbeth Mack-de-Boer, gave a very interesting speech on the importance of domain names during WebFest.Me. She is responsible for global sales, marketing and global development at Sedo.
The domain industry is big and it constitutes of primary market and secondary market. Primary market is registering new domains and secondary market (aftermarket) is re-selling existing domains. Liesbeth works in the secondary market and she noticed in the past several years is that the difference between the markets is diminishing. The secondary market is expected to outgrow the primary market by 2014.
The markets are connected, so if the primary market is good, the secondary market will be good as well. Factors influencing success of a TLD are the following in the primary market are: quality of TLD, strategy/marketing of Registry (including ICANN contract rules), number of registrations, patriotism (.de, .nl), Internet penetration and Online Media Spend.
Secondary market depends, of course, on the primary market. If all or most of the factors for the primary market are in place, the domain you want to register is probably taken. This is where the trade of re-selling existing domains starts. In order to explain secondary market better, Liesbeth showed us the following video:
Your Startup Needs a Good Domain Name
A good domain name is especially important in the startup scene. Many startup companies had a rule that they are not allowed to spend a lot of money for domains, which is a big mistake. If you have a good name still available, great! But if you do not find a good name that is untaken, do not be afraid to spend some money. A good domain name is important for establishing your presence on the web and for promoting your company.
Good domain names are short, memorable, generic, search term, they do not have hyphens and they are commercially relevant. Example of an amazing domain name: sex.com. Most sales on the secondary market happen for domain names with under 8 characters.
An average price for .com is around $2000, while most sales are $500 and lower. Domain values move up and down with the economy. If you want to invest in domain names, Liesbeth believes now is a good time to do it, because chances are that the prices will go up again, especially with .com.
Of course, when it comes to the secondary market, .com domains are still the most popular ones. In 2011, .com domains constituted 44% of sold domain names. Liesbeth pointed out that .Me has done a GREAT job in marketing and that it rose very quickly to Top 10.
Categories of domain names for resale
When it comes to reselling domains, Liesbeth sees domains in four categories:
- Typos: high traffic, low resale value (Like youtune.es)
- High-trade brand name: high traffic, high resale value (Like sex.com which sold for $13 million)
- Junk: low traffic, low resale value (a-garbage.ws)
- Brand names: low traffic, high resale value (Like vodka.com which sold for $3 million)
There are people who purchase typos are are trying to resell them later, but they usually fail. Typos NEVER have a sales value, never. They are just trying to make make money and it is bad for business. But, of course, they have good traffic. Sedo has a program where big companies like Microsoft can come to them and request the typos to be removed from our system.
Photography by: Marina Filipović Marinshe