It’s a sellers market for domain names, and here’s why

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It’s a sellers market for domain names, and here’s why

Sellers market?

Just a few years ago the domain name investing had many buyers both on the investor side, as well as the end user side of the business. Clients would speculate on the next big thing, or dream big about an idea they had for a product or service. They’d acquire a domain name with the intention of holding for a period of time-where then name in most instances would appreciate in value.

After the slight dip in domain name investing; post-2008, the domain market was bustling along with many opportunities. The market was dominated by buy requests. Most of the seller’s remained passive in proactively marketing their inventory, mainly focused on the inbound.

We saw a major influx of new domain name inventory hit the market in 2014 when the first strings of Gtlds began being introduced to the marketplace. Coupled, with new apps and a growing mobile base makes the domain business a little more challenging.

Over the past few years, we see a steady uptick in a seller’s market. Clients that typically lay-low for the long term are now slowly introducing inventory into the market. Pricing has remained stagnant with little increase unless it’s a specific buy request seeking a specific name.

According to Verisign, the Internet grew to 334.6 million domain name registrations in the third-quarter 2016 with more than 143.2 million containing the .com.

Why the current trend?

Quite simply, supply and demand. Tons of inventory tend to drive down the cost as demand remains stagnant. It’s always important to turn over your inventory and to remain active in the domain name market. As a result, domain owners increasingly grow antsy. They might want to use the funds from a potential sale for another safer investment.

 

How do we buck the trend?

Invest in sustainable domain names. Find a niche or asset that interests you. Invest in names that can become something unique. Find a domain name that is short, and memorable and most importantly secure the .com. Find a suitable domain name that adds value and long-term potential.

Eventually the market will rebound, and quite nicely. We will see some of the GTLD’s die a miserable death and fade away-as the market always has a way of correcting itself. To date, there are more than 3.5 billion people on the Internet, or roughly 40 percent of the world population online. Back in 1995 it was less than 1 percent.

It’s always important to invest wisely and choose domain names that make sense both for the short term and long term. With roughly 60 percent of the world’s population “disconnected” it’s fair to expect continued long-term growth potential.

 

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