You are asking absurd prices!

Too often it is not clear why one has to pay for an existing domain name. The argument you still hear is that a registration costs at most a few tens, so why do you ask for a multiple of that.

Who does what

This shows that there is not only confusion about the costs and valuation of a domain name, but also about which parties are involved.

Registration costs for a domain name

First, a clarification about the price. For a new name, you pay a one-time registration fee and annual renewal fees. You often see promotional prices for registering a domain name for, for example, 1 euro. After that year, you pay the regular renewal fees. You pay this to a registrar, a party affiliated with SIDN. Directly or through your hosting partner. If you have a website linked to the domain name, you often also pay for the hosting of your website.

Valuation of a domain name

You cannot compare the registration costs one-to-one with the valuation and thus the price of an existing domain name that is for sale. An existing domain name represents a value based on various factors. For clarification, we often compare it to real estate. An existing property in a prime location is worth more than somewhere remote. The same goes for an attractive domain name. And if you cancel the rental (cancel registration), the property (the domain name) becomes available for new tenants, and you pay a fee for that. You are not actually buying the domain name, but you are paying for the use of the domain name.

Owner or holder

Why are you renting the domain name and not buying it? A domain name is and always remains the property of the so-called registry, in the Netherlands that is SIDN. If an existing domain name is for sale, you are not buying the domain name, but the right to use it. You become the holder of the domain name at that moment.

The role of the broker

If the holder of a domain name wants to get rid of it, there are 2 choices: cancel or sell. If a domain name is canceled, there is a good chance that after the quarantine period (the period within which you can retrieve the name), the name will be taken into stock by specialized parties, also known as domainers, because they see value in it. They then offer the name for sale. They do this themselves or outsource the management to parties like Dovendi. To stay in real estate terms: Dovendi has a broker role here: bringing together supply and demand.

The holder determines the price

Back to the title of this article: You are asking absurd prices! Here too, it is easy to compare with the real estate market: how desirable is a property, in this case, how attractive is a domain name. The holder makes an estimate of the value, and the broker takes it to the market. In the negotiation, the broker tries to represent the interests of both parties as well as possible. The broker usually has some leeway, but never determines the price themselves, at most the broker gives advice.

Making the market more transparent

Not everyone is equally happy with this development, but it is part of the market maturing. For .com names, trading is already entirely professional, and the rest of the world is gradually following. For us, there is enough reason to take responsibility to make the trading of used domain names transparent. Given these kinds of reactions that we still regularly receive, it is and remains very necessary.

On our site, you will find all kinds of information and downloads that help you understand the market, the involved parties, and the prices.

We are happy to help you!

Are you a domainer and interested in outsourcing the management of your portfolio, or are you a buyer and want to know more? Feel free to contact us.