How much to pay when acquiring a name?

[Skinny]

Hey guys,

This question is probably not the easiest to answer, but I thought I'd ask it anyway.

When acquiring a name how can you reduce the risk that you are overpaying for a name.

Obviously, you wouldn't want to lowball the owner, but at the same time I don't want to pay $2k for a domain that isn't even worth that.

How do you know that you are getting a fair deal when purchasing a domain so that you leave yourself enough room for a good profit when flipping the name.

I haven't done many acquisitions so any help in this are would be much appreciated.

Skinny

[Adam Dicker]

Only pay what you feel the name will be worth to you after development or what you feel you could flip it for and make a profit.

If none of these scenarios exist, why buy the name?

-=DCG=-

[Skinny]

Thanks Adam,

I agree, one really shouldn't buy a name unless you intend on development or resale.

or what you feel you could flip it for and make a profit

This is more of the question I have. Experienced domainers can trust their gut better than I could probably trust mine being less experienced.

Was this simply learnt by trial and error or through studying DNJournal or watching trends?

e.g. if I want to buy a generic 2 word domain for the purpose of reselling it what do you take into account?

Number of End Users?
Number of Companies Advertising for Product/Service/Term.?
CPC of term?
Number of Exact Google Keyword Searches per month?
etc.

and than come up with a figure you are willing to pay using those numbers or facts.

Even then you may overpay for feeling that a name is more valuable to an end user than it really is.

Skinny

[Adam Dicker]

Even then you may overpay for feeling that a name is more valuable to an end user than it really is.

I have overpaid many times for a name I wanted.

-=DCG=-

[peter]

I, too, have overpaid for a name I really wanted a couple of times. I think that as long as you learn your lesson and feel that shame (toward yourself for making a bad decision), you will quickly get your inner appraisor in tune. As long as you don't go belly up constantly overpaying for mediocre names, I think you should go for the names you simply have to have. In my case, for long term development purposes. A lot of domainers seem to only be paying lip-service to the "quality before quantity"-mantra found everywhere on this forum.

[Adam Dicker]

Luckily I have underpaid way more than I have overpaid

-=DCG=-

[peter]

Luckily I have underpaid way more than I have overpaid

-=DCG=-

I never thought anything else however, to determine over/under you also need to be able recognize the true value of the name in question.

[katherine]

I too have overpaid for domains a few times. Overpaid is relative, it simply means it will take more time to recoup the costs.
Also, any domain being available for sale (or dropped) is a one of a kind opportunity. No guarantee it will ever be available again.

I think any name you buy should be acquired on the basis it might never sell, and you should be prepared and willing to be the end user.

[Johnn]

Don't sell it at cost or below cost.

[WeBuyThe.Com]

You can always ask someone for an appraisal or for their opinion of the name prior to making the purchase.
Feel free to PM us if you wish.

[CureCancer]

what you appraise a domain does not match the appraisal of the seller... so if you can't afford it then you can't have it! That simple. The price is right when the seller is happy not the other way around.

[james2002]

Try to look at similar domain sales, exact searches and advertising CPC etc.... Also estibot might give you some quick appraisal even though you can't rely on it too much.

Then usually gut instinct is right.

[krossat]

I always think I overpaid, and got underpaid!