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The State of the Reseller Market

Posted on 03 January 2014 by Andrei

This is of course just an opinion but since I’ve been following the reseller market (or the domainer to domainer market, as it can also be called) for many years, I’m in a reasonably good position to share my 2 cents and start the year with an assessment.

As everyone knows, reseller market domain values (just like stocks and a lot of other assets) have been affected by the global financial crisis in a negative manner.

How is the reseller market today compared to the period just after the crisis?

Well, there has been an improvement for sure but we have to understand that comparing the evolution of the domainer to domainer market to the evolution of the stock market wouldn’t be fair.

Central banking policies have helped stocks quite a bit, whereas the reseller market hasn’t received such a boost. Therefore, it should come as no surprise that the reseller market hasn’t picked up as quickly as the stock market.

On the stock market, we had new highs and the same thing cannot be said about the reseller market. At this point, reseller market values aren’t at pre-crisis levels and in my opinion, domains are currently undervalued.

Some types of domains (for example NNN dot coms) have done better than others but all in all, we can definitely conclude that the reseller market recovery hasn’t been as impressive as the stock market recovery. Is this a good or a bad thing? Hard to say.

It ultimately depends on which side of the fence you’re on. As a seller, I’m sure you would have preferred a faster pace. As a buyer though, the fact that domains are still ridiculously undervalued (at least in my opinion) is a good thing.

As a conclusion: there has been a recovery for sure, better for some types of domains and not as good for others but unlike the stock market for example, we aren’t at pre-crisis levels yet.

How you interpret this is entirely up to you. I for one see this as an advantage because I’m bullish on domains and consider them undervalued at this point. If you’re bearish on domains, I’m sure you can interpret the current state of the reseller market differently.

Everyone’s entitled to an opinion, just wanted to start the year by sharing mine :)

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2 Comments For This Post

  1. Domenclature.com Says:

    Andrei,

    I share in your observation.

    We may or may not agree on why.

    The way I see it, ‘domainers’ are fucked!

    The big Registrars, and their insider drop catchers, including the popular big-boy aftermarkets, have completed their cabal.

    The independent wayward ‘domainer’ and their domain blogger counterparts are clueless as they put this together, since the departure of ‘Bob’. The consolidation we saw with the Biggest Registrar, and arguably the second biggest aftermarket was just a tip of the iceberg.

    The die is cast.

    The average domainer is out of the food chain. But they will jollily report on these people’s auctions.

    I say to you, and every domainer, and blogger: USE YOUR HEAD. THINK!
    Give a damn about people who gives a damn about you.

  2. Andrei Says:

    @Domenclature.com: the stock market, for example, has existed for a long time but there are still lots of small players who do very well. Now sure, the big dogs have an edge but there’s still room for smaller players, even after all these years.

    The reseller market, on the other hand, is less than 20 years old and this is a very good thing for the average domainer. Given the fact that the industry is still in its infancy, you can still have an edge as a small player.

    Maybe it’s your background/occupation, maybe it’s your knowledge related to certain industries, maybe it’s your contacts and so on. In my opinion, the average domainer is in a far better position to develop an edge than let’s say the average stock investor.

 
 
         
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