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What Is a Reseller Market?

Posted on 05 March 2014 by Andrei

After reading some of the comments that have been posted yesterday (when I asked for which new gTLDs there will be reseller market demand), it’s clear to me that this topic deserves our attention.

Some domainers think that we only have a reseller market for an extension if there is a lot of liquidity. I disagree.

Sure, the more liquidity the better but this doesn’t mean that we can *only* confirm the existence of a reseller market if there is a lot of liquidity. We can have moderately liquid reseller markets or why not, even relatively illiquid reseller markets.

To explain this, let’s take a look at the dot com extension.

Is there liquidity for *all* dot coms?

Of course not.

Try selling a six letter dot com (random example) on the reseller market and let me know how that goes :)

Even when it comes to the Internet’s #1 extension, liquidity only exists for the best domain. Now sure, the pool of “best domains” is certainly bigger than with dot net for example, just like the pool of “best domains” is certainly bigger with dot net than with dot info and so on.

Should we therefore say that dot net doesn’t have a reseller market?

Of course not!

It definitely has one but of course, a smaller number of domains are considered investment grade.

For example, while all quad premium LLLL dot coms have reseller market value and liquidity, the same thing cannot be said about LLLL dot net domains. However, there’s definitely demand for let’s say LL dot net domains, one worder dot net domains and so on.

… I’m sure you get the point.

The more successful an extension is, the greater the pool of “investment grade” domains will be.

Maybe for some of the new gTLDs, there will be no or almost no investment grade domains.

Maybe for other new gTLDs, there will be almost as many as for dot net.

I don’t know at this point, neither does anyone else.

The market will ultimately decide which extensions are better in that respect and while we can indeed make more or less educated guesses, it’s beyond the scope of this blog post.

Today, I simply tried to explain that the “definition” of a reseller market is actually quite permissive. We don’t need a lot of volume/liquidity to accept the fact that a reseller market exists and for the most part, I’d say that as long as there’s domainer demand for certain terms within a certain new gTLD, we can safely say that a reseller market exists.

Maybe not a highly liquid one (again, this will differ on an extension by extension basis) but a reseller market nonetheless.

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4 Comments For This Post

  1. Equalizatore Says:

    Tying down to your comment from the other post, take a look at who are the buyers for the SCARCE yet highly touted and reported “new gtlds sales”*..
    Does a stinky $500 USD…1000 USD…750 USD Flippa/er sale deserves an article?
    consider cost both monetary plus man hours…
    now what was the profit? …is this a viable business model?

    Definition of ‘Liquidity’

    1. The degree to which an asset or security can be bought or sold in the market without affecting the asset’s price. Liquidity is characterized by a high level of trading activity. Assets that can be easily bought or sold are known as liquid assets.

    *Strangely enough thedomains choose to ignore and not report the hottest domain news in the last year: the sale of the hand regged Whisky.com for 3 MM…
    Why?
    No wonder why is losing readership.

    Although the number of registrations don’t really matter (look at the 1 Million .mobi domains ) it is quite obvious the general public is NOT interested.

    400 .photo domains registered? Good grief!

    The writing is in the wall!

    Thanks for the space.

    Gratefully.

    Trixie.

  2. Andrei Says:

    @Equalizatore: the liquidity issue is also very important but in my opinion, a reseller market can exist even in the absence of impressive liquidity levels.

    Even the best dot coms are considerably less liquid than let’s say stocks. With stocks, you can sell through your brokerage account within seconds, whereas selling even the most liquid dot coms (LLL dot coms, NNN dot coms and so on) within seconds after you decide to do it is definitely impossible.

    Does this mean the domain market doesn’t exist?

    Of course not, it simply means it exists but that there’s less liquidity than with the stock market, for example.

    The same principle is valid when it comes to the “new gTLDs vs. dot com” comparison as well.

    Will there be less liquidity than with the dot com market?

    Sure but it doesn’t mean there won’t be a reseller market :)

  3. Equalizatore Says:

    agree but…

    The questions should be:

    Who will the (Fools be) buyers be?
    and
    What are their intentions?

  4. Andrei Says:

    @Equalizatore: as a domainer, selling to an end user is of course the ideal scenario but at the beginning, we will probably not have any significant end user sales data when it comes to new gTLDs, so people will most likely buy based on the expectation that end user interest will eventually appear.

    Of course, should that happen, reseller market prices would go up for that specific new gTLD. Therefore, the reward will be substantial if you make the right acquisitions but the risk factor is high as well since right now, you are buying without having end user sales data at your disposal.

 
 
         
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