I was reading a post Raymond has written earlier today and snoopy made an interesting/valid remark: that 99% of businesses spend 10 bucks on a domain.

Not sure what the exact percentage is but yep, 99% seems about right.

I think this is one of the most important lessons we need to keep in mind: domainers have to stop over-estimating the appetite of end users for domains.

Yes, some end users gladly pay a premium for a high quality domain.

But they’re a minority.

When reading comments on blogs and forums, I frequently notice that end users tend to have a “Holy Grail” aura in the eyes of many domainers.

As if end users are a horde of millions of rich people, with each person holding a huge bag of money in his hands and just waiting for the first opportunity to throw all of that money at a domainer… I wish that were the case 🙂

Realistically speaking though, I think it’s time for a cold shower.

We need to understand that:

1) Most end users aren’t willing to pay a premium for a domain

2) Out of the minority that do, most of them are only willing to pay very small amounts for domains

3) Out of those that are willing to pay a decent amount for a domain, most want dot coms

4) Out of those that want dot coms, a minority are willing to settle for a popular/next best thing TLD such as dot net or dot org

5) Out of that minority, once again only a minority would be willing to ultimately settle for a new gTLD

… it’s very important to understand this state of affairs.

I mean look at some of the big portfolio holders, they have 1-3% annual turnover rates. That’s it. Then look at their average sales prices as well… not exactly amazing.

Being a good domainer isn’t easy and in my opinion, being brutally realistic is a must.

It might suck, but it’s a must.

And the reality is that, unfortunately, end users tend to be more elusive than the average domainer thinks.