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The SitePoint Market Watch #15 Copyright (c) 2009
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News, Rants and Case Studies for Web Entrepreneurs
by Peter T Davis
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INTRODUCTION - - - - - - - - - - - - - - - - - -
There are a hundred ways you can ask the question and even more
ways to answer it. One of the issues we all face in the
Marketplace for buying and selling web properties is knowing
what you should pay or what you should ask.
In this issue of Market Watch, we'll look at ways to maximize
the price of the web site you're selling. The open auction
format does help with setting market values for properties, but
you can still use different strategies to gain the best price
for your property. I'll also provide some tips that can help
steer you in the right direction.
Hope you enjoy the read.
Peter T. Davis
Editor
SitePoint Market Watch
IN THIS ISSUE - - - - - - - - - - - - - - - - - - - - - - - - - -
- Introduction
- Feature: Your Pricing Strategy
- Tips for Buyers and Sellers
- Featured Listings
YOUR PRICING STRATEGY - - - - - - - - - - - - - - - - - - - - - -
One of the more common questions asked of me is about pricing.
How much should I ask for my site or domain? Is this offer a
good offer? How much should I offer for a web site/domain that I
want to buy? There is no single answer to any of these questions,
but there are some generic strategies that can help you navigate
your way to a successful transaction.
The overriding principle guiding me when I approach the pricing
issue is this: how can we achieve a figure or set of terms which
will make both the buyer and seller happy about the transaction.
In my experience, when either party is unhappy about the
transaction, the possibility of it souring skyrockets. Yes, you
want the best price possible for yourself, but all too often
it's not worth it if it leaves the other party feeling like you
cheated them.
That's why one of the first questions I ask when entering into
negotiations is what terms or price will make the other party of
the negotiations happy. Now, this is impractical when you're
coming up with a pricing strategy for your auction, but it can
be helpful to keep it in mind. When you try to think about
matters from the other side's perspective, it can help you set
aside presumptions that may hinder your chances at a successful
transaction. We all look at transactions with our own biases,
and you almost never realize how what you're doing might seem
unreasonable to another party until it's too late.
I prefer to avoid using how much income a site generates as a
measure for pricing, even though I often do so. I only use it
when the other party feels better knowing there's some logic to
the amount we've set for the transaction. When setting the
opening bid for your auction, though, I think the earnings
multiple is unhelpful. Hopefully you've been following other
auctions selling similar web sites. Look at which ones have
received the most attention, and you'll probably find out that
it had nothing to do with where the initial bid was set.
The initial bid amount is important, but make sure you're not
turning away interested parties. Try 10% of what you hope the
final price to be. And, before you ask, "what if only one bidder
bids on my auction?" remember you have to make good use of the
reserve.
The reserve price protects you from selling for less money than
you were prepared to. Set your reserve at or around the lowest
price you'd be willing to sell at. Set the Buy It Now price
higher, say 150% of what you hoped to make. Now, these numbers
I'm quoting are all rough guides and illustrate a strategy
rather than being the exact figures you should use, so don't
take them literally.
Don't agonize, but do put some thought into your strategy before
placing a listing. I see too many listings where little thought
has been given to the pricing strategy. Watch what others are
doing too, but avoid the cliches that are seen too often in some
listings. Remember that your pricing strategy will never trump
the quality of the property being listed, but a good pricing
strategy can maximize the results for your quality property
listings.
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TIPS FOR BUYERS AND SELLERS
- Monitor what other sellers are doing with their pricing
strategy, and watch what works for them and what does not.
- Set your reserve slightly higher than the lowest price you'd
accept, and your BIN slightly higher than the best price you
want.
- Round up an opening bid or BIN from, say, $3,999 to $4,000,
otherwise you just look amateurish.
- If you are contacted by interested parties outside of the
auction format, remind them that you can both be banned for
outside bids and encourage them to put in their best bid before
the auction ends.
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That's all for this issue -- thanks for reading! I'll see you in
a few weeks.
Peter T. Davis
peter.davis@sitepoint.com [1]
Editor, SitePoint Market Watch
[1] <mailto:peter.davis@sitepoint.com>
FEATURED LISTINGS - - - - - - - - - - - - - - - - - - - - - - - -
Top Free Hosting provider for sale
<http://marketplace.sitepoint.com/auctions/66566>
PR3 Pheromone Review Affiliate Site For Sale
<http://marketplace.sitepoint.com/auctions/65867>
HappyBirthdayDomains.com
<http://marketplace.sitepoint.com/auctions/64911>
TwinsOrNot - Are they Twins?
<http://marketplace.sitepoint.com/auctions/64057>
EXPAND YOUR CONVERTER EMPIRE!
<http://marketplace.sitepoint.com/auctions/64020>
PR5 Caribbean & Tropical Destination Travel Site
<http://marketplace.sitepoint.com/auctions/66544>
Several Year Old Established DIY / Homeowner site with Almost 400
Quality Articles
<http://marketplace.sitepoint.com/auctions/66241>
$2.00 DOLLARS FOR 3,000 REAL QUALITY VISITORS!!!!
<http://marketplace.sitepoint.com/listings/66161>
ADVERTISING INFORMATION - - - - - - - - - - - - - - - - - - - - -
Find out what thousands of savvy Internet marketers already know:
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now, aren't you?)
Find out how to get YOUR sponsorship ad in this newsletter and
reach thousands of opt-in subscribers! Check out
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mailto:adinfo@sitepoint.com
HELP YOUR FRIENDS OUT - - - - - - - - - - - - - - - - - - - - - -
People you care about can take charge of their Website by
effectively using the information and resources available on the
Internet. Help them learn how - forward them a copy
of this week's Market Watch.
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