5 Psychological Studies on Pricing

By: RH

When selling domains many domainers struggle with pricing their domains. There is the fear of losing the prospect by asking too much, while at the same time worrying about under pricing the domain.

Of course the best position to be in is that of an unmotivated seller. Where turning down $5000 can be done with confidence. Rick Schwartz has illustrated this technique at the highest level.

There are a lot of things that go into pricing a product, some may be emotional, some psychological and some just based on pure supply and demand.

Kiss Metrics just wrote about 5 psychological studies about pricing.

The article is not about domains specifically but is a good read for anyone looking to price their product. This article should also be helpful for those looking to price their product on their ecommerce website.

Read the article here

One of the things in the article is a video from Dan Ariely who spoke on pricing.

 

 

Comments

[Jim]

Thanks for the link to that article - I read it, it's interesting stuff!
As you say in your post, alot goes into pricing domains. I think it's also important to match the product with the strategy - for example, make sure we have a good domain if we are aiming for a premium pricing strategy. And of course being an unmotivated seller helps - but I think more people want to "make sales happen" than "wait for sales to happen".

I just read SEDO's recent market report and their emphasis on attaching "buy now" pricing to our domains for sale. I think that is a strategy for "moving product" on the lower end of the price range - not good for premium domains.
Cheers,
Jim

[todd]

Pricing domains is by far the hardest item to price period. There are so many variables and not many comparables because every name is different. One person may think its only worth 500 bucks because they have no use for the name but the next guy that actually wants the name will easily pay 5 grand because he has a need.

It seems like the only names that have a realistic pricing structure are most 3 letter extensions because they sell all the time and they are all basically the same concept with simple variables based on the quality of the letters. 3 character domains seem to be fairly easy to gauge also and exact keyword domains you can come up with a decent price based on searches and cpc etc.... but brand domains are extremely difficult to price. Lets be realistic, I don't think I would have payed anymore than five hundred bucks for COOLPLANET.COM but someone seems to think its worth 40 grand or JUSTWINK.COM for 65 grand. WOW!!! You just never know in this game.

Todd