AftermarketDomains

Market Introduction

The aftermarket domain sales industry has been oversimplified and stripped down to its bare necessities. This has caused market imbalances and has impeded the development of an open market. If effective segmentation can be achieved it will lead to a robust domain aftermarket with increased sales and higher domain valuations. New businesses will be enabled to enter the market which in turn will improve efficiency, increase distribution and foster competition. Encouraging an open market to develop will eventually reduce private business interests and add significant long term value to domain owners and the entire industry.

Aftermarket Domains are Rare Assets

The potential list of meaningful domains using a .COM extension that are available for new registration is becoming extremely limited. This is further exacerbated by the continual marketing of .COM domains on every taxi cab, billboard and television advertisement. Realistically the result is a commercial world of domains heavily skewed towards the .COM influence. In contrast the domains that are already registered, "Aftermarket Domains" are rare assets. These assets continue to appreciate and a robust need for these domains (primarily .COM) has developed. New businesses need to be created, distribution channels need to be drastically expanded, and technology needs to be developed. Before any of those things can happen the market must first be critically examined and restructured to rectify the conflict of market forces that are disabling the open market from growing naturally.

Growth vs. Efficiency

There is a natural paradox between growth and efficiency. This paradox can be demonstrated by looking at the difference between the organizational competencies of marketing focused companies versus technology focused companies. Marketing focused companies are very good at spending money to create growth; they look at their activity in terms of total net profit. When it is in their interests, they spend more capital to increase sales volume even when it means reducing their margin. This loss of marketing efficiency is tolerated because it increases total net profit. Often the nature of marketing also involves significant risk taking. In contrast, technology focused companies concentrate on improving efficiency, decreasing costs and minimizing risks. These companies develop technology that is faster, more robust and less expensive until the needs of the market have been technically met and they have hit an efficiency plateau. Frequently the level of technology reached by these companies in established markets becomes "threshold technologies". It is easy to identify threshold technology products; they have very little margin and a consistent level of ongoing development which is in-line with their net profits.

Value Chain Analysis

This document offers a unique view of the aftermarket domain sales value chain. The benefit of understanding the value chain is gained by achieving a deeper appreciation of the complexities represented in the market. Market forces, personal interests, established norms and primed biases are all influential when a market is formed and maintained. However, there are hiccups along the way that retard growth, cause inefficiencies, and can permanently handicap the industry. Business online is similar to but not the same as traditional business. With that realization come the pitfalls of assuming previous norms and biases as also being true online.