The illusion of the “average sale”
Ask someone what the average domain sells for, and they might say five thousand dollars.
That number is both mathematically correct and profoundly misleading.
The domain market is not a bell curve; it’s a comet — a long, thin tail of extreme outliers trailing a dense cluster of modest sales.
A handful of six-figure and seven-figure transactions pull the arithmetic mean far above the reality most investors experience.
That’s why relying on average price creates a distorted picture of market health.
The real picture: a skewed distribution
In statistics, markets like this are called positively skewed — most values are low, but a few are astronomically high.
If ten names sell for $2,000 and one sells for $250,000, the average jumps above $20,000, even though 91% of the activity happened below $3,000.
The median, however — the middle value — stays near $2,000 and tells the truth about where the bulk of real trades occur.
Why this matters for investors
When investors plan acquisitions or model returns, they need to know what is typical, not what is theoretical.
Averages promise upside; medians reveal reality.
Using median values anchors decisions in achievable expectations:
- More accurate revenue forecasting
- Realistic ROI timelines
- Better comparison between segments (.com, .ai, .de, etc.)
Medians are also far more stable over time, resisting volatility caused by one-off record sales.
How outliers mislead perception
Media coverage amplifies extremes: the million-dollar sale becomes the headline, while the thousands of $1,500-to-$3,000 trades remain invisible.
This attention bias makes investors subconsciously anchor to inflated figures.
It’s not manipulation; it’s human nature — we remember stories, not distributions.
By focusing on medians, professionals counteract this bias and see the true pulse of the market.
When averages still matter
Averages are not useless — they serve well in macro analysis: tracking general capital flow or identifying whether the high-end is heating up.
But for month-to-month insight or segment comparison, they should sit beside, not above, the median.
The relationship between mean and median even carries information: when the mean rises faster, it signals a speculative spike among top sales.
A call for disciplined metrics
The domain market is maturing into a data-driven ecosystem.
Clarity depends on using the right tools for the right questions.
If we want truth rather than spectacle, we must measure what most participants actually experience — not what a lucky few achieve.
In the long run, using the median is not conservative. It is honest — and honesty is the most valuable currency in valuation.
