I listed a few domains for sale (with reserve prices) on GoDaddy recently through their 7 day auction format. My reserve prices on these domains were about what I paid for the domains so I was willing to take a little loss on them (after commission). A few ended up selling and a few didn’t. One of the things I hate the most about domaining is selling a domain for a loss. Even if I sell a domain for a small profit but I’ve held it for a year(s) I feel like I took a loss on it because of opportunity cost. But sometimes selling a domain for a loss is a smart move as counter intuitive as that sounds.
Here’s my reasoning:
1. While when I buy a domain I believe I am getting a good price on the buy, but you can’t always be right so what I thought was a good price maybe wasn’t a good price. And if I keep sitting on a domain thinking I’m right I may be holding it for 20 years and never sell it for a profit. This is the equivalent of putting cash under your mattress which you probably know isn’t a wise financial move.
2. It is OK to swing and miss on a domain as long as your hit to strikeout ratio keeps you in the black. So you get a few buys wrong, sitting on them forever will only compound your issue. I’m going to take the funds from these GoDaddy sales and put it towards new purchases (at bats).
3. I didn’t just sit on these domains and sell them after no offer came in. I reached out to many different places that I thought may have a use for the domains but was not able to sell any. This doesn’t mean there is not a buyer out there, it just means I wasn’t able to find one. But you should always make the effort before you’re willing to accept a break even or loss on a domain, otherwise you’re just being lazy.
4. When I sell a domain my ROI is usually a healthy percentage or price gain. This allows me to afford to sell domains I can’t move for break even or a small loss. If you are only scratching out small profits on your sales you aren’t leaving yourself room to sell the ones you can’t move for a small loss unless you are doing this for the fun of it and are happy to break even in total.
5. I have turned breakeven/unprofitable sales like this into second sales. If I have 20 domains in the finance niche, and I sell one at breakeven or a small loss, I now will be able to contact the person who bought this domain and see if I can move any of my 19 other domains in this niche for a profit. Now I have a small loser sale and a decent size winner sale if I’m able to get that second sale.
I’ve reached out to many people over the years to inquire about their domain. A fair chunk of them (after exchanging emails) wanted to sell their domain but they were stuck on the point that they paid a certain amount for the domain however long ago and so they will not go below that price. Things change, or maybe they paid $20 for a $10 bill, or whatever but if you realize you can’t win them all and you’re able to accept breakeven or a small loss every now and again it will only help your profitability in the long run.