Just Like Poker You Need to Know When to Hold’em and When to Fold’em

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.

What is the Domain Market Telling Us?

There’s been two sales of domain names that have happened recently and both of them had me trying to read between the lines and see if there is more to them then meets the eye. I think it is a smart move for anyone to do this instead of solely relying on articles that are written because reading the articles puts you on par with everyone else who is literate and you always want to be one step ahead when possible.

The first sale was the sale of Media Options domains through Namejet. This was publicized on the Namejet site with one of their big rotating banners so without evening needing to do a Whois lookup you could tell Media Options was unloading domains. There’s two questions that instantly came to mind when I first saw this:

1. Why is a successful brokerage selling domains in a venue that is filled with resellers and not end users?

2. Why are they selling these specific domains and what does it say about these domains?

One group of people who have a very good pulse on the domain market are the large brokers. They are dealing with a steady stream of high quality domains and they are in constant communication with end users so they understand the end user sentiment better than any other group IMO. The domains that Media Options were selling through Namejet had a lot of high quality domains (good LLL.com’s in particular). So why sell them now at Namejet? My guess is that they believe the LLL.com market is at a peak. That’s not too hard to believe given that I’ve seen crappy letter LLL.com’s selling for high four figures consistently now. A year ago they would have been getting $3,000-$4,500. What can I take away from this? If I have any LLL.com’s that now is the time to sell them, and if I’m buying LLL.com’s then I may want to hold off a bit because I may be buying at the top if I buy today.

Secondly, why these specific domains? Do I think an established brokerage would auction off high quality domains without first attempting to sell them directly to end users. My guess is no. For myself, before I send a high quality domain to any auction I have exhausted my attempts of finding an end user for it. That doesn’t mean that an end user doesn’t exist out there, it just means I don’t have a high confidence level of finding one. If a brokerage is selling a quality LLL.com domain through Namejet I would assume they have done the reaching out and couldn’t find an end user. Because this is their 9 to 5 full time job they already have a solid contact list and more experience finding end users, so if they couldn’t find an end user for a domain then what does that say about my chances of finding one for that domain? Even though there were some nice domains being sold I personally stayed away from buying any because of both reasonings I came up with.

The second sale is this BuyDomains sale of 950k+ domains for a price of under $50 a domain. Unless BuyDomains needed cash quick, or unless the portfolio was filled with complete trash, this sale is pretty troubling if you’re a domain investor. Having a million domain portfolio gives you a look at lots of useful information and a gives you a good beat on the aftermarket. What is the average selling price now compared to the past, what is the number of inquiries coming in now compared to the past, what is the close rate now compared to the past, etc… I would assume that a lot of these statistics came into play when BuyDomains was calculating how much they’d let their portfolio go for and if they were happy with less than $50/domain on average that is not a good sign. When I think about this in the macro sense of the domain market I may now be more inclined to accept a $2k offer on a domain instead of holding out for $4k as an example. There’s quite a few levels of thinking I’ve done about this sale and I’m not going to share them all here, but if you see something like this and you’re not questioning what it means in the market and what it means for you then you’re going to fall behind.

Whenever I see a solid domain on Namejet with a reserve price I do a Whois lookup and I have seen quite a few well known names selling their domains on Namejet. I personally think the gTLDs have a lot of people spooked. I think domain investors are questioning now what impact on .com prices will the gTLDs have. And what impact on demand they will have. I personally think very few gTLDs will find long term success. I think that people won’t be able to remember if that new site was Car.deals or Car.NYC or Car.directory or Car.online or Car.web. Too much fragmentation in an already fragmented internet. There may be some short term pressure on .com domains until it all shakes out and the market can begin to see a clear direction but now may be the time to start placing all your chips down on one direction or the other if you want to try to cash out big in the next five years.

What Kind of Broker Does This?

If you use DomainNameSales you know that even if you don’t use their internal brokerage team, after a lead has sat there for a while it gets forwarded to one of their team members to try to rekindle the lead and see if they can turn it into something. I don’t know if you can opt out of this but after today I’m going to find out. One of their brokers reached out to a lead of mine (very important to note, this is my lead that came in on my domain, this is not a DNS lead for them to use as they please) and the DNS broker talked to the lead on the phone. You can not track what happens on the phone but you can see the followup correspondence through the internal DNS system. The broker writes to my lead and says:

“Looks like we got disconnected — just let me know if you want me to extend an offer to acquire the .com; alternatively, I am happy to look at derivative names that also would fit your needs…”

Apparently this broker at DNS thinks this is his lead and he can offer to show the lead domain names not owned by me. Ummmm, I don’t think buddy.

1. It is not professional in any way, shape or form to do this.
2. It is my lead generated by my domain. If you want to use that lead for any other purpose you better have my approval and be paying me for it. My domains should not be generating commissions for you on domains not owned by me.

I would think this is common sense but it looks like a training course may be needed for at least one member of the DNS internal brokerage team. #NotCool

Had My Best Sales Month Ever & Where Offers Come in From On My Domains

Normally the summer is slow for domain sales but July was my best month ever in terms of volume of sales and total sales dollars. Every sale was either 4 or 5 figures which is the typical price range I ask for the majority of my domains. The only time I’m willing to take sub $1,000 on a domain is if I plan to not renew the domain when renewal comes up. I sold multiple domains through each of the following avenues: DomainNameSales, GoDaddy, and reaching out to companies/people. I’ve been focusing on expanding how I search to find potential leads. At first it was solely using Google and searching for keywords but as time has gone on I’ve kept expanding to use different methods and it really broadens my potential reach.

One place where I have not sold a domain this year, in fact I don’t even know if I’ve received an offer there this year is Sedo. I used to get a fair amount of offers at Sedo in previous years (pre DNS when I was parking my domains with them) but now it appears like the Sedo marketplace gets no bids for me on its own. Read more…

GoDaddy Auctions: Paying More vs the Fast Finger – This Might Just Saves You Thousands

Would you rather pay more but be guaranteed to get a domain, or pay next to nothing but have an unknown chance of getting it?  I prefer the latter and I’ve gotten tons of domains by being smart.  On GoDaddy auctions if an expired domain auction ends and there are no bidders it takes a few minutes but the domain goes to a fixed price buy it now format.  At this point, whoever jumps on it first gets it for the fixed price of $11 (plus the renewal fee) so around $20 in total.  When I am watching a domain auction and I see no bidders on the auction I wait for the auction to expire.  I do not bid on the domain in the last few minutes because a bid on a domain draws attention to it.  People filter the domains by bids and so by bidding on a domain that previously had no bidders you are putting that domain on the radar screen of tons of people just like you.  I think it is the dumbest thing you can do but plenty of people do it.  Here’s an example from an auction… Read more…

What I’ve Learned in the Past 6+ Years of Domaining – 10 Things….

Domaining can be hard. It can be especially hard when you teach yourself. When you have to learn by trial and error, and when you waste money on domains that in hindsight you have no idea what you were thinking about when you bought them at the price you bought them at. Sometimes there are nuggets of valuable information you can pick up from the domain blogs, but that information is few and far between. Unless you are lucky enough to find a mentor that you 100% trust it really is all on you to learn how to be successful.

I purchased my first domain name maybe 9 years ago if memory serves me correct, and it was maybe 6 or 7 years ago that I purchased my first domain name as an investment. I do this part time so my learning curve took much longer than someone who does this full time, but I think finally I am at a place where I am confident that I know what I’m doing. That isn’t to say I still don’t make mistakes but my mistakes have become minimized. It really hit me when I was doing my usual routine of scanning the deleting/expiring lists each day and I found myself not liking 50 domains a day. I’ve become much more selective. It took a while to distinguish between domains that I thought would be a good buy, and domains that are a good buy. I figured I’d share some of my learnings from over the years because it may help someone that is starting out today and I really wish I had someone candidly share lessons they had learned when I was starting up. Read more…

Trying Something New – Want to Make Money with Zero Risk?

I don’t see this done often if ever, but I’m going to give it a shot.  I’m going to open up some domains I own to allow anyone to refer a buyer and earn a commission on them.  I don’t have a ton of contacts across all verticals and so finding the right person to market a name to can be a challenge.  Even if you find the right company that is only 10% of the battle, the other 90% is finding the right person at that company to get in contact with.

I list my domains at the usual places but they sit there in the marketplace waiting for someone to find them.  I can give them to a domain name broker but unless it is a six figure name or higher I doubt they proactively search for the right end users to contact and reach out to them.  More likely they go into a newsletter and get mass distributed to whoever is already in the broker’s list.  I’m going to try to harness the power of a group.

Maybe you know a contact in a field related to one of the domains I put up on my sidebar and you can speak with them and direct them my way.  Maybe you have someone in your LinkedIn group that a domain would make sense for.  Contact me, let me know who you are referring, and then have them reach out to me.  I’d be more than happy to give you 15% of the sale price in commission.  This also can give someone who is getting into domaining the opportunity to get some capital to invest without having to spend a dime.  To be very clear, sending me someone’s email address is not a valid referral because I have no clue if you know the person or if you found the email randomly.  You need to have your contact reach out to me so I know it is a true referral.

There may be some pitfalls of doing this, but the only one I can think of is if 100 people search Google and all send emails out to the same people.  I’m asking you to only take advantage of this if you already have a specific contact.  Please don’t send out spam emails for my domains.

Let’s see how this goes.

 

Changed Over Servers & Theme Last Night

I spent the better part of the night last night troubleshooting the move to get TLD.org on a new server and changing the theme. There was a lot of customization that had gone into the old site for the functionality it had and while I wanted to keep the articles from the old database I did not want to keep the WordPress customizations so suffice to say I got a good self taught lesson last night in databases as I had a lot of manual editing to do. But it’s up and running now and hopefully it will be smooth sailing.

.Com is Like New York City and the gTLDS are Like North Dakota

Sometimes we buy into the hype even though we should really know better.  I myself made some gTLD purchases when they started rolling out but if I could rewind the clock I’d go back and save myself that money.  There’s arguments on both sides of the coin on where everything will shake out.  If you’re still on the fence I’ll give you an analogy I gave someone else that seemed to work pretty well.  Let’s talk US geography.  .Com is the New York City of extensions no doubt.  Nothing will ever overtake NYC.  You also have some other smaller places that are still popular like Boston (.net) or Los Angeles (.org), Chicago (.me) and Dallas (maybe .co).  You get the point.  The question is where do the gTLDS fit into this geography analogy?  Well, I would stick them in North Dakota.  I’ll make an oversimplified generalization and say that North Dakota may look pretty, but otherwise it’s mostly an empty space of nothing.

Domains like Car.Insurance and Back.Link and Visit.Berlin and many others where the left of the dot combined with the right of the dot makes great sense look pretty.  They do, and this is why a lot of domainers have gotten excited.  Because it looks pretty.  But that’s where the upside ends.  Here’s why: Read more…

DomainNameSales Updates Platform to Not Contacts Leads by Default

I posted a short blurb yesterday about DomainNameSales and the platform sending my leads a link to buy the domain in other extensions. The wheels move fast as mentioned in a comment by a reader and confirmed by myself just now that no longer is this action checked by default. Now you need to implicitly check the box for your leads to get an email pushing other domains on them. This is the right way to do it and from being unhappy yesterday I am happy today with this change. It is the right way to do it and I appreciate the quick turnaround time to make this change.