Dilemma of Selling a High Value Domain Name

Believe it or not, there are many people who struggle with the thought of selling one of their domain gems because of the difficulty in reinvesting in an equivalent or better name for the sales price. When the owner of a $1 million+ domain name receives an offer, he must evaluate the loss of revenue from the name, other potential offers he would miss out on by selling the name, and the tax implications of selling the name.
Additionally, he must evaluate the current market conditions to determine whether he will be able to smartly reinvest the proceeds from the sale into another domain name that will yield the same or better returns. More often than not, owning a single great domain name is better than owning several very good domain names.
While this is a dilemma that many domain owners would be happy to face, those who are actually facing it have a big decision to make. A big pay day sounds great, but only if that can be parlayed into bigger and better producing domain names.

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn
  1. When the VC people first came on the scene I received some portfolio offers. I thank Rick Schwartz for showing me the reality of the numbers offered. He said “The hardest thing to create is a revenue stream” I would be on a budget today if I hadn’t talked to him first back then.

  2. Very good points! A revenue stream is especially important for entrepreneurs since they don’t have a steady paycheck coming in every month to cover their living expenses and to re-invest into their business. A tax professional should be solicited by all potential $1 million plus domains.

  3. The biggest problem with selling a MegaDomain is letting it go with the knowledge that whatever you sell it for now could be a fraction of what it will be worth five years from now.
    And, yes, Elliot you are correct. Owning a MegaDomain is better than owning a handful of several very good ones.

  4. Agree with David, in fact I would trade all domains on our TopRatedDomains site for 1-3 solid names. Yes, those names sell, but they are just a source of trading cash flow with some minor PPC (reg fee equivalent on many).
    A “domainer” with a couple megadomains is really a “developer” if he/she so chooses. A “domainer” with 300 avg names being developed out, still seems like a domainer – just one who may be lost.
    It seems most serious domainers with megadomains are net buyers still. Great indication of where values should be heading. I do not see it as a sign of an insular industry, but rather an infancy issue – still just 10-15 years old.

  5. Like the others before me, I agree that a megadomain is superior to a collection of mediocre ones, but I would add some contingencies to help clarify the definition of what, exactly, constitutes a megadomain.
    For one, to qualify as a megadomain, the URL needs to be a .COM only. Don’t even think of arguing that a dot-anything-else qualifies. It just doesn’t. Period. Never has, never will. Ok, that just want to make sure we are all on the same page.
    Next, it needs to be generic. Yeah, I know, also obvious.
    Thirdly, it needs to be a single word in the standard dictionary. Pocket version only, please. Sorry, anything found solely in the huge unabridged version just does not qualify.
    Hyphenated words count as two words.
    Adding a number to a megadomain immediately disqualifies it (ie, 4beer.com).
    Singular always beats plural. Ok, I’ll grant exceptions for scissors and pants, but that’s it. Ideally, try to get both, but the more valuable of the two will always be the singular. For no other reason, it’s shorter.
    Speaking of which…shorter is better. Duh.
    Ok, here is the kicker…the word absolutely needs to represent a line of commerce. The more valuable the line of commerce, the more valuable the megadomain. Something like Cigarette.Com is a great megadomain while the domain Skies.com is practically worthless. You need to be able to sell it internationally and the word needs to be conducive to that goal. Words such cement.com, anchor.com and furniture.com, are less desireable for this reason.
    Lastly, it needs to be easy to spell. There are plenty of words in the pocket dictionary that I couldn’t spell if my life depended on it. One fitting that description would be frowned upon.
    Ok, let’s review: a Megadomain is a short, generic, .COM which represents a valuable line of commerce. As such, it will be easy to spell and easy to remember.
    With that said, I am looking to buy anything that fits the above description.

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