For my business model to work right now, I need to buy and sell a few premium domain names each month. On occasion, I will keep and develop a domain name that fits within my development plan – for example, when I buy a geographic domain name I want to build out. I don’t really have the time or inclination to operate additional websites at this point, because I look at my websites as incubating businesses that take considerable time to manage.
I frequently run into a problem when buying a great domain name. Because I tend to focus on verticals and industries in which I am familiar, I often buy names I’d love to own rather than sell. If I kept all the names I bought, I would have been broke a long time ago, so keeping everything isn’t an option. I face this predicament monthly, and I bet there are others who have the same issue.
My advice to others is to keep what you can afford, but sell what you need to sell to stay liquid. In my opinion, there isn’t much of a point to being “wealthy on paper” while being cash poor at the same time. You can frequently come back to the person you sold it to and make an offer down the road if necessary. With the funds you used from the sale of that name, you probably made better acquisitions and bigger sales, so you can afford to pay a premium for that domain name if necessary.
If you don’t want to take a chance at not having the opportunity to keep the domain name, you should think about financing options. Domain Capital and DigiLoan both offer different domain financing, and both companies are operated by domain savvy business people. With domain financing, you can stay liquid while keeping your prized domain names.
You have to look at your portfolio with a strategic viewpoint instead of a tactical viewpoint. Geo is a perfect example. If you own a great geo portfolio of multiple large cities above 100K population – then it doesn’t make sense to keep a city with 50K population. The second tier city could make a nice profit – if that was your only domain – but opportunity costs come into play. You wouldn’t want to underperform in your large geos because you were spending time on smaller geos.
We tend to rank our Geos by brand popularity as opposed to population and find that revenue ensues accordingly. For example, Palm Springs only has 47,000 people, but its brand popularity is massive and much more powerful than say Albuquerque (518,000). On the other hand, Nashville (590,000) has both.
I agree with tourist destinations, relative search volume (brand) is a better indicator than population.