It is arguably more difficult than ever to privately acquire a great .com domain names. The majority of investment quality, long registered, domain names are either in the hands of end users or registrants who will not sell cheap. Quite a few are held by investors who are rightfully seeking end user pricing to sell their assets. Put simply, there is a dearth of investment quality .com domain names available to purchase for investment-level pricing.
Off the top of my head, I can think of 15 people I know to be well funded who are regularly chasing after the remaining high quality .com domain names. Many of these investors are friends, and all of them are competitors. When I come across a domain name that is available for sale and the registrant indicates other offers on the table, chances are very good an investor (or multiple investors) I know is on the other end of the offer, biting at the bit to secure a deal.
From my perspective, domain investors seeking the best quality domain names need to pay close to today’s end user prices to secure a deal. Domain registrants have likely received and passed on substantial offers over the years and retain the inquiries that were previously in the event the name goes on the market in the future. While this might feel like overpaying (and likely is to an extent), my feeling is that it will look like a deal in the future as the value of these depleting assets have been increasing.
One of the biggest issues I face is trying to figure out how to buy domain names but not pay such a price that I can not get a ROI in the foreseeable future. Another issue I face is that it is difficult to spend six figures on several domain names speculatively and have enough capital remaining to be able to fund the business for a period of time should the market drop unexpectedly.
From my perspective, it is unwise for inexperienced investors to utilize this strategy. There is a fine line between overpaying for a top domain name asset and simply overpaying for an average asset. I have certainly overpaid for domain names I thought would be hot commodities that haven’t received nearly as much interest as I expected.
The general market appears to be down this year based on the reporting of DNJournal. Part of the issue (which is the same every year) is the highest end of the market has much fewer people discussing sales and sale prices. The other issue is that domain names are not turning over as much as they have because they are in much stronger hands who are not interested in selling for anything short of business or life changing money.
It is very difficult to buy exceptional domain names right now, and I think it is necessary to overpay today to secure a deal that will look like a good value in the future.