Knowing when to accept an offer and knowing when to pass is a critical component to investing in domain names. I want to do my best to maximize the revenue from a domain investment, but I do not want to regret passing on an offer.
Nikul Sanghvi shared two question he asks himself when considering whether or not to accept an offer. I always ask myself a version of question two, although I don’t really think about the first one much:
Unsure about accepting an offer?
Two questions I ask myself in that situation:
👉 Would I pay [the offer price] to buy this domain today?
👉 Could I buy a better domain with [the offer price]?
— Nikul Sanghvi (@hypernames) July 21, 2020
Domain names are unique assets, and I have rarely ever sold a domain name and acquired it again. Put another way, once I sell a domain name, it is highly unlikely I will ever have the opportunity to own and sell the domain name again. I want to maximize each sale while balancing the need for cash flow to grow my business and pay myself.
I want to share a few other questions I ask myself before accepting an offer or passing on an offer:
- How much interest has there been in this domain name and how does this offer compare to past offers?
- Do I believe anyone would pay for this domain name in a reasonable amount of time?
- Would I rather have $x in cash or this domain name?
- Are there reasons for why this domain name will be worth more in the future, and are those reasons worth passing on the offer?
- What are the tax implications of selling the asset?
Probably the most important question I ask myself is this:
- If I do not accept this offer, will I have regrets?
I have sold thousands of domain names since I started investing. I can only think of a couple of sales that I really regret. I have definitely undersold names in the past, but not to the point of regret. On the flip side, there are several offers I regret not taking.
Domain investors have different business models, and mine involves regularly selling my domain names. I always ask myself these questions before agreeing to a deal.