Brian from TeenDomainer.com has a post today that brought up some good points about selling domain names to end users rather than to other domain investors. He is right in some respects, but that isn’t the full picture. My primary clients are and always have been other domain investors, and it makes sense for my business.
If I buy a domain name for $10,000, my goal is obviously to sell it for more than $10,000. I can either try to hit a home run and sell it to an end user for much more, or I can settle for a single and sell it much more quickly but at a lower profit margin. While many people like to hit home runs and make huge sales, it can be more lucrative over the long run to make more domain investor to domain investor sales.
If I sell the domain name to an end user for $20,000, that’s a great 100% profit, but it could take months to move it. However, if I sell it to another domain investor for $12,500 within a week, I now have a profit in my pocket and the ability to buy an even better domain name with that base amount.
Yes – selling to end users can be much more profitable. However, you need to consider your time finding the end user and closing the sale into that equation. I generally find it less appealing to sell to end users as a result. My question for Brian is, how many end user sales have you made, and has it been worth your time? This isn’t a knock, but I have been down that road and generally find that end user sales take up much more time and have a far greater rejection rate.