Why I Don’t Hold Out for Top Dollar

6

When it comes to domain investing and selling domain names, there is a wide variety of thoughts on optimizing domain name sale prices. Some people, like Rick Schwartz, will almost never sell a domain name for less than the optimal market value. As you should know, Rick has done very well with his domain investments and this strategy.

I tend to utilize a different strategy for my domain name sales. For my “inventory” domain names, which make up approximately 90% of my domain portfolio, I try to achieve as high of a price as possible, but I am content selling for a fair price and nice ROI even if the sale price is not optimal.

Luc Biggs has had considerable success selling domain names, and I believe he and I have the same investment thesis when it comes to moving inventory-quality domain names. Here’s a recent tweet from Luc discussing the sale of a two word domain name:

One could certainly argue that Luc left money on the table with this sale, I would say that the funds can be used to buy several other domain names of the same quality – either in expiry auction or private acquisition. Subsequent acquisitions can yield higher returns that would go well beyond the funds potentially left on the table with the original deal.

I do not have access to endless capital. If I did, I could turn down all offers that do not maximize the value of my domain names. At the same time, I could continue to buy great domain names and add to my portfolio. That is not the case with my business. I rely on the proceeds from domain name sales to fund subsequent purchases. I am generally content selling a domain name for a fair price and using the funds to acquire similar inventory.

There’s nothing wrong with the strategy of holding out for the ideal offer to sell a domain name. For my business, I have always been happy to sell a good domain name for a fair price and move on to other purchases. I think Luc summed it up nicely with that tweet.

6 COMMENTS

  1. It’s a dilemma that nags every domainer. With our Whisky.com sale, we hit the mark, but there are others where I look back and grit my teeth. With our new site (CastelloBrothers.com), we list 100 names for sale in descending order of price. We’re more flexible with the smaller names, but when the big ones are gone they’re gone. I believe we won’t see the ceiling for premium names for a while. This pandemic has a lot of people working from home and that means on-line businesses. And with on-line businesses, the name matters. It always did and always will.

  2. It also adds industry value getting the asset into use verses parking, etc.. If asset is going to an international client. or a solid company putting the url to good use, that helps establish the URL as a solid technology investment. .com penetration would not have happened if everyone was HODLing domains in the early days which increases all our portfolio value (rising tides). If we know a company around the world will use our clients .com, will take a 10-30% haircut just for the distribution penetration in global markets.

  3. Elliot – I follow that exact same strategy. ABout 10% of my domains are higher priced and I will hold them for a much better price. The other 90% I will happily sell today at a reasonable price.
    I am more concerned with taking money off the table than I am with leaving money on the table.

  4. MasterManagement.com is easily replaceable. $5K is a great price for that type of name. Whisky.com is irreplaceable and you hold out for the absolute best price for it and the like. Ideally, you sell as many of the first kind to buy the second.

Leave a Reply