I completely respect Eric Borgos and his accomplishments and profits. It’s obvious that regardless of his “failures” he has still been more successful than most of us will ever be. I also agree that if you receive an good offer on a domain that you should take it but there is only one reason I am eager to sell a domain and that’s because I want to make money not because I fear anything else. After reading his article a few weeks ago I have a rebuttal. It’s not really a list of reasons but rather a response to the original article. (his points are in black)
1. Internet users in general are switching away from websites (which use domains) and instead using mobile apps, Facebook apps, and Twitter hashtags, which means 5-10 years from now domains might have a lot less value. So far it has not made much of a difference in domain values because most companies still get a domain in addition to all these other types of media, but that could easily change over time.
1. Companies will continue to have a home on a domain. Facebook and Twitter are add ons/complimentary marketing tools. Companies are figuring out that they don’t want Facebook controlling them
2. Later this year thousands of new domain extensions are launching, such as .love, .shop, .app, .goog, .aol, .boston, .paris, etc. and if they become popular, this may devalue .com domains. There is also a good chance it might increase the value of .com domains, because it will cause a lot of confusion and that will lead consumers to go to the .com versions of the domains by mistake. But, it is impossible to predict exactly how all of this will play out, so it is still a significant risk.
2. All investments have risk. There is no greater risk now than 10 years ago. If anything, we know that domains will continue to provide navigation and identity for many years to come. Something that wasn’t so assured in the 90s. Investing in dot com is probably as safe of an investment as any TLD available.
3. My domain parking income went up by 500% when I switched to InternetTraffic.com, as compared to all the other parking companies I have tried, but I worry that if for some reason InternetTraffic.com ever loses whatever wholesale deal makes them so special, my parking income would go back down to what it used to be.
3. Parking revenue is a bonus for me. It is not a significant part of my business model. I’ve never quite understood why people that have something good happen immediately start to worry about it going away rather than enjoy it. Rather than worrying about Internet Traffic eventually offering the same returns than other I continue to try and make money in others areas than parking.
4. There is always the risk that I will get sued over a domain, and I don’t want to have to deal with that. I have never had this happen, but it does happen a lot in the domain industry.
4. Every time I walk out the door I risk getting sued. When you have things, participate in life, run a business, or have any type of public identity there is always a chance of a lawsuit. Unfortunately it’s a cost of doing business.
5. If I hold each domain for the next 10 years to try to get the absolute best price for each one, I will spend a lot of money in annual domain registration fees, so I am best off trying to reduce the number of domains by selling them when I can.
I simply am trying to make a profit on every domain. That’s profit after all costs. Not just the cost of the domain but the cost of my time, renewals, and somewhat opportunity cost. No point in even being on this business unless you sell every once in a while and take a profit. This isn’t a quantity game it’s a money making game. I’m not scared of the future. I don’t know what it holds but I’m not dumping because of uncertainty. Uncertainty and volatility is how you make money.
6. The economy could collapse again and this might hurt my domain sales. So far the Internet has kept growing so fast that domain prices and ad rates have not gone down much since the 2008 economic crisis, but that does not mean next time things could not get worse.
Yes. Anything could happen but again, not scared of the future. The last downturn was an incredible time to make money. If you bought an property during the last economic crisis you have been rewarded. My land purchased in 2008 has tripled. I bought because of all the chicken littles running around. When I see a bunch of people yelling the world is collapsing I know it’s time to start looking for investments.
7. I have tried selling domains at auction, like at NameJet.com, Moniker.com/Snapnames.com, and HuntingMoon.com, and I did get some sales. But, only a very small percentage of the domains I put up for auction or list with a domain broker actually sell, and I have to pay a 15%-20% commission on those sales. So, there is not much more I could be doing to sell my domains than what I am already doing. This means when I find an actual buyer, it is worth trying to make the deal work with them, since I don’t have a lot of other options.
Finding buyers is the toughest part of our industry. Still, between Namejet, Godaddy, Internet Traffic, there are more outlets than ever
8. Even though selling domains is my largest source of income, I do not really consider domaining to be my main business. My main business is building and running my own websites (and now mobile apps also). So, selling most of my domains will let me focus more on the other parts of my business.
Again, the goal is to make money. And there are a ton of ways to make it in our business. Your domains are your asset and can only be once. Buying and selling domains is a business model. Building out is a business. Selling domains and not buying more is an investment. Once you are out of your investment it doesn’t give any more returns. Eric is lucky he has both.
9. I had tried building minisites on all of my parked domains, but that totally bombed. They got almost no traffic and made no money. I also tried building real sites on some of the bigger domains and those did not do well either. None of these sites ever came close to being worth what the domain alone was worth, which made me realize it did not make sense for me to use premium domains for these sites. In the future when I build new sites, I will hand register domains for them instead.
True. You don’t need a premium domain to build a business. A great domain merely enhances that brand. Large companies pay $267,000 for ONE 30 second commercial on Glee to promote their brand. A domain is small potatoes. Domains are a marketing cost for a business. It merely depends on how big your marketing budget is as whether it makes sense.
10. Several years ago I tried buying a bunch of super premium domains such as Weights.com, Pastries.com, and Adventure.com to try to develop them, in the hope of making big money making sites out of them, or flipping the domains for a profit. I knew I could always sell the domains for around what I paid for them, so there was little risk. While I did flip about 1/2 the domains for a profit, I was not able to make any money at all by developing them. I can probably sell the remaining domains for what I paid for them, so overall it was not a bad deal, but the results were too mixed and risky for me to want to keep doing it.
10. Most domain investors have no idea of the difference between building a website and building a business. Starting with a domain and working backwards usually fails. Eric is a lucky, lucky man to have such incredible names as the names above. I don’t know the financials but I would think it would be tough to not make a profit on the sale of those domains over time.
Let me reiterate, I can only hope that with hard work I can achieve half of what Eric has accomplished. He is one of the people I follow and admire. I just felt that he is in a negative state and should be more positive about what he’s done and where’s he’s headed and wanted to explain my thoughts one why. Feel free to chime in.