It’s the hardest lesson to learn when you are a buyer. I see it every day, people in charge of buying inventory for their company fall victim to their personal likes and dislikes. Passing on things that they don’t understand or like because they think it’s worthless, ugly, or cheap looking. It also happens in domains. Every domainer seems to have a niche they feel comfortable with and too often stay within that zone.
What taught me this lesson was purchasing statuary. I used to purchase things that I would like to have in my own yard. Things that were a little higher end, usually contemporary, with a little whimsy mixed in. But my clientele was much broader than this. I decided to experiment and add a few thousand dollars worth of lower end statuary and designs that were all over the board. I followed half the advice of my father. He always says every year we should put up a few thousand dollars on lines that we’ve never tried before. A few thousand wasn’t going to kill us and you never know, you may find a new profit center to add to the bottom line. When he saw my purchases I’m not sure that’s what he had in mind. Teddy Bear angels, Gnomes on Harleys, an alien holding the world. A little off the wall and probably not things you’d find in the elegant homes we tend to landscape. I personally wouldn’t put these in my yard but I was try to sell, not decorate.
Domains should be no different. We are not collectors, we are investors. The purpose of buying names is to have a good return on investment not have 1000 names. I could care less how many names or even what kind of names as long as I’m making money. If I can make a million dollars on dot cc then that’s where I want to be. The size of your portfolio only determines your renewal fee, not your profits. The liquidity and quality of your portfolio is what is going to make you money. You don’t sell you say? Unless you are making good money on parking or development then you will have to sell some day to make a profit.
This what many people don’t understand. Most business owners don’t become wealthy until they sell. Until that point you can make money, but the big money comes on the sale and the end. When you fall in love with your purchases it can cost you money. Sure, you may hold out for more money and do better, but you also may miss a solid profit because you are overvaluing your babies.
Another important point in purchasing is the realization that you may have gotten it wrong. Your customers are showing no interest in your purchases. This is where cutting your losses come in. This is often why you see sales. The need to clear out product that they missed on. It’s also important to do it when you are busy. Putting things on sale in the slow times doesn’t work. You want to put sale items out when you are busiest, when you have the most eyes. With domains, I often move names out at cost or just below. If a name doesn’t attract any interest then I want it gone. Getting it in a an auction or on a popular newsletter at a good price. A price that is attractive. I’m not worried about making money, I’m trying not to lose money. I’m sorry to inform you but time doesn’t necessarily make domains more valuable. Holding for the offer could leave you holding the bag on medium to lesser quality names. The future looks bright but I don’t think anyone can completely determine what is going to be light that makes us rich. That’s why I want to cash in on high quality and cash out on the mistakes I’ve made on some of my purchases. I only know they are mistakes because my customers, the domain buyers, have shown no interest in the domains. At the time I was buying names that I thought were good without the research to show what was actually selling.
And those statues I purchased. They sold like hotcakes. The best seller was the alien holding the world and they statues that were in the $30 range sold best. I learned that for every person that wanted a nice pot or fountain there were 10 that just wanted a little something cute for the garden. Again, no different for domains. Names in the $500 to $2000 range move well. You could say the LLLL.coms are the Aliens holding the world.
PS : (and that statue is the exact statue I sold but painted)