People seem to want to have a little insight to my domain investing strategy so I thought I would share a little today. It’s not always cut and dry, but I do have a little method to my madness. The title above are the names of the three categories I divide my domains into as I am deciding how to profit from each domain. I am able to do this because I don’t have 3000 or 30,000 domain and I don’t have the size, quality, or cash to sit around waiting for someone to make an offer.
My job is is to make money, plain and simple. I don’t get caught up in the “I could have made more” game. If I make money, I am happy. I strive to make more, but I start with just making profits. I am constantly surprised with the people that put every domain in the last category. That would only work if you only own high end domains and there are very few of those type portfolio owners. It guess it would also apply to those that have enough money that they have no need for the small sales. There’s even less of those people. Rick Schwartz teaches a good philosophy, be an unmotivated seller and wait to get the price you deserve. Two problems. Most people have no idea what amount they deserve for their domain, secondly, bills have to be paid.
The goal here is to make money. Selling at a profit is a win. Holding and getting top dollar is a business model for the select few. A better business model for most of us is the old buy low, sell higher method. The buy low and sell for 10,000% return is not consistent enough for most of us to make a living. Starting with simply selling domains for more than you paid consistently is a better choice for most of us.
I admit it,those big sale stories are fun. We all want to be that guy. The beauty of domain investing is you really could be that guy. You never know. You should negotiate the shit out of every offer you get but you also have to know when to say, “that is a pretty good return, I’ll take it” and move on to the next domain. Hopefully an even better name. If you can figure out any consistency from the weekly sales reports you are a better person than me. The only thing I get or of the Sedo list is that 40% of the people listed a fix price that would assure them a nice profit and it sold. The other guys got lucky and had a name that somebody really wanted. Maybe the fixed price people left money on the table I don’t know. I can only say that at least they got money off the table. Most of my names fit into this category. Try and sell them at a profit and be happy.
The first category of “get whatever you can get” is a category in which I don’t want many names. They are names that I messed up when I bought them. I overvalued them. There has been no interest and as I’ve matured as an investor I realize they don’t have much value. I will put them up for auction at Godaddy or Namjet and see if they sell. If not, I hold until renewal and drop. Because of this, the section of my portfolio has dropped dramatically and soon will be less than a dozen. I still makes mistakes but not nearly as many. My emotional purchases have dropped and I am much better about what I will develop and won’t develop. Because we all know shitty domains become “development” domains.
The last part of my portfolio are the strong names. Names that I know are great names and I have no intention of letting them go for anything other than a solid price. I will hold them until the day I die if I don’t get my price. Every once in a while I will sell to create revenue for an even better name but it’s rare. I let the other part of the portfolio generate the cash flow and wait for these to fulfill that dream. But as we all know, it could just as easily be that name in the bottom of the portfolio that is the name that fetches the big bucks. But dreams don’t pay the bills so I need to have a model to keep bringing in the cash.