Your own circumstances probably don’t align with the most successful domain name investors.
This isn’t an article picking on domain name investor Rick Schwartz. I’m just going to use him as an example.
Rick has made a lot of money investing in domain names. He got in early, kept the faith, and has a negotiating style that leads to chart-topping sales.
Assuming you did not get in early and don’t have millions in the bank, you shouldn’t try to emulate everything he does.
I bring this up because I sometimes hear people say “Play hard to get” with domain buyers. String them along. If they really want the domain they will find a way to reach out to you and make it known.
This strategy makes a lot of sense for Rick. He’s not going to have to skip dinner if he doesn’t make that $250,000 domain sale.
When you have money you can pass on deals that other people would accept. It puts you in a great negotiating position. Your BATNA (Best Alternative To a Negotiated Agreement) is to just skip the deal and move on.
When I’m feeling flush, I often ask for more when selling domains. I’m not going to bother with small sales. It’s not worth my time.
The converse is true when I’m not feeling flush.
I recall a conversation with Frank Schilling* in which we discussed a huge sale, something like $16 million.
Frank pointed out that in order to get $16 million, the seller had to reject $15 million.
Imagine that…being willing to leave $15 million on the table for a domain name!
If $50,000 is a lot of money to you, you’re not in a position to turn down a $50,000 bird-in-hand to pursue a $75,000 offer that might not materialize. (You can substitute the numbers in this example, of course.)
You can learn a lot from people like Rick Schwartz, Frank Schilling and other successful domain name owners. Just keep in mind that what makes sense for them might not make sense for you.
* I believe this discussion was on one of my podcasts. I’ve had Frank on so often that I don’t recall which one.
Mark Thorpe says
Good article. I am glad someone that has been in the domain Industry for awhile wrote about this.
Mary Jo Rohner says
Great article. Totally, my way of thinking, and glad to see you wrote this great words as I keep the faith and I believe and sit and wait!
JR says
Bookmarked…
Tony says
Don’t emulate Rick if you don’t have domains of his caliber. If you do, you absolutely should.
JR says
99% of domain speculators will never have domains of the caliber of Rick Schwartz. Because those that do have those domains are selling at max end users prices $1 million plus or holding until they die. There is no guarantee that the rules of domain speculation will remain, as much as domain speculators live in a bubble, this is a mode of gambling and there are opponents on the other side who will change the rules of the game sooner than later.
Too often speculators who pat themselves on the back as great business people, but they create little value with domains, if any. 99% of speculators are high risk gamblers, and when you hit great; get the money while you but keep it in perspective.
Andrew Allemann says
@ JR – I think that oversimplifies it. Rick has sold some six figure domains that others will sell for $10,000. Why would Rick bother with a $10K sale?
JR says
Rick has sold some six figure domains in those scenarios, because he has a lifetime in sales, 20 years in domain speculation, and he is deservingly a multi-millionaire with the leverage to hold until death; that is the most powerful BATNA for a seller in high demand market. In fact, he could be the first domain investor to reach $100 million. And there are probably only 100 or less Domain investors in the world, the rest are just speculators.
Fred says
wait…………so there was a domain name that sold for $16m????????????
mr800king says
I just share my path and there are some commonalities in that path that should not be ignored. The laws of business are heavily intertwined with what I write so that it can be applied to domains today.
However the reader wants to apply it. I just try to make it as clear as possible.
What I see, how I see it, why I see it a certain way and then try and give examples.
Take it, leave it, ignore it, chew in it, spit it out. The reader chooses what does and does not apply to them.
JR says
I argue that what happens to many newbie domain speculators, because it happened to me is that they arrive at domains in the darkness. Unfortunately, many came through when the nGTLDs mania hit in 2015 and there were some vocal figures promoting this dot pigeon shit.
Many newbies fell for the trap, but then some lucky ones found Rick’s blog and started to understand Domain Speculation 101 befre going bankrupt. They take everything Domain King says and try to apply it to their situation but it won’t work for them. Its because of the complexity of domain speculation with the half-truths, conflicts of interests, and smokescreens. So, Rick threw them a lifesaver, and they try to emulate him; but only innovation is possible not emulation.
JR says
I argue that what happens to many newbie domain speculators, because it happened to me is that they arrive at domains in the darkness. Unfortunately, many came through when the nGTLDs mania hit in 2015 and there were some vocal figures promoting this dot whatever.
Many newbies fell for the trap, but then some lucky ones found Rick’s blog and started to understand Domain Speculation 101 befre going bankrupt. They take everything Domain King says and try to apply it to their situation but it won’t work for them. Its because of the complexity of domain speculation with the half-truths, conflicts of interests, and smokescreens. So, Rick threw them a lifesaver, and they try to emulate him; but only innovation is possible not emulation.
However, those that think innovation not emulation are going to be able to use their knowledge to use their premium domain as a ticket to a board of directors seat, CEO position, or become the next Facebook or Twitter by building a brand from a premium domain. Rick entered the domain game before the Cyber Squatting act, and with ICAAN forms coming next year and more blatant bias at WIPO policy on the table; think innovation not emulation, because the game is changing…
David Gruttadaurio says
Thanks for putting some perspective into this discussion. We can’t forget that we have to use marketing (promoting and selling products or services) to sell our domains. It’s no different that pitching cars or real estate.
Drewbert says
If you have to use marketing to sell your domains, then your domains are crap.
David Gruttadaurio says
Nice!
Logan says
For better or for worse, he is generally correct. A great domain name sells itself. It should be obvious why the buyer should want to own it. The more you feel you need to talk up the domain name to explain it to a buyer, the lower the value of the domain name, holding all else constant.
brand says
Never quit your day job, stop filling your portfolio with a bunch of junk domains just because you can register them for $8.
Take all that money and buy a couple good quality domains and SELL THOSE, then take that cash a repeat the process.
At some point when you are in a more comfortable cash situation, you will be able to hold out for a larger sale.
I heard this from him often on the good ole sherpa shows.
It’s to bad those are gone..[ not online anymore ] but i still listen to the one show were he talks about how he got started with vanity phone numbers, how the guys that owned the furniture stores were really just bankers.
It’s a step by step process to accomplish what he has.
[ This is only my opinion ]
http://www.domainsherpa.com/rick-schwartz-domainking-interview
Alvin Brown says
Yes, he provided good entertainment, yet meaningful insight at times. Breaking through the noise, he provides parallels (lenses) we all can pick through and use to our advantage. The trick is finding the lens that fits you well.
Eric Lyon says
Some people have a hard time digesting information. As the digestion track processes new information, it’s supposed to soak up the nutrients of it and reject/flush the left-overs that a business model doesn’t need to absorb. Every single business model (Investment strategy) should be tailored to suit the person conducting the business, not to mirror exactly what others do. After all, what works for one, generally doesn’t work for another. The faster people lead to digest information and only extract what they need for their own development, the better off they will be in the long run game. IMHO
Alvin Brown says
Agreed
@domains says
I don’t think anyone can ‘be’ Rick or ‘be’ Schilling, but certainly with all they’ve written (on Twitter or when they both used to write blogs) there are some nuggets that even new domain investors can use today to make good decisions or prevent bad ones. Same as no one can be Buffet, but you can still use his advice to help with your investing decisions.
steve says
I believe a book (hardback, paperback, e-book) comprising the wisdom and tips in domaining by experts like yourself, Andrew, Rick, Michael Berkins, Frank (I realize he’s taken some heat with the GTLDs, but let’s not forget how astute he was in securing that incredible .com portfolio), Elliot, Michael Mann, and domains brokers like Kate Buckley, Tessa Holcomb, Dave, Tracy Fogarty, and legal by John Berryhill would be beneficial to domainers and persons/companies curious about the industry and startups