Invest in domain names, not lottery tickets.
I’ve been thinking about this for a long time, but Michael Sumner wrote it better than I could have. So you should read this.
Most of the top sales you read about on DNJournal or see people brag about are outliers. Even Mike Mann’s. In fact, Sumner has data about how Mike Mann prices his portfolio.
News flash: most of his domains are priced at $10,000 or less.
Tweeting about top sales creates a distorted view of the market. Yes, we all have that great story about turning nothing into lots of money. But in the grand scheme of things, these are outliers. You don’t want to make a business plan based on outliers.
snoopy1267 says
Don’t agree with much of the article.
New entrants often don’t understand the names being sold, eg the article mentions qualandar.com, so they see that sale, think it means nothing and register jalandar.com. That is a fail because they have done no research on the 40k sale.
As far as long shots go that is how people make money in domains, they sell %’s each year (well under 1%) and the revenue is the smallish numbers that sell. If people try to sell a high % they won’t do so well. The domain industry isn’t like any other business were the turnover is so slow.
Dave says
You don’t agree with realistic and sensible pricing?
The people making actual profit in domaining are those pricing realistically and sensibly.
snoopy1267 says
Bullshit. How many people have made significant money in this industry by selling stuff cheap?
The big mistake people mistake (like the guy mentioned in the comments) is buying names that are worthless and will barely sell no matter how they are priced.
Mike Mann has the pricing strategy right. He sells a significant % in 5 figures, I’d say 5%. That 5% is likely 50%+ of his revenue.
Robert McLean says
Sound reasoning by Mr. Sumner.
Well put.
Count me as one of the stupids, asking more for his names, than other domainers assess is prudent.
Danger.
Domainers kicking other domainers’ names.
Case:
I had an offer from someone for my name mining.camp for $8000 USD
Right before the buyer was to pay, someone from Godaddy alerted him to Namebio.com and cited that Space.camp sold for only $2000 USD, so he pulled out.
He then became abusive towards me and reneged even when I lowered the price to $2000.
The domain name business is owned, lock, stock and barrel, but roughly 3 dozen or so individuals that were first to the circa 1995-1999 .com registration trough. I would list the gentlemen here, but I know that trying to cite their names will result in having the post stopped.
Suffice is to say that the domain kings, when asked of the value of name not owned by them, will disparage the name so much so that real, criminal intent is evident.
From my experience, as a domainer that started in ernest to make money in the domain name business in 2008, the kings take gleeful occasion, time and time again to demean and disparage attempts of anyone other than the chosen 36, or so, to make a sale.
The kings of the industry and those willing to do their bidding, devalue names of the domainers on the outside, only, to serve their own purposes.
Sound reasoning by Mr. Sumner.
However, making sense of an uneven playing field and justifying maligning the value of other domainers names and their efforts is, perhaps more to the point of why those that are not counted among the kings can’t sell a name.
Robert McLean
It is “business as usual” and an otherwize “cost-benefit calculus” that the kings of the domain name business employ when disparaging the domains of those not in the “club” of 36 or so “first to the .com registration trough, circa 1995-1999.”
I don’t care what anyone asks for their names. It is none of my business. Why would the kings care what I ask, but to kick sand?
snoopy1267 says
You are registering bad names, it is that simple. Doubt anyone is listening to conspiracy nonsense.
Matt says
Andrew, thanks for reaching the spotlight on this.
Completely agree with you about the distorted view – these folks have a strategy where outlier sales are balanced by high carrying costs and additional risk – neither of which are talked about.
Really quite deceptive.
There was a nice discussion on Sherpa where Mike Cyger discussed his pricing and sale of clicktracker.com where he discussed his rationale for selling at a more reasonable price than others may expect.
Altocom says
Thanks a lot Andrew for pointing us to it. Great article and very, very valid facts.
Joern