mole said:
Have you noticed how cheap it is to catch dropping .COM names for $60 or less nowadays, or how cheap people are selling domains on forums like this?
Contrary to popular (read speculative/euphoric) belief, .COM names are actually plummeting in value. With .XXX being introduced soon, the dive will be even more.
The so-called sales you see is only SYMPTOMATIC that those who got their names early in the game are now trying to liquidate what they have for whatever they can get, as compared to the no big money no name position they took in past years.
I don't believe this is the case at all. I've been 'active' in the domain market now since 2000. This year, I've had higher sales than I have had since 2001. I actually had my biggest personal sale ever this week.
I think what IS happening is that sellers are willing to sell for more realistic prices than they were previously. There are only so many buyers with deep pockets after all. There's a nice middle ground market of domain sales in the $1k-$2k range going on. I know a lot more people today making fairly good full-time incomes in the domain business than I did 4 years ago when bigger sales were more common.
On the DNJournal reports.... keep in mind those are only top of the line sales and not all domain sales get reported there. I've had many sales (and brokered many) that were not through auction/domain channels and not reported to any third party yet would have made the weekly reports. I'm sure there are a lot of others in the same boat. Often corporate buyers will require privacy. If I turn around and provide the sales data to a third party source, then it's obvious to know what the company paid for it. Not all companies want domain acquisition numbers made public (for a variety of reasons).
There's also the domainer mentality where you pick up a decent domain name and expect to make a small fortune for it or you get crap names and then say the industry is in a decline because you aren't able to sell a domain over $100 (or less).
So, yeah, lots of speculators are letting stuff drop left and right and not because there is no demand on behalf of buyers, but either because the asking prices were unrealistic or because the domain sucked to begin with.
To give you one example: I registered a domain that a speculator dropped. They had been asking $2k at Sedo for it. I sold it for $400 a few days after registering it. The person that let it drop could have paid their < $10 renewal fee to keep it and made a nice $390 profit instead of having unrealistic expectations.
I guess what succeeding in this industry comes down to a few things:
1. Decide whether you are going to treat this as a hobby or as a business. If you go with it as the latter remember if you aren't selling your domain to someone else, you are buying it yourself. Look at your portfolio and your asking prices: would YOU pay those prices for your domains? That is always always the thing I keep forefront in my mind.
2. Decide on a focus for your domain collection. It will make it easier to keep track of trends, to know when there are good buys in the secondary market and to have a better understanding of buyers in that market.
3. Set realistic numbers for asking prices. Internally, we have a database where we keep our asking prices and bottom line of what we will go for. And yeah, we will sell at bottom line. I pay $8 or so for a domain and someone offers me $500 for it versus MAYBE selling it in a year for $20k... damn straight I'll take the $500 now. With the $500, I keep about 150-200 of it and reinvest the rest between new registrations, acquisitions and renewals.
Does this strategy work for me? Well, I let drop maybe 1 in 20 domains I register. I slowed down on acquisitions between late 2001 and early this year. But I managed to sell 1 in 3 domains that I did register. I think the lowest price I sold a domain for during those years was 105-110 at Afternic (had forgotten to set a reserve).
4. Learn the art of negotiation. I do broker the odd sale for clients. One asked me to make an inquiry about a domain on their behalf. The person had no sales price listed, so I started off with $50 to at least get an idea of where they were. Instead of counter-offering with something, they just declined the offer and said it was at least $X,XXX. Well, heck, my client would have gone to low $1X,XXX for it. Now that domain owner has lost a sale. (I told the client about this and they said not to bother submitting a new offer.)
Okay I'm getting off my soapbox
P.S. Updating this because I neglected to include one other possibility - looking at domains as an investment. After being up 12 hrs already, I am too beat to think about commenting on that
