How long can you hold on?

[DotWeekly]

I don't like to BS!

Domaining is hard business right now. Domaining is done "different" by nearly everybody who's in the biz. Flippers, Developers, Holders etc...

I classify myself as a "Holder" but I am not sure how long I can keep doing it this way.

By a holder, I mean I do not constantly list domains for sale on domain forums, listing domains on eBay, accepting "low" offers and sending domains to auction via Sedo and so on. I wait for the "right offer" to come along via the steps I have in place to get them.

I have been buying Better and Better domain names, but my offers continue and are currently the worst they have ever been! I normally would get about 3-5 offers Per Day and now currently I am lucky to get One Offer in a week.

In any business, Income is needed.

Since rev is down, I am being forced to buy less even though nice domains are on the market at fair prices.

Parking rev is down, so that is income taken away. Offers are down and sales are clearly down as well.

How long can you "hold on" (stay in business)?

If you are still doing "good" please feel free to help others to keep our industry strong.

 

[-REECE-]

I think sometimes the biggest mistake people make is not knowing when to sell. Even if selling means taking a loss, it often is the right thing to do. Having all your money tied up in a commodity losing value certainly isn't doing anything but pretending the loss isn't real because you haven't yet seen it on paper.

Taking a loss and reinvesting that money in something which will likely be more profitable is what many people should be thinking of at present. The great thing about uncertainty is that it creates opportunity. You might sell your domain at a 20% loss and turn around and make double that back on a quick flip bargain you found (eg. OLU.com). There have been more than a few "steals" lately and I'm sure that's largely thanks to many domain investors seriously lacking liquidity at present.

 

[ripley]

Yofie, I used to have your same philosophy, about two years ago. I bought domains and held them waiting for the "right price." I sold maybe two at the prices I thought were right. Admittedly my portfolio was small and I was fairly new to the game.

Now I see reg fees as my enemy. I try to only buy names that I think I can sell within a year, and I rarely spend more than $20/name. (Occasionally I buy to hold, and occasionally I may purchase a more expensive name, but this is the exception rather than the rule.) If that means ultimately dumping names off at or near regfee when the year ends, what does it matter? I'm always buying more and better names because I've created liquidity in my profile by not holding out for the "perfect" offer.

At this point, after reentering the domain game earlier this year and operating on my new business model, I've made more money than I ever did under my old philosophy.

Have I left some money on the table with the names I've sold in the past few months? Almost certainly. But it's a lot better than the nothing I was getting before.

Price your domains to sell at a good rather than amazing price and don't be afraid to click yes.

ripley.

 

[Ross]

This is the main reason why companies like BuyDomains buys domains for pennies and offer them for thousands, because they can renew thousands of domains for years. Then wait for the right buyer to come along and buy the domain for thousands.

My advice, and what i do, is take the offers you get as long as its a reasonable profit. Then you have your income and the resources to conduct normal business while getting great names at amazing prices.

As Rick Latona would say, "I believe that pigs get fat and hogs get slaughtered."

 

[ripley]

This is the main reason why companies like BuyDomains buys domains for pennies and offer them for thousands, because they can renew thousands of domains for years. Then wait for the right buyer to come along and buy the domain for thousands.

Exactly. Precisely. And I don't know about you, but I can't -- or rather, am not willing to -- sustain regfees on hundreds of names over who knows how many years while I wait.

ripley.

 

[Ja$on]

I hate renewal fees and is the main reason I will sell a domain under value 7 days out of the week. I would rather not renew a single domain unless I know 100% without a doubt that is more valuable then any offer it has received.

Occasionally I well sell under regfee because I know I don't want to spend the time trying to get more and even collecting some of the original investment is better then losing it all.

 

[Sleepys]

As Rick Latona would say, "I believe that pigs get fat and hogs get slaughtered."

You are being extremely generous to credit this to Rick Latona :lol:

I am going to have to go against the grain here (I am a bit of a contrarian). I have a similar philosophy as you. Buy and hold, wait for the right price. I don't mean thousands on every single name, but a price I am comfortable with. I have actually seen a huge increase in offers over the past few months. The majority are low ball offers, which usually amount to nothing, but my sales have been steadily increasing over these past 2-3 months. Of course my parking earnings have been going down, but they are can still cover a lot.

Here is one thing to think about. People always fall into the trap of thinking that what is going on now with an investment will continue indefinately. When parking earnings were increasing it seemed by the month, everyone believed that they would continue it seemed forever. Now that they are declining and especially since it has been longer and worse than people expected, people are positive that it will continue this direction, until I guess it reaches $0.00 per click. That is why we hear constant shouts of parking being dead. The same thing happenned with the stock market. How many thought it would continue to go up while it was rising? How many thought it would continue down at 8300? How many now believe that it will now continue going up? I have a theory that if you were to track the predictions of Jim Cramer on Mad Money or the Fast Money team (I am a fan), that they say the market will go up the next day, on an up day, and that it will continue to go down on a down day 80-90% of the time :sold:

So, in my opinion, people will be served well for holding out until the inevitable recovery, that for some reason people can't foresee. If you see an amazing deal, that is only priced cheaply because of the economy, you will probably regret not taking it. The only time to get worried, is when you really can't handle your reg fees anymore, then do some careful pruning.

Remember 2001.

 

[Seabass]

There is an old military saying, "You don't reinforce failure in the battlefield", meaning you don't send another 10,000 additional men to fight a losing battle in which you just lost 10,000 men, you must try a different tactic. Why send 10,000 more if the original plan did not work?

Applying that philosophy to domains works too. If you can't make a domain(s) profitable in parking or as a site, and if you can't sell the domain for the price you want, will you keep renewing at reg fee year after year? Those reg fees become additional "reinforcements" you are adding to failure. You could have spent that money on other domains that might then make you some money.

If you think about it carefully, of course it is better to cut your losses and sell for "cheap" and keep the cash cows. You then have a tighter company.

If you could take that money and then buy a couple of primo domains, a short sale home, some Google stock, or whatever investment you are keen on......then maybe you might hit a home run, instead of spending resources(money) on renewing domains.

 

[Domainate.com]

Try harder, and try new things. Approach possible buyers directly and don't ask for a ridiculous end-user price but something that they may actually say yes to even if it's not a name they'd be dying to have.

If the buyers aren't coming to you because there are fewer of them thanks to the economy, figure out ways to find them. I don't want to share one of my secrets but it's helped me get over $40,000 of sales at least in the past year and it didn't involve emails.

I will say that some people may be failing because they were hanging by a thread to begin with (invested a dangerous percentage of their money expecting to get it back quickly), or just were not very good at what they were doing (registering per 10 domains 1 good one and 9 decent ones instead of just the 1 good one is a mistake a lot of people seem to make). Some of you may have to face the fact that either you need to take the time and learn some more to continue and be successful, or perhaps this really isn't the industry for you. I'm sure some of you are way talented in other areas and ignore those talents for whatever reason even though you could make an easier living with them.

Domaining is hard. It's hard even in the best of times, let alone times like this.

 

[henrysim]

I'm new to this business, but what I'm doing is deviding my domains into 2 groups.

one for the domains I plan to hold and another one for the domains that I'll flip.

I'm doing fine with this method.

 

[-REECE-]

Dare I mention the D-word (development) :o

Seriously, now really is a good time to brush up on those development skills... It's never going to hurt knowing how to develop and if you're (not talking about anyone specific here) not selling any domains because you can't find any endusers and refuse to budge on price because doing that would results in a loss and (gasp!) you're not willing to take a loss because that's against your domaining principles...

It sounds like you're doing a whole lot of nothing under those circumstances -- at least nothing financially productive. Development will at least help you make the best of current circumstances

 

[Sleepys]

There is an old military saying, "You don't reinforce failure in the battlefield", meaning you don't send another 10,000 additional men to fight a losing battle in which you just lost 10,000 men, you must try a different tactic. Why send 10,000 more if the original plan did not work?

Applying that philosophy to domains works too. If you can't make a domain(s) profitable in parking or as a site, and if you can't sell the domain for the price you want, will you keep renewing at reg fee year after year? Those reg fees become additional "reinforcements" you are adding to failure. You could have spent that money on other domains that might then make you some money.

If you think about it carefully, of course it is better to cut your losses and sell for "cheap" and keep the cash cows. You then have a tighter company.

If you could take that money and then buy a couple of primo domains, a short sale home, some Google stock, or whatever investment you are keen on......then maybe you might hit a home run, instead of spending resources(money) on renewing domains.

Very good points. I was not implying that people should renew all of their "losers". I don't consider $7 a huge investment for most of my names, and the majority are still doing well enough with parking. I was saying that if you are selling now, because your parking earnings have been cut by 50-75% over the past year, and you expect them to fall another 50-75% now, because you believe the trend will continue, then you are falling into one of the oldest investing traps.

It is a fact that when there is panic in any market, rampant selling occurs, and it is normally the people buying in the downturns that do the best. Buy high and sell low doesn't work for anyone. That being said, if you consider these names to be "losers" then by all means you should sell them for what you can get. That is whatever I meant by selective pruning. Also, having reasonable prices can make a world of difference. Reasonable is a very subjective term, but if you don't even like a name, why would you hold out?

 

[-REECE-]

In all honestly, most domainers don't know what a downturn in the domaining sector feels like because they've never been in one before. Let's just say the dotcom bust was a whole lot uglier than it is now and while I'm not saying it will get worse, it's naive in my opinion to think it couldn't.

Most educated investors who invest in highly speculative stocks employ stop loss orders. I would never consider most domains a less risky investment than a highly speculative stock, nor would anyone who saw how bad things crashed 2000-2002. To quote Snoop, "big booms, big busts" -- that really is the best 4 words I'm aware of to summarize the domain name industry.

Employing a stop-loss order isn't about walking away a loser, it's about not losing your shirt because you made 1 big mistake. It's required very little skill to be profitable 2003-2007. A twelve year old could have put his allowance money in an LLL.com back in 2003 and would be doing quite well today. The market has changed now and domainers need to adapt. Most of the easy money is gone. Too many domainers think like gamblers -- probably because they've made so much easy money the past few years and think "what goes down must come up". That just might not necessarily happen.

The best strategy at present is in my opinion to make profit when you can and accept loss when you can't. There are opportunities out there, however it will take liquidity to capitalize on them. Keep yourself 20 or 30k liquid and just wait for that guy who decides to firesale his LLL.coms so his house doesn't get foreclosed.

Now is not the time to buy and hold. Now is the time to find bargains, sell, and reinvest in finding more bargains. A bargain today is not necessarily a bargain tomorrow -- that's something many LLLL.com investors have found out the hard way this year. Buy domains at a bargain and sell them while you can still turn a profit on them. There's a time for demanding top dollar -- that time is not now for most domains.

Very good points. I was not implying that people should renew all of their "losers". I don't consider $7 a huge investment for most of my names, and the majority are still doing well enough with parking. I was saying that if you are selling now, because your parking earnings have been cut by 50-75% over the past year, and you expect them to fall another 50-75% now, because you believe the trend will continue, then you are falling into one of the oldest investing traps.

It is a fact that when there is panic in any market, rampant selling occurs, and it is normally the people buying in the downturns that do the best. Buy high and sell low doesn't work for anyone. That being said, if you consider these names to be "losers" then by all means you should sell them for what you can get. That is whatever I meant by selective pruning. Also, having reasonable prices can make a world of difference. Reasonable is a very subjective term, but if you don't even like a name, why would you hold out?

 

[Corey]

re How long can you hold on?

It is predicted here in Australia..
that the Property Market Cycle which reflects what is happening in the broader economy will not turn until 2012!

In the meantime I suggest you develop your names.

Cheers
Corey

 

[Sleepys]

In all honestly, most domainers don't know what a downturn in the domaining sector feels like because they've never been in one before. Let's just say the dotcom bust was a whole lot uglier than it is now and while I'm not saying it will get worse, it's naive in my opinion to think it couldn't.

Very true, it could always go further down. I am saying it will recover at some point. That is what people forget. I am always early calling the turnaround. I started saying oil was coming back down when it first crossed $100 a barrel. I was wrong for 40% up and now I am right. I was saying that the real estate market was heading for a huge downturn, maybe 1 and half years early, and continued to preach that. I looked like a huge idiot for quite a while as prices continued to escelate faster and faster. One thing to keep in mind is that the most sever drops and the most severe rises happen at the end of the bull/bear.

So, it certainly could get worse to before it gets better. To think it won't get better would be naive in my opinion (I know that is not what you are saying).

Most educated investors who invest in highly speculative stocks employ stop loss orders. I would never consider most domains a less risky investment than a highly speculative stock, nor would anyone who saw how bad things crashed 2000-2002. To quote Snoop, "big booms, big busts" -- that really is the best 4 words I'm aware of to summarize the domain name industry.

I guess it depends on what kind of names you invested in. People who bought the final names in this buyout or that, probably are sitting on highly speculative names that won't return anything and are just burning holes in their pockets. I try not too pay a lot for most of my names, as someone else here mentioned they do. I also own mostly generic terms, not brandables or short ones for the sake of being short (I do own a few). Most of my names still earn their keep or close. Most I consider to be worth a significant amount more than I paid. I will know when things get so bad that I need to start selling more and more, but for me it is not yet.

The best strategy at present is in my opinion to make profit when you can and accept loss when you can't. There are opportunities out there, however it will take liquidity to capitalize on them. Keep yourself 20 or 30k liquid and just wait for that guy who decides to firesale his LLL.coms so his house doesn't get foreclosed.

Ouch. Is that what we need? I think that you are a little beyond a lot of people on here. :p

Now is not the time to buy and hold. Now is the time to find bargains, sell, and reinvest in finding more bargains. A bargain today is not necessarily a bargain tomorrow -- that's something many LLLL.com investors have found out the hard way this year. Buy domains at a bargain and sell them while you can still turn a profit on them. There's a time for demanding top dollar -- that time is not now for most domains.

I have to agree and disagree here. If you find a good enough bargain, why sell it for minimal profit now, if you are sure it will be worth more in the future? I guess that there are other factors involved, like what you paid for this "bargain", what type of name it is, and how much it is able to earn you without selling it.

I will freely admit that I am not a flipper though, so my comments come from that end. Also, if you can sell now for a profit, that is different than selling at a loss, simply because you think that parking is dead and you will be getting paid $.00-$.01 per click in the near future. If you need to sell, then sell. If you are presented with a good opportunity to sell, then sell. But to sell because you think the market will continue to drop, is just as much speculation as buying because you think the value will continue to go up :imho: It is just reversed.

On development, I think that has always been a good idea (for the right names).

 

[Makis.TV]

i have the resources to hold my domains(and i own some .tv premium with $$$$ renewal prices per yr)
and i m trying to fund my domain job for some more buyouts.

when it come to hand regging i m almost done, i see no value in there anymore, i mostly find expired domains and flip them for 10x of their buying price which is a ncie roi for me and a great investment for new buyer sicne i sell them a website related to the domain along.

This crisis made me focus on special domains, i m going to buy a domain, expired or owned ONLY if i see that there is some market wiaitng for it.
I wont buy just to hold for 10 yrs and the resell for $$$$$.

ps: one of my expired domains, is making me now $4-$10 per day having 1000+ unique views per day and i m already developing it(re investing revenue and other sales money) so i can offer a good to use service and establish myslef in its niche

 

[Kate]

Are you domaining full time Jamie ?

 

[DotWeekly]

Are you domaining full time Jamie ?

Yes.

One good thing is, I do have a good deal of cash on hand but I still find myself holding back on buying and buying due to slow times.

I have several things on the works (Development) a new process that I am going to give a try that I think will really work.

One thing that I really do not agree on that I have read in the above is selling for a loss. It simply doesn't make sense if the Domain makes sense.. Renewals are just part of your investment and if $7 is going to break you, then I can see not renewing.

Domain names can really sell for Any price at Any time. It just takes that one little email or phone call to come in or to finding that one buyer. Sold prices suprise me daily, so if you belive in your domains, I wouldn't be selling for a loss anyday.

I myself do let domains drop but not very often (maybe 10-15 domains total ever). I also have never sold a domain for a loss, but I'm sure that is because I buy Only when I know it's a deal.

 

[Michael]

I think sometimes the biggest mistake people make is not knowing when to sell. Even if selling means taking a loss, it often is the right thing to do. Having all your money tied up in a commodity losing value certainly isn't doing anything but pretending the loss isn't real because you haven't yet seen it on paper.

Taking a loss and reinvesting that money in something which will likely be more profitable is what many people should be thinking of at present. The great thing about uncertainty is that it creates opportunity. You might sell your domain at a 20% loss and turn around and make double that back on a quick flip bargain you found (eg. OLU.com). There have been more than a few "steals" lately and I'm sure that's largely thanks to many domain investors seriously lacking liquidity at present.

That is quite possibly the best advice I've seen on the forums. It is an easy mistake to make, but very costly.

 

[Big P]

IMO developing your domains into working sites, even if it is a "mini site" is part of the answer to domainers problems...hopefully more user friendly tools & companies will become available..we need something more than a $250 wp site , it seems like alot of people/companies are trying to offer this, but none have been the complete package, yet...the other is we have to be constantly looking for new ways to monetize our domains...affiliates, selling infor or a product, offering a niche service...I am an avid reader of your blog & you have a ton more knowledge in me in the field, but I think if we can get more development out of domainers in general it will be ( & is IMO) the next step in the evolution of domaining...flipping is not a dependable business model for most, I would like to think that people will start looking at monetizing the property they have & go for long term goals over short term gains.