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Why accept low offers immediately

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topdom

Top Contributor
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Ok, let's say I bought a domain for 10, and if I can sell it for 100 in the first year, I make a profit, and by willing to sell for 100 I can sell it more easily than otherwise.

Maybe the buyer will accept 10K counteroffer, but how can I know. Even if I'm sure this is the case, Sedo's email may go to spam folder of the buyer, and buyer thinks, this guy doesn't even bother responding, so let's quit. That buyer may be willing to pay 10K, but in the next 100 year there will be no other buyers.

Anything wrong with this logic?
Sedo doesn't allow IP check for visits, only show countries of visits starting from 7 days ago to 1 day ago, and half of them are bot visits, and half of the rest are domainer visits, and doesn't give any hint about potential buyers.

Afternic: It is only for price request, not for selling. Someone will ask price, and you have to add a buy now price, and then what, what do you learn , nothing.
 
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I may be misinterpreting your main point, @topdom, but what I take from your post is the difficult decision whether to accept a quick offer if it is lowish but still enough to yield a decent ROI. One can have regrets either way - if one sells and feels you could have gotten far more, or if you don''t sell and then never get another reasonable offer.

I know that we really don't know numbers, but I think at least trying to estimate the following would be worthwhile to help decision making. If you can, based on success with similar names or statistics more broadly, estimate the chance of this domain selling per year at a likely price. Let's say I have a domain that I think is worth $1500 but I estimate it's chance of selling at 1/25 in any one year. That would work out to $60 sort of average, plus tack on say $10 per year maintenance cost. If I was offered less than $75 I probably would not accept it (unless I had decided to give up on the name anyway). If I was offered $400 in year one I definitely would accept it. Something around $95 could go either way.

Bob
 

Smiles76

Established Member
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365
I agree with your logic. Unless you own an ultra-premium domain which 99.9% of domainers don't. I think it's foolish to be turning down good offers hoping to get lucky in the future. Contrary to what many domainers believe, time doesn't automatically increase the value of your names. I would never waste 5,10, 20 years of my life holding onto a domain. The purpose is of domaining is to sell and make a profit.
 
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Buying a domain for $10 and selling it for $100 is not a model that is easily sustainable because you need a very high sell through rate and also you need a continuous supply of quality domains you can buy for $10 to make it work.

Brad
 
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wormfood

----Top Contributor
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2,054
some people say that you should probably hold out for more because of the difficulty of replacing sold domains with more that you can sell.

even if you can somehow find a lot of decent domains at $10 each, then you still have to estimate the chances of this working.

if you buy 1,000 domains for $10 each, and you're accepting all those low offers of $100-$300.. then, if your average sale is $200, you'll have to sell over 50 domains (5%) in one year to recoup the money.
and there are commissions blah blah.

if you want to make a good profit, then you might aim to sell over 10% of your domains at those low prices. is that likely to happen?
 
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I fully realize that NameBio data is a mix of two distributions, one retail and one wholesale. However, if we regard it as even order of magnitude a distribution of what a single domain investor with a sort of average portfolio might encounter, the median price (of .com dominated sales data) is almost always between $250 and $350 each day. That means that while I fully agree with Brad that it is super hard to make the numbers work if you PLAN on $100 ish sales, what most sales happen at is not much different than that.

I think the question here though, was not quite whether to plan a business model on $100 sales (things like replacement costs and availability enter that argument) but rather if you are offered say $100 or $150 right off, how do you decide if it is a good idea to accept it or not.

I suspect that profitability for most comes from a bunch of $$$ sales with the occsaional $$$$ and $$$$$ which is what makes it profitable, as sporadic as those sales are.

Bob

ps I meant to also add the type of domain should influence the discussion. If a shortish letter or number domain, or a single word, you know it will sell, almost certainly, and the argument to hold off is stronger than if you get an offer for a three word phrase that might not appeal to so many.
 
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alcy

Restricted (15-30%)
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like was said above.. you'd need a lot of sales to make enough roi to hold your portofolio.. make profit etc.. depending on your folio size and profit needs of course...

when all is said and done.. aiming for one 10k sale... may require much less work and effort for you... then working on 100 sales at $100 each (total 10k also)...

if you are afraid to counter first lower offers you get.. in fear of losing your original offer etc.. you can always redirect to godaddy auctoins.. where all offers from you and buyer are biding for 7 days.. rergardless of subsequent offers etc.. so this way you can always retain possibility to accept buyers lower offers.. if he doesn't want to hear about paying you more. which is all good.. cause then you are happy to get a sale out of it.. and buyer is happy to get his previous lower price accepted.

but if it was this easy selling handregs for $100.. by the 100s or 1000s, then many more domainers would be millionaires by now too.

gl
 
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Brands.International

MarekTop Contributor
Impact
8,570
Ok, let's say I bought a domain for 10, and if I can sell it for 100 in the first year, I make a profit, and by willing to sell for 100 I can sell it more easily than otherwise.

Maybe the buyer will accept 10K counteroffer, but how can I know. Even if I'm sure this is the case, Sedo's email may go to spam folder of the buyer, and buyer thinks, this guy doesn't even bother responding, so let's quit. That buyer may be willing to pay 10K, but in the next 100 year there will be no other buyers.

Anything wrong with this logic?
Sedo doesn't allow IP check for visits, only show countries of visits starting from 7 days ago to 1 day ago, and half of them are bot visits, and half of the rest are domainer visits, and doesn't give any hint about potential buyers.

Afternic: It is only for price request, not for selling. Someone will ask price, and you have to add a buy now price, and then what, what do you learn , nothing.
logic is good, but only for those who willingly want to be poor, imo :) You can not buy domains for 10 and sell then for 100 if you want to actually earn something from domaining.
 

topdom

Top Contributor
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1,502
Main point, make a high counteroffer, but get IP and/or email of the buyer, but marketplaces don't allow such things. So once a buyer is lost, it is lost forever. Why don't marketplaces track IP? Is it against privacy? There is no privacy. Buyers won't think if I visit this site and make an offer, the seller will know my IP and decide on the price accordingly.

My top 1st 2nd. 5th sales happened after waiting for more than 10 years. Top 2 are about cloud and crypto, so waiting makes sense sometimes, although you may not know which ones will do well.

If you don't know what to do make price 1K in the first 6 months, and then reduce it to 100 until renewal, and after renewal increase price to 2K. Just an idea.
 

Josytal

Top Contributor
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Ok, let's say I bought a domain for 10, and if I can sell it for 100 in the first year, I make a profit, and by willing to sell for 100 I can sell it more easily than otherwise.

Maybe the buyer will accept 10K counteroffer, but how can I know. Even if I'm sure this is the case, Sedo's email may go to spam folder of the buyer, and buyer thinks, this guy doesn't even bother responding, so let's quit. That buyer may be willing to pay 10K, but in the next 100 year there will be no other buyers.

Anything wrong with this logic?

The flaw in the logic is that your calculation is based on selling 1 domain, when we all know that not even two domains can be equal. So the logical thing is to spread your expenses and probability across your entire portfolio of domains. On the average within a year you can sell 2-3%, which must cater for maintenance cost of the 97-98%.

Sedo doesn't allow IP check for visits, only show countries of visits starting from 7 days ago to 1 day ago, and half of them are bot visits, and half of the rest are domainer visits, and doesn't give any hint about potential buyers.

Technical solutions exist already.
You can set up your landing page for the domains to collect visitor IP, country, email, name etc and then forward to whatever marketplace (not only Sedo, but also Godaddy, Afternic, Flippa etc.) you want.
 

MapleDots

Account Closed (Requested)
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13,123
Ok, let's say I bought a domain for 10, and if I can sell it for 100 in the first year, I make a profit, and by willing to sell for 100 I can sell it more easily than otherwise.

Maybe the buyer will accept 10K counteroffer, but how can I know. Even if I'm sure this is the case, Sedo's email may go to spam folder of the buyer, and buyer thinks, this guy doesn't even bother responding, so let's quit. That buyer may be willing to pay 10K, but in the next 100 year there will be no other buyers.

It's a good way to get rid of your best domains and sit on the not so good ones.
All the while making little to no money.

In my opinion it's a flawed business motto, but you have taken the first step to success by asking the advice of your peers.
 
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I think that one needs to try to estimate your chances of a higher offer from this client and from a different potential end user. Admittedly you may be in the dark if the offer came through a marketplace. I think on the latter, you can at least probabilistically answer to some degree (eg if similar quality names you have held for a few years have not generated offers over $250 that is a datapoint).

The average rate of selling is somewhere around 1 per 100 domain names per year industry wide. You can, if you have been in domaining awhile, estimate how much different from average your portfolio is. I think also one should be able to estimate whether this particular domain name is significantly better than the average in terms or probability of offers and price. Let's say you have 500 names. If you ordered your names see where this particular one that you got the early offer on would lie.

Let's say you estimate that due to your picking names and promotion skills your ratio is 1 per 50 per year rather than 1 per 100. But this domain name is at best middling compared to your own portfolio, actually if you ordered not quite the mid point..

You are a little surprised that you got an offer, and it is a two word combo that not everyone would find compelling. Also, if you are honest, it is pretty similar to names in the middle of the NameBio daily list that sell in the $200 to $350 range.

So you have the choice, take $100 now (let's assume that is net so gross of $120 or whatever), or wait for more offers in future.

You might say I can't really be profitable in domaining just making $100 so I am going to hold out for $1000. Now that is about 3x the median of the industry (at least as NameBio represent it), and you find the probability of offers for this particular name is less than my average of say 1 per 50. So I could hold it for 10 years, and have approximately 10 * (1/50) *(4/5) *(1/3) of getting a $1000 offer. I base that on the 10 years, assumed probability, being slightly less good than my average so 4/5, and that I want significantly more than median price (estimate that reduces my chance of offer by factor off 3). So thee is about 1 chance in 19 that I will get offered that $1000 sometime in the next 10 years. That is $52 probabilistically. Even not taking into account the $10 per year, it does not make sense to turn down a sure $100 right now I would argue (if these numbers represented the situation for this particular name).

Now the numbers could be different. Maybe you have a single word that you think might command $25,000. Then of course the numbers would be different, even if the probabilities were even lower it could still be worth holding it. But you should be sure that your name has at least some finite chance of getting that big price. In the last year in NameBio are 69,800 .com sales. Only 291 of those sales were $25,000 or more. If I line up the domain names that really sell, is my name better than 240 out of every 241 domain names that sold? That is, is my name good enough to lead the NameBio daily list?(actually needs to do slightly better than lead a daily list).

But what about the $1000? Well many more sales there - about 11,100 of the 69,800 sales in last year are at that level. So it becomes 1 in 6 of domains that really sell. So would my domain place in the top 1/6 of the NameBio daily list. But as shown, at the $1000 level the probability of selling leaves me probabilistically with less than the rapid sale.

Sometimes refusing to move (much) on price is the right decision. I agree to make much of a living some of your names have to go for 4 figures (at least). But turning down sure money on names that statistically odds are will never in your lifetime get that price is in my mind not a route to business success. There are far more buyers willing to pay $288 for a domain name than $2888 or $28,888..

Sometimes I would argue that accepting an offer even of $100 or so is the right move. Not always, but sometimes.

JMHO.

Bob

ps To make this even longer, let me relay a personal story involving real estate, the ordinary kind. I had an unforeseen (but positive) job move after we had just purchased our first house - a huge fixer upper we had planned to spend years making nice. This was many decades ago and a very different housing and salary market. In round numbers we paid $40,000. That was a huge amount to us (we were 1 year out of being students). A real estate agent who said probably you can get $55,000 so we priced it at $49,000 because we had to move and didn't want to have a home there and live somewhere else. Within 48 hr of listing in a town where houses often went unsold literally for years we had an offer of $42,000. Our real estate agent said oh an offer came quickly, so hold out for more. Given the slow market (east coast Canada) and that we at least would not be negative even with the realtor fees, we were inclined to accept the offer, but against our better judgement and thinking wrongly that one offer meant there were more on way soon, we held our price at almost the $49,000. That buyer went away, bought a different house I think. We moved, paid funds on this house and where we were now living. Heated both through a Canadian winter.. We waited months and months and months and got not a single other offer. The stress affected our health. At this time interest rates were as I recall 16% - yes really.. It is hard to imagine if you are less than 60 that they were ever that high. The end of the story, we waited more than a year before getting another offer and finally selling at $38,000. Yup, less than the first one, less than we paid. I know I am more risk averse than many, but I really think it is important to realistically look at things probabilistically. This is definitely not an argument to always accept low $$$ offers, just be sure the quality of the name and probabilistic arguments favour you when you decide to hold out.
 
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Brands.International

MarekTop Contributor
Impact
8,570
It's a good way to get rid of your best domains and sit on the not so good ones.
All the while making little to no money.

In my opinion it's a flawed business motto, but you have taken the first step to success by asking the advice of your peers.
very spot on!