Sunday , March 26 2023

What’s the Biggest Mistake a Domain Investor Can Make?

Domain industry veteran Dan Cera posted his thoughts on the two biggest mistakes he believes a domain investor can make. One is related to buying domain names and the other is related to selling domain names. I like and respect Dan, but I think there is an even bigger mistake that investors can make.

Here’s what Dan wrote on Twitter yesterday:

Although I am almost exclusively a .com domain investor with very few exceptions, I recognize that many domain names sell every day. In fact, it was quite a few non .com domain name sales that propelled a few successful recent entrants in to the business of domain investing. I have seen people find success selling .IO domain names, .CO domain names, .XYZ domain names, .AI domain names, .VC domain names, and quite a few others.

Non .com domain names might not sell for as much as .coms, but it seems that some people have found success selling non .coms. In addition, the entry price for .com domain names that have value is quite high as well. I would have a difficult time calling non .com investments a mistake, let alone a big mistake.

The other mistake Dan listed is pricing domain names. This is something marketplaces like Sedo and GoDaddy have advocated for to help sell domain names more easily. Not pricing domain names can lead to higher value sales because the registrant can price each domain name based on current market conditions and who is inquiring at the time of inquiry.

For me and many others, listing domain names for sale with prices on platforms like GoDaddy and DAN help move inventory. Perhaps I have undersold inventory, but I would rather move replaceable inventory at nice margins than wait for a golden unicorn with a bottomless wallet that might never come. I think inventory quality domain names should be priced to help with cash-flow.

Even some of my highest value domain names are priced (high) to give prospective buyers an idea of what it will take to acquire., for example, is priced just shy of $500k. Maybe I could get more if I didn’t price it, but I would say that is unlikely. On the other hand, prospective buyers know my expectations and can send an inquiry with that amount in mind if they do not wish to buy it at the list price. This combined with a minimum offer requirement at DAN has virtually eliminated all time wasters.

Obviously pricing domain names is more of an art, and pricing strategy (or not-pricing) depends on each person’s business model and needs.

I replied to Dan’s tweet stating that I believe the biggest mistake is buying obvious trademark domain names. People think they might be able to sell these types of domain names to the trademark owner, harkening back to the early days of domain name sales. It’s an uneducated point of view that is not only a waste of money, but it can also be a serious liability depending on the trademark owner and how aggressive they are.

Just like there are many ways to be successful in the business of domain investing, there are many pitfalls as well. I am curious to know what you think the biggest mistake a domain investor can make is.

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