Is your current Domain strategy working for you? No. Then change it fast!
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James Stafford October 24, 2008
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When
we all start out in this business we get to hear the stories of Scott
Day, Frank Schilling, Rick Schwarz and believe that maybe one day we
will be able to count ourselves amongst their number.
I
remember when I started out I hand regged about 100 names and thought
fabulous wealth was only a few months away. After a few weeks I was
still patting myself on the back over my wise investments, so I regged
100 more. I took a look at the names that were selling and compared
them to mine and further convinced myself that mine were of a much
better quality.
Three
months later and not a sniff, what on earth was wrong with these buyers
I thought? I’d advertised them on the forums for 4 and 5 figures and no
one had snapped these gems up. Either they couldn’t see the fabulous
value these names represented or I had made some mistakes.
So
I started to do what I should have done in the beginning - read what
people with experience had to say about the business. What was selling,
what wasn’t selling, who had the most informative blogs and what
strategies had worked in the past to build great domain portfolios.
After
about a month of reading I realised my hand regs weren’t going to get
me rich and what was needed was a change in strategy.
I’d
read on Namepros that the only way to make some decent bread in this
game was to spend some serious money on names others had undervalued.
So I started hunting around, and then I hunted around a bit more.
Finally I got lucky and managed to buy Foom.com for $950 (I sold it a
few months later for $21,000) and with this one under my belt I charged
ahead and have continued adding names to the portfolio from all areas
of the domain market.
I
mentioned in a prior post how I had one of my best periods for selling
names recently and this is because I changed strategy again. My prices
at the time were too high as I was holding out for the end user prices
and sadly at that level I just wasn’t getting any bites.
So
if something isn’t working you fix it, and I subsequently reduced my
prices to a reasonable reseller level and suddenly my Domains started
walking out the door.
Sure
I would have gotten more if I’d held out for an end user, but I’d
rather have cash in my pocket now than imaginary dollars in my fantasy
bank.
So
now I’m asking reasonable prices for good names and constantly keeping
my portfolio turning over and gradually upgrading the names I own.
Also
if you take a look at the wider economy you’ll see that we are in the
midst of an economic storm that looks like it’s going to get worse
before it gets better. This will of course have a knock on effect on
domain prices, and as much as we like to think we’re somewhat insulated
from the wider economy this is not the case. Some areas may be less
effected than others (Premium .com’s, etc..) but believe me, there is
nowhere to hide when a recession strikes.
So
I guess what I’m saying is price your names reasonably if you wish to
sell them. I’m constantly amazed at some of the dialogue I have with
sellers and their unrealistic price expectations. For example, I spoke
with Mr X the other day about a nice LLL.com – I started off by
offering him $10,000 – his counter proposal was for $250,000. After
quite a few more mails this man still hadn’t budged. He’d seen a news
article a few years back about a 3 letter name selling for this figure
and that is what he wanted. It’s doubtful he’ll ever get his price and
he’ll continue holding the name until it’s either worthless or he’s
grey around the temples.
Now
when it comes to implementing a successful domain strategy you must
start thinking of your investments like a general does his troops. Have
a plan in mind and do everything you can to execute it, but the plan
cannot be set in stone, it must be fluid and flexible to allow for
opportunities and dangers on the horizon. So watch the stockmarket,
look at trends, study markets and industries that are close to ours and
see what’s coming next that’s both good and bad.
But
whatever you do don’t bury your head in the sand and stubbornly refuse
to budge as this will damage your business and your bank balance.
I
think we’re going to have a very interesting year ahead of us and I’ll
be looking closely to see what impact the vanity TLD’s have on the
market, as I think their may be some good opportunities in this space.
But I’m not going to start guessing yet – I’d rather see how it plays
out in the beginning and then move forward once a trend has been
established. Sure I might miss out on the amazing Reg fee deals – but
after having been burnt in the past I’d rather have thinner margins and
definite winners than the potential of hitting a home run but also
losing the lot. |