In the past, some of us decided against cherry-picking domains, we simply gave out availability lists. For free.
Once in a blue moon a quality four letter .com becomes available to bid on; a few weeks ago AKME.com – a 12 year old domain – entered Namejet’s pre-release auction system.
It’s good to follow such auctions in order to determine pricing trends and of course, to acquire valuable domains at a price less than what others would pay for.
That’s Lessons on ROI – 101.
So AKME.com ended up selling for $676 at Namejet – a nice price for this pronounceable, aged and alternative to “ACME” domain.
Fast forward four weeks to the present: AKME.com sells once again – this time on Sedo auctions.
The auction closed at $419
Assuming the buyer paid cash for it at Namejet, thus not incurring credit card interest, the return on investment would be:
– $307 ($419 minus $676 he paid initially, minus the $50 Sedo commission)
That’s $307 in the red in less than a month.
Pretty impressive lesson to be learned here: Flipping domains is the single biggest mistake you can make.
Domains are meant to be held long-term, unless the ROI is guaranteed and substantial. If there was an offer, for example, of $3,000 for this domain then by all means, flip it. But the owner decided to push it to Sedo auctions after he received an offer almost 3 times less than what he paid for!
Domaining is not for everyone, as Charles Darwin once said.
“But the owner decided to push it to Sedo auctions after he received an offer almost 3 times less than what he paid for!”
Is that what is meant by a “Reverse Auction”?
Reverse auction 😀 Love it!
Ever since Sedo redesigned their pages, the “ending soon” auctions are gone from the home page, thus reducing the amount of exposure substantially.
Just not true. Like stocks, some times you have to sell things at a loss in a try to make a gain. Your hope is that you make more than you lose. There have been many times at Sedo where I can take a name I purchased at another location and flip it for 10 times what I paid. Other times, I eat a few hundred dollars. It’s called domain trading aka flipping and it can be risky. I agree holding is easier, but there are fantastic opportunities for instant flips. I could go on and on but perhaps I should do a post. Good story but I have to disagree on this one somewhat
No, no, no, no…
Let’s go back to ROI 101: Profit is the mother of all trading.
You can’t treat domaining as if it were a matter of chance or with “stock market volatility” mentality.
Flipping a domain in 30 days and “eating” $300 bucks reeks of bad, BAD strategy and very bad domaining skills.
It’s exactly why domaining is not for those that want to try it as just another “get rich” scheme.
AKME.com has a mid-four figure potential. The now former owner f@cked up big time by taking it to auction with a $250 bid. What for, when he had paid $679 no more than 30 days earlier?
But for our US-based friends, here’s another secret: holding domains for a year plus a day gives you (upon selling) a tax bracket of 15%
And next month it will show up in DNJournal with a re-flip price of $151,000…
Time is money. Cash flow makes the world go round. Knowing when to wait, when to sell, when to take a loss and free up your money for better opportunity is the key to all business. Obviously he thought he had a domain worth more than he paid and he was willing to find out. Plain and simple, it didn’t work like he thought. No big deal, It’s only $300, no big loss. There are thousands of people that let thousand dollar domains expire every day with a 0% chance of a return. At least this guy had a chance
Dudh..useless domains=BullShitDomains=BullshitWebsites
Can’t you all handle the truth??
Shane – the loss is not $300. I evaluate AKME.com at $3k at least. This guy tossed a ton of money by being impatient. Bidding on Namejet names means that one has a strategy: to acquire aged domains (most are Netsol releases, therefore, old). By flipping a 12 year old domain at a loss, he might as well start selling tacos at the street corner 😀
SL – Isn’t that the truth? The patient bird enjoys the worm 😀
Unless I had money to burn I would never accept an offer below waht I paid for a domain, much less send it to stupid auctions at Sedo. The akme.com seller screwed up big time. I hope he learns a lesson.