After I’ve Sold a Name, It’s Dead to Me

Feb 25 2015

These are the words I told Jamie Zoch yesterday when he let me know that Sello was purchased by Shopify.  In short, I could care less. My main reasoning?  Its not my name any more and if I don’t get any money out of it, then it no longer effects me.  Two, I could give you a list of 50 names that sold for more after I sold them.  Pretty much every name that wasn’t sold to an end user.  To me it shows the names I purchased are good dot coms.  Because good dot coms should go up in value with time.

If the future of dot com is what I predict it to be then basically every domain I sell should be worth more than what I sold it for.  The longer period of time since I sold it for, the more it should be worth.  The determinate in my business model that I often talk of , is lack of outside funding.  It means that every domain I buy HAS to be funded by income generated from domain investing. I haven’t taken one dollar from any other source.  Only blogging, websites, or selling names.  That is what determines what I can buy. When the money is spent, I can not buy anything until more income appears.  It is also the reason why I will sell a name at a smaller profit than some others would. I need to generate income to buy more names, better names.  If I didn’t follow that practice I couldn’t have purchased those names that people said I sold too cheap.  Kind of ironic.  As for sello.com.  I put a reserve at $4K at Namejet and unfortunately it was hit at exactly that.  Not a great profit but 20-30% in a pretty short period of time.  Only in domain investing is 33% in a year bad.  A lot of people say now that the name is worth five figures easily.  If that’s true and easy call then why didn’t any of you fuckers buy the name when I had it at auction? 🙂

We all could look in our rearview mirrors and see how cheap we sold some our names in the past.  I kidded Elliot that the most valuable name he ever had and ever will have, is probably the NNN.com he sold that had some eights.  A name that probably is worth $150K now and liquid at that price.  (he didn’t agree, not on the value but that it was his most valuable name).  But there is no point in dwelling on that.  If a person sold a name at a profit then they did fine.  Leaving money on the table happens and its human nature for those to judge your sale.  It would be nice to sit and wait for the best sale price down the road like Rick Schwartz but not everyone has that luxury.  Some of us have to keep moving and turning.

You guys are going to get a peek at my portfolio in a few weeks on DomainSherpa.  To some it is going to be good, some it will be bad.  But all names were purchased with zero dollars down.  All money created through domain investing and talking about it.  And with that in mind, I’m proud of it.  I never look back at what I sold, I look at all the great things I’ve done, built, and bought,  because of my sales.  Once those domains leave my hands they are dead to me. They are another person’s assets to try and make money. My old portfolio had a lot of numerics and short names.  But those are gone and now I have a flush bank account and a couple of bigger names. I sold those for roughly $40K but had I waited an extra year or two could have been worth $150K.   I had a great return on the $40K and preferred the cash in hand.  It gave me security, the ability to buy more names.  To travel and buy a few things.   And its those sales from the past that have led to my bright future.  To worry about how I could have done better would tarnish what I’ve accomplished and where I’m headed.

 

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Outsmarting the Dumb, Outworking the Smart

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14 comments

  1. Konstantinos Zournas

    I don’t look at my sold domains either. But sometimes, like when I get 20 inquiries for a domain I sold and the buyer never changed whois, I get a bit annoyed.
    And sometimes I keep seeing a domain name I sold over and over in the news. But I got $25k for that .org domain so it is fine.

    I can’t wait for that domain sherpa show!

  2. R

    The fact of the matter is that 90% of domainers are not long term investors in the domain assets they acquire. They see the quick profit and flip it. Very similar mentality to daytraders in the stock market. Nothing wrong with that.

    The reality, however, is that long term investors in any market make the big bucks, not daytraders (with the exception of HFT if you consider that daytrading). When you buy and hold for 10, 15, 20 years you have a much greater opportunity to make a fortune, as well as save valuable time not having to deal with a multitude of negotiations and transactions.

    Business cycles change every 5, 10, 15 years. Ever since the USD went off the gold standard in 1971 these cycles have become more pronounced with massive bubbles and busts occurring. When you buy on the low of a cycle and sell at the top 10-15 years later you make the big bucks because prices tend to extremely overshoot true value.

    Anyone with a portfolio of 5-10 NNN .coms 5 years ago is a millionaire right now (liquid), just off of those domains alone that probably cost them $5-10K each. To be honest I’ve never really understood the flipping mentality of a domain investor. .Coms are the best investment perhaps in our lifetime. Anyone who has held premium .coms for 15-20 years and not sold is worth a fortune. Domain flippers have done pretty well, but they’ve mostly spent their gains and are not nearly as affluent as the investors that have held. Sure there are exceptions, but not many.


    1. Post author
      ShaneCultra

      R,

      I agree if you have money to spend. Not everyone does. I had to build through flipping. Now 10% of my portfolio is flipping. I agree. If I had $50K to spend then it would have best to buy and hold. Of course I would have put it all in Apple stock. I had more faith in Apple than domains at the time.

      1. R

        Now is probably the time to sell Apple imo. $750B market cap and the highest p/e it’s seen in the last 5 years. P/S is also close to 4. Law of big numbers is approaching. The buybacks could help sustain the pps but if eps declines next Q apple is going to take a quick 25% haircut.

        Seems like the dynamics of domain flipping are starting to change as well. The low hanging fruit is starting to disappear and domainers are having to pony up more for quality and their margins are shrinking. The price appreciation of NNN.com and LLL.com’s appears more about collectibility/scarcity and less about actually providing real value/competitive advantage to companies that deal in the exact match product domains of those goods.

        I acquired one NNN.com and one LLL.com about 3 years ago for $20K and $4k respectively. Just as collector’s items. Have no plans of selling them, ever.

        Vast majority of domains I have acquired are product domains. In my opinion that is where the real long term value lies for traditional businesses that are still ramping up their e-commerce operations. I guess that is why I don’t see the logic in flipping premium .coms. Most billion dollar businesses in the retail space are still quite unsavvy when it comes to internet marketing, mainly because they still outsource to agencies who don’t live and breathe what they sell.

        You rarely see a real domainer launch a new business outside of the IT services space, for instance a retail e-commerce business, and truly succeed ($25M+ business). Actually I’ve never heard of one. They always seem to fail. I think because the mentality of a domainer that relies on flipping domains for a living doesn’t have the patience or long term vision to execute a real business plan that depends upon providing real value to consumers.

        Apologies if I’m coming across harsh in this sense to domain flippers. I’m just calling what I see. It’s not necessarily a knock on them. The short term vs long term mentality, from my experience, is the difference between marginal success and being wildly successful in business.

    2. fatih

      Good points. But still Shane is right as most of us need the wheel turning. I once sold a domain for 25K that i had bought for 1K in just a year.

      I watched the domain for a year to find out how it will be developed. After 2 years of developing i found out that it was a 100 staff software company that could easily pay 100K if i had said no.

      but hey! whats wrong with 25x profit in year???:)

      As Shane said it is only bad to make %33 in domaining. I advise everyone not to act like we are the smartest entrepreneurs of the world. Just hold on %5 of you domains that you think are the most valuable and let the others turn the wheel. Cause still it is “developers” and “hard workers” that earn and deserve the highest profit in the long run.

      those 7 figure sales are just lottery news to me. I dont buy any tickets nor i give any importance to who wins them.

  3. Kd

    I have only cared about one past sale. End story if its a branding agency contacting you stay high on your price. All other sales… They have been good to me.

  4. Raymond Hackney

    Only in domain investing is 33% in a year bad. A lot of people say now that the name is worth five figures easily. If that’s true and easy call then why didn’t any of you fuckers buy the name when I had it at auction? 🙂

    So true and spot on , I laugh all the time when someone acts like oh you only made 33% ?, when you know they have never averaged 33% on any of their investments for a sustained period of time. People act like if you didn’t sell for 10 fold or more it was a failure, 33% is an excellent return and if you can do it consistently, you are at the upper echelon of investing.

    Liquidity, safety nets and savings, all three matter. good post.

    1. R

      Im going to continue this conversation because I think an important point needs to be made.

      There is a big difference in domain asset classes. Take for example the domain you brought up, sello.com. In my eyes it’s not worth anything more than $5-10K. There is little chance you wouldve been able to sell it for $50K o r $100K, ever. It’s a made up word. Ofcourse you should be happy to take 33% profit on it. The value lies in that you can trademark it and protect that trademark because its a made up word. But there are hundreds of thousands if not millions of SUBSTITUTES so the name doesn’t hold that much intrinsic value. Take the profit and run, and dont think twice about it.

      Now take the domain Hotels.com. If you registered this in 1995 for $70 and sold it in 1997 for $50K, you wouldve made a huge mistake. And you should be kicking yourself because the domain clearly was worth millions in due time. This domain has massive intrinsic value. It describes the exact product, brings instant credibility, easy to remember, easy to spell, etc.

      And look at a 3rd class, the NNN.com and NNNN.com market. This is simply a play on scarcity (and the Chinese obviously). The value of these domains are 100% based upon supply/demand. In most instances there is absolutely no meaning to these domains. There is little supply and the stronger the hands get the smaller the chance they will be available for sale at a later date. Chances are NNN.com domains will only continue to go up in value over time due to the scarcity. So if you bought a NNN.com for $10K 5 years ago and sold for $20K 3 years ago than in my opinion, you didn’t take into consideration why it was appreciating so quickly and why there was so much liquidity. Because of scarcity. If you believe in the long term price appreciation of .coms than holding was the appropriate thing to do because the chances of being able to acquire another NNN.com (i.e. SUBSTITUTE) down the road was very slim. In this 3rd case, I would be kicking myself.

      If one doesn’t understand that there are clear differences in types of domain names, and certain domains should be held long term and others should be sold quickly at a profit, than one doesn’t truly appreciate the long term value of .com domain names play in the long run.

      Domain name asset classes should not be viewed equally

  5. Neil

    Love the sentiment Shane. I think I only once had a looking back moment and thought, “if only”….but after remembering I’d just sold for $9.5k was hand-regged, I realised that it’s one of the few areas where that ROI is legal and was very happy about it……

  6. Spike

    Good article, but didn’t like the title for this reason: You should always monitor your domains after selling them because sometimes the new owners inexplicably let them drop. If they are dead to you, you might pass up an opportunity to acquire and resell them again.

  7. Joseph Slabaugh

    I just bought one that gets a ton of traffic, and have made it into a newsletter/affiliate leads page.But I have been tempted to slip it already. I could see a 5K return on a 1K domain, or I could just let it build up (name removed because I don’t allow 3rd party names for sale in comments) for myself. 🙂

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