It’s a daily occurrence for me to get emails from people asking me if they paid too much for a certain domain. If there is one thing my business experience has taught me, it’s that sometimes you have to overpay to get top quality things. I can use a piece of farmland as the perfect example.
5 years ago someone approached me about buying 50 acres of farmland. The price, $10,000 an acre. The going rate of farmland in the area at the time was $6500 to $7000 but there wasn’t much coming up for sale each year. But I didn’t want to be the guy that was known as the guy that paid the highest price in the county. And at that time it probably would have been the highest price paid for straight farmland. Fast forward 5 years. Three weeks ago land next to that land (and a few blocks from the nursery) sold for a record $15,375. A record that beat the previous record price of land just a mile away. High quality land is not being made. It doesn’t come for sale very available very often. While the price isn’t going to go up forever, it will continue to get more rare. It’s taught me that if you want the best of something there is a point in time where you’re going to have to overpay to beat out the others that want it. You will most likely be under water for a period of time but eventually there will be the next guy that wants it and will be willing to be the new high. In the mean time you will be labeled by many as the guy that paid too much.
The highest quality names are no different. With top quality dot coms you are most likely going to have to “overpay” to beat out the other guys that want it. Again, like the land, there will most likely be a point in time where you have paid more than anyone else is willing to pay. If you had to sell it immediately you would most likely lose money. But time will fill the gap and eventually move the price above what you’ve paid. Of course, there are limits. What is considered a “highest quality domain” is subjective. Paying $50,000 for a domain that nobody else would pay $5,000 is a gap that probably never be filled. I’m talking more in the 20-30% more range.
The most important ingredient in this approach is actually knowing a true premium domain. Unfortunately most people don’t