When I say that I hold domain names long term, I mean it. Domain flipping is the surest path to losing money.
A domain name acquisition from 2009 has just transformed into an almost five figure sale, and the completed exchange is yet another example of my decision to trust my gut feeling.
Six years ago I bought a stash of five domains on DNForum, at $1 dollar each, from the same seller. They were all two-word .com compound domains, and the seller simply did not want to renew them, apparently, so he had a fire-sale of about 30 domains.
In the 13 years that I’ve been using DNForum, I’ve mastered the art of turning low priced domain acquisitions into multi-thousand dollar sales. This is the first time, however, that a 9000x multiple has been achieved, and I doubt I will ever surpass this ratio.
What makes this sale special, is the confirmation of my gut feeling and modus operandi, regarding third party brokers. At the time of that post, there was no sale, which materialized two days later.
The buyer first attempted to use an Asian ‘strawman’ to inquire about the domain; their offer of a few hundred dollars was promptly ignored. They soon followed up with engaging a Sedo broker, who made a “best offer” of $1,000.
At that point, I firmly asked that they remove themselves from the exchange, as I am not interested to have a go-between for a domain that is already listed for sale on Domain Name Sales.
A couple of days later, the real buyer, representing a company, made contact via Domain Name Sales and the negotiation began. I ended up coming down from my initial asking price of $12,000 to $9,000 but still, this represents a return on investment nine thousand times over. Good luck getting this type of ROI with any other commodity, real estate included.
The transaction closed via Escrow.com, per the request of the buyer, who also covered the escrow fees.
Long term holding of domain names is the only way to ensure that a great ROI is achieved; one should also strive to remove any middlemen from the equation.
Congrats Theo, stunning sale & ROI indeed. *thumbs up*
Just for curiosity´s sake, are you able to share the domain name?
Daniel – Thanks, I appreciate it. If I were to reveal the domain, there might be some issues with the buyer’s plans. It’s a gaming company, so think ‘action’ related. Two words, noun+verb. 🙂
A few years ago I bought a one-word domain name off a newsletter for low $XXX and within a few days someone offered $500. I said no and they countered with $1000. I said no. I still have the domain 🙂
Leonard – Always renew domains you received even one offer for. Eventually, they sell.
Congratulations on your sale.
I once bought a domain that I knew that a large company would want to own.
I bought the domain for 1000$ and flipped it within a week at 90.000$.
That’s 100 times lower ROI than your example but it was a lot of money.
Jagan – Thanks.
Tony – That’s a nice sale, and at that range the ROI ratio doesn’t matter. I assume you sold it without any broker involvement, correct?
Congrats, Theo.
Congratulations Theo! It’s always fun to see stories like this. A great reminder that we should always listen to our gut.
Great job!!!
I have been waiting over a year for one of the biggest names in the domain business just to sell one domain he had offers on. Perhaps he was just blowing smoke.
Third party brokers seem pretty obsolete these days. If you believe in your names hang on as long as you can for the right price.
Matt – Thank you.
Domain.BUZZ – Thanks. Nothing feels as good as confirming one’s instinctive approach.
Discouraged Domainer – You don’t need to be discouraged. As long as you have reviewed your portfolio – see my post about Weed & Feed your domains – the right offer arrives sooner or later.
Brokers are definitely an important part of the equation, for outgoing sales. I don’t use them to sell my domains when they act upon another party.
Congrats Theo, love reading stories like this, well played my friend! 🙂
Morgan – Thank you, definitely *not* living the end of domain investing. 😉
Congrats Theo. You’ve always played a fair game and deserve the rewards.
Arco – Thanks for the words of encouragement. However, I honestly can’t believe how someone of great stature and thought of by many to be a person of good ethics/morals etc, can lead someone on without considering the consequences of their actions or lack thereof.
I could go on and rant away and throw this guy’s name out and many of you would hit the floor in disbelief. Bottom line, because of my “situation” which is unique to most was the reason HE reached out to help me after a post I made about my reality of domaining. Now I have to question his motives.
In regards to my portfolio I have whittled it down from around 800+ to just over 600 either by choice or by depending on this guy saying “I will be closing on it this Friday” only to be left without communication for a couple weeks leaving me in a deeper situation. The only reason I hung on was his name and reputation, which by now, I don’t get it.
Bottom line is it takes money to make money, whether your buying domains to hold or develop. Most times you can’t even get a message to a “big fish” end user due to the corporate structure of things. It’s about who you know until who you don’t know is looking for a domain name you own. As happened in Arco’s situation.
If anyone would care to know more about my portfolio pm me. I am looking for partners/developers and or brokers to help liquidate to raise capital for development of the portfolio beyond what I can do alone. My goal is to develop out multiple sites to create a long term revenue streams for generations. I never really set out to flip domains so much, but I do have ones worth selling if they can be presented to the right end user.
Thanks for a great blog. I am glad I found it.
Regards.
D.D.