Domain Sales - Part 1

[ParkLogic]

For quite some time buying low and selling high has been a business model that many domain investors apply to their businesses. What many investors confuse is the differences between the types of domains in their portfolio and what price they should sell them for.

When I look at my own portfolio I divide the domains into four distinct buckets:

• Traffic domains
• Development
• Stock items
• High value

I’ve spoken at length about traffic domains and touched on development. The balance of this article is going to focus on the stock item bucket.

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An example of a stock item is a domains that you register or buy really cheaply and hope to then sell it for around $1,000. Typically, you need a significant mass of these types of domains to make this business model function profitably. The goal is for a potential buyer to look at a selection of your domains and then decide to buy one. What you don't want them doing is moving on and buying a domain from another investors portfolio.

Centralised marketplaces such as Godaddy, Sedo and Afternic aggregate millions of domains so that the buyers have a wider selection. Those marketplaces use the traffic generated by all the domains to feed into the marketplace to spur on sales. What’s really interesting is that they actually don’t have to pay for the traffic coming into the marketplace…..not a bad business model.

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