How Soon After Acquiring Domain To Reach Out To End Users?

[Dann-o]

I typically wait several months to reach out to end users for domain sales, but that's because 1) I'm still doing this part time and do it when my schedule allows, and 2) I've purchased them cheaply enough that it doesn't hurt me financially to hold them for awhile.

In the last few days, I acquired my first "higher end" domain and don't want my money tied up as long this time if at all possible. This isn't a hand reg, it's been registered since 1997 if it matters.

So the question is, how soon after acquiring the domain do you begin reaching out to end users?

 

[Dorkside]

I don't really think there is any reason to wait.

Though often when you get a domain in your account the registrar will prevent you from transferring it out for a certain amount of time, so you may want to hold off until it's free to be moved in the event that you do find a buyer.

 

[Dann-o]

Thanks Dorkside, I was sort of leaning that way anyway, you kind of confirmed what I was thinking.

 

[fpforum]

Sometimes it's good to wait 60 Days just so you can transfer it out if needed. However, if the domain is at a big registrar like GoDaddy you could probably reach out sooner. Most end users have a GoDaddy account or would feel comfortable making one there really quickly.

 

[Dann-o]

Thanks for the opinion, fpforum. I figured this was the case with other domainers, but wasn't sure if end users would have a problem with it or not.

 

[Biggie]

So the question is, how soon after acquiring the domain do you begin reaching out to end users?

never!

wait until they contact you.

 

[Dorkside]

never!

wait until they contact you.

That's an interesting strategy that I hadn't really heard advocated before.

Care to elaborate on the benefit of not being proactive?

 

[Dann-o]

That's an interesting strategy that I hadn't really heard advocated before.

Care to elaborate on the benefit of not being proactive?

Not trying to put words in Biggie's mouth (so feel free to correct me), but I think he's basically just saying that the name should be able to sell itself if it's good enough, and also your negotiating position and therefore profit would be greater if the end user is reaching out to you instead of the other way around.

My position with just getting started is that I'm trying to build my cash flow on a few quicker transactions if at all possible so I can have more to invest.

 

[Domain.BUZZ]

For high quality domains, I typically like to wait out the short term capital gains period. For the U.S., that's one year; not sure what it is in other countries. Depending on your tax bracket, this can save you a ton of money at the end of the year.

On the other hand, if you're trying to raise cash with some quick flips, then you may not want to wait that long.

 

[Dann-o]

For high quality domains, I typically like to wait out the short term capital gains period. For the U.S., that's one year; not sure what it is in other countries. Depending on your tax bracket, this can save you a ton of money at the end of the year.

On the other hand, if you're trying to raise cash with some quick flips, then you may not want to wait that long.

I'm loosely familiar with capital gains laws, but for some reason didn't know it applied to domains.

 

[Domain.BUZZ]

I'm loosely familiar with capital gains laws, but for some reason didn't know it applied to domains.

It depends. If you "flip" domains frequently, then the IRS will likely consider you a dealer, in which case, your income will likely be considered operational income. In this scenario, your profit will be treated as regular income tax. But if you treat your domains as investments - as I do - then you will be subject to (more favorable) capital gains tax rates. And if you hold on to the assets for more than a year, then you can get the best tax rate of all - the long term capital gains rate.

Having said all that, I'm not a tax expert. For more details, I highly recommend https://www.dntaxguide.com/ (no affiliation).

 

[Dann-o]

It depends. If you "flip" domains frequently, then the IRS will likely consider you a dealer, in which case, your income will likely be considered operational income. In this scenario, your profit will be treated as regular income tax. But if you treat your domains as investments - as I do - then you will be subject to (more favorable) capital gains tax rates. And if you hold on to the assets for more than a year, then you can get the best tax rate of all - the long term capital gains rate.

Having said all that, I'm not a tax expert. For more details, I highly recommend https://www.dntaxguide.com/ (no affiliation).

Much thanks!

I knew about capital gains/losses as far as real estate and stocks go--I assumed domains were always taxed at the personal income rate. Thanks for bringing this to my attention, might save me a lot of money, as you said.

 

[Theydon]

I usually spend the first week gathering end user info which gives me time to fully research the market and consider what I want out of the name, then I get down to contacting them and trying to sell. I 100% believe in pro-active sales.

 

[Theo]

Consult with a CPA to get educated on the many benefits of holding domains for a year before selling. While capital gains rates have increased in recent years, they are below the regular income rates.

 

[Biggie]

That's an interesting strategy that I hadn't really heard advocated before.

Care to elaborate on the benefit of not being proactive?

Not trying to put words in Biggie's mouth (so feel free to correct me), but I think he's basically just saying that the name should be able to sell itself if it's good enough, and also your negotiating position and therefore profit would be greater if the end user is reaching out to you instead of the other way around.

hi Dann-o

you did excellent job, of saying the words, you thought I would say, in translating the intent of my reply.

Thanks

though sometimes you can't wait on every name, all the time
at some point turnover may be necessary, depending on the number of/lack of inquiries and amounts offered for any specific domain that fits the scenario. or if and when there is no residual cash-flow.

"flippers", mainly depend on moving inventory and if you can't wait then you'll take lowest return.

while on the other hand, "investors" will flip when the opportunity suits them.

the "need to sell or not" is leverage.

imo....