Do you look at dollar amount or ROI when pricing your domains (or neither)

dollars

When I first started selling domains I had all these weird rules for myself. I told myself things like, “I’ll never sell a domain name for under $1,500 because someone out there can definitely afford at least $1,500, and heck that money isn’t going to change my life in any way.” After a while, I realized those rules were actually pretty stupid, since domain investing wasn’t a full-time business I was running, it was an investment vehicle I was using instead of your typical investment vehicles – real estate and stocks.

Fast forward to today and I honestly don’t have any hard and fast rule except that I need to at least double my money on every sale I make. Anywhere else that would sound like the greediest statement in the world, but in the domain world I think most people would say I leave a lot of money on the table…and at times I probably do, but I’m ROI focused.

I’m not a domain expert, and as someone that doesn’t spend my time focused on domain names…I’ll probably never be an expert. What I can do is try to be a good investor and hit the goals I set out for myself, and hopefully also exceed the ROI I’d make in real estate or stocks. I just sold a domain today for $5,000 (around $4,200 after Sedo’s commission) and a friend of mine in the industry told me I could have sold it for 3x that. But I paid $99 for the domain, and including renewal fees I’m all in for around $200…so at over 20x ROI, I’m okay leaving that money on the table to make the deal happen now.

What do you think? Should you focus on getting top dollar for your domains or instead focus on getting a good ROI? I want to hear from you. Comment and let your voice be heard!

{ 6 comments… add one }

  • Vinod R June 20, 2017, 9:21 pm

    The example you have quoted is having a good ROI perspective, so if we leave some money on the table it’s better than losing the deal, but confusion comes when we bought a name for 100$ and we get an offer for 500$, we know its a good ROI but most of us will not be able to make the sale happen. We might be of the belief that we will leave too much money on the table.

    I also do not think that if you bought a name for 100$ and someone offered you 200$ you would sell it, as per your statement even though that doubles your money.

    Reply
  • DNVIA June 20, 2017, 11:39 pm

    Hi. In my case I have two types of investment strategies. The first to achieve an ROI close to x100, with the best names and the second to achieve enough ROI to be able to keep the best names at least 10 years in my portfolio. It works for me at the moment. The important thing is to always have enough balance to make the decisions of new purchases and renewals without the tension of the red numbers.

    Reply
  • AbdulBasit Makrani June 21, 2017, 2:46 am

    Depends on the situation but most of the time it’s getting top dollars than focusing completely on ROI.
    Congrats on selling the name Morgan! Would you like to share the name?

    Reply
  • Hemant June 21, 2017, 4:07 am

    I guess it was Arkad.com bought by the obvious Australian company.
    Congratulations. Nice sell.

    Reply
  • Mike Brady June 21, 2017, 10:43 am

    Morgan
    Your ROI philosophy makes so much sense to me as an investment real estate guy for almost 30 years
    -Drive for show, putt for dough
    -Focus on shortening the turn, I.e. Get it out the door fast and move on to the next
    -Consistent 20% annualized ROI is legendary return in the rest of the investing world

    Those of us who come from a different investing background are amazed at the returns that those who started in domain investing think are unacceptable.

    I really am enjoying this new venue for investing! There is room for all of us here, no matter what your investing philosophy

    Thanks for the article

    Reply
  • Yury June 26, 2017, 2:37 pm

    You can make a lot of money and still have a low ROI. The higher the acquisition/re-seller price of the domain, the lower the ROI is going to be. What good is a large ROI if you only make a few dollars from it.

    Reply

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