Great Domains Represent Generational Wealth and why Valuation Tools are a Cancer on this Industry!

Morning Folks!!

There are folks that flip mobile homes and make a living. There are guys that sell mansions and they make much more and they work a lot less! They make many livings!

I have referred to Domains as "Generational Wealth" for DECADES! What does that mean? It means I don't intend nor expect to sell my domains in my lifetime. The assets will roll over to the next generation. In my case I have no kids that I am aware of and so I have set up a foundation that will run long after I do.

I have never been in a rush to sell. Quite the opposite. My entire goal was to preserve my entire portfolio/collection as long as I could. I never wanted to sell Men.com. But I had just gone thru a divorce that cost me millions and I was cash poor. So I had no choice and regretted it for years. But at the same time I used it as an example to point to that helped the value of all domains of value and also parlayed that into the credibility to start TRAFFIC.

Point is except for the Men.com sale I put myself in a financial position to never be FORCED to take a BAD offer! Isn't that the key?? Isn't that the key from selling from a strong position vs a weak one??

When I was selling my visitors on my domains I would rather piss those valuable visitors in the ocean than give them away to people that wanted to lowball me f0r that traffic.

In my world I don't do budgets. I just do it RIGHT and figure it will come out fine at the end. I learned a long time ago not to be a penny pincher. What does that mean. It means when you see a domain for $1000 and you know it is worth $100k, just give the guy the $1,000. Don't have to make a $500 offer first! Why? Because you will lose gems by being cute. That's much more costly in the long run.

Everyone gives advice but very few tell you how much they have made in domaining. Isn't that a key qualifier? You bet it is!! I play the game different and thus I get different results. But I have never hid how I play the game. Been about as transparent as any business can be because it was in my best self interest as well as yours to be public about my sales. Estibot brings values down. Rick Schwartz brings values up.

You are all so worried about Verisign raising their prices but that war was fought 10 years ago and domainers were AWOL! The bigger threat is Estibot and all the valuation tools out there. They are costing this industry and YOU many $$$$. It helps the weak to stay weak and prevents the strong from getting stronger. The way I look at it, it is a cancer on the industry. It's bogus. It's not even good for know-nothing rookies! It should be denounced far, loud and wide!!

I hate talking about ROI. Means nothing to me. I don't care about percentages. I care about long tern value. I care about potential. I care about marketability. And I don't care when I sell. I care that I sell it for an appropriate value. But much of the value has NOTHING TO DO WITH THE DOMAIN NAME ITSELF!! Need, want, desire, circumstance, potential, marketability and the list goes on and on before you even get to the domain itself. But keep selling on a 1 dimensional level like most do and you will keep getting much less than you asset is worth.

If you want to value a domain correctly you have to look at how powerful that domain might become in the right hands with the right idea at the right time and circumstance. I don't fish for bait, I don't fish for a meal, I fish for whales. When a whale is caught you eat for YEARS! You are not dependent on selling your assets to pay bills.

The single biggest reason domainers have problems is they don't really understand domains. So they don't know the difference between the gems they MIGHT own to the pigeon shit that they definitely do own. And since they are lazy, they rely on Estibot to help them make decisions. Decisions what to buy and decisions what to sell for. That's just plain STUPID!

Domains were and sometimes are like Oil Wells. Now that most of the traffic (oil) has been pumped out and tens of millions of revenue made, I can sell the raw land. Had I done that as I was buying, I would have left the majority of the $$$ I have made in domaining on the table. Tens of millions of dollars in Mineral Rights!!. And many domainers let that money go. They would not use PPC or other ways to monetize. They wanted to keep their domain "Pure". Now the game has changed and many are not in a strong financial position.

To take a domainer seriously I ask one simple question. Their ability to quickly answer says it all. "Just tell me your 3 best domains".  I don't want the list of 5000. I just want to know what you would consider your top 3. From that, I know a whole lot!

That means if you don't have 3 impressive domains, maybe you are not playing the game right. I know domainers that have had 250,000 names and not one worth a penny and I know "Jessse" that owns 10 domains that are absolute killer one word industries!

As a domain investor I feel just as comfortable and maybe more comfortable going to sleep with my domain assets at a safe registrar than $$$ in the bank. When I buy a domain those $$$ are GONE!! But gone for that domain as another one will sell and allow me to parlay, parlay, parlay.

I rarely buy a domain over $5000. Most are under $2000.I like $500-$1000. That is where OPPORTUNITY LIVES!!

I believe LLL.com is solid. But that does not mean as a domainer if you have $100k that you buy 4 LLL.com domains. That's a bad way to go! And if you do, just make sure you don't need those $$$ back in the next 5-10-20 years.

When you buy and sell with my mindset it's such a different game. I am continually buying but ONLY when I see something I am willing to own and even if it is generational. I want to be PROUD to add a domain to my collection. Motherf*ckers.com is a perfect example. I don't buy to sell. I buy to corral POWER! A great domain is also great power when used correctly!

Just like raw land and real estate are generational, so are domains if you play the game the right way. If not, you know where it leads to. Look  at all the undeveloped land in the world still today. Thousands of years and still nothing built on it. Then one day, it changes. It is like Popcorn. You never know which domain will pop next. You job is to make sure you have POPCORN in the pot and not pigeon shit. Pigeon shit will never pop! It rots!

Rick Schwartz

 



19 thoughts on “Great Domains Represent Generational Wealth and why Valuation Tools are a Cancer on this Industry!

  1. Jay

    Right about appraisal hurting real domainers. Domainers that want fair price from serious enduser. There are EMD 2 words getting 1.5m m/v with $1 CPC – automated appraisals under $200k.

    These same kind of EMD are ranking #1 in search engine, surely getting 100,000’s of hits per month. Promoting whatever they want to promote. That’s the power. Surely worth multiples more than bots suggest. Hindering REAL sales of REAL domains.

    Only a pipedream for noobs. Making them think their domain that has 0.0000000000001% real chance of EVER selling is worth $500-2000.

    Reply
    1. Jay

      Further, those are just HARD stats. Obviously can’t even value based on the numbers. Forget brandablilty, sound test, future growth outlooks, and so many more variables.

      Reply
    2. John

      It’s hurting other players in the industry too but they are apparently unable to realize that.

      Reply
  2. J.G.

    Since the evaluation tools out there are inaccurate, do you plan on making evaluations for a fee since you have the real actual knowledge and experience for this?

    Reply
    1. J.G.

      OK saw this now after rereading: “But much of the value has NOTHING TO DO WITH THE DOMAIN NAME ITSELF!!”

      Reply
      1. staff

        Operational space create value ($+ more than one mode). Value-creating or value-capturing (significant difference). If value is 10m customers, the name is worth 500k (to you & them), … otherwise 5k. imo

        Reply
  3. Mic

    The real value of domains is not a set price. The real answer? it depends.

    It depends who’s selling, who’s buying, their positions, needs, wants, and of course circumstances.

    Men.com was a 1.3M and could have been a 10M. It could have also been 100K.

    There’s a really nice video about life, and how real world valuation come into play.

    https://www.youtube.com/watch?v=_HcB9wqooF0

    Reply
  4. Jeff Schneider

    Hello Rick,
    ALL Appraisal systems are all missing a very nuanced Strategic Point. They only consider the sales price of a (.COM Equimoditty Platform Asset). They all completely ignore the strategic and most powerful Equity Sharing % arrangements. This is a HUGE COSTLY Tactical mistake !
    Remember Ricks advice to emulate others more successful than yourself. REMEMBER that Rick , just added 642000 to his bottom line by simply demanding a 1.5% sharing arrangement to be a requirement for closure of his latest negotiated victory. Requiring % sharing arrangements when negotiating a sale can often triple bottom line results. Rick just proved this statement correct by adding 642000 to his bottom line by simply demanding a 1.5% sharing arrangement. Be sure to read this post of his = (Rick adds 642000 to the teem.com Sale!) Rick is a master at this game, We suggest you copy him. JAS
    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master https://www.UseBiz.com

    Reply
  5. Garett

    I appreciate your insights Rick and it really helps us all shift our mindsets regarding valuation and opportunity.

    So you only sell 1-3 domains out of your 6,500 each year?

    Reply
  6. Jose

    Today in this post there are two points that you have never written before at least in these last returns.

    It is appreciated that you when you see a domain that is for sale at $ 1000 do not go down to $ 500 this is done by the vast majority of good domainers who consider themselves better than others.

    Even as you write is domain $ 1000 has this value so the same must have this figure.

    Many do not think like you the value of the domain is the least interesting thing is to buy it for $ 250 and then sell for $ 15,000 then the domain have this value and if they lower the figure are between $ 5,000 and $ 10,000 then they put a figure they despise those who have previously offered to buy for only $ 250 because for these the value of the domain is the latter what they offer and pay.

    It is also you are sincerely buy between $ 500 to $ 1000.

    There are many domainer of its size in this profession of buying and selling domains that give buy by a similiar and it turns out that then only pay $ 250 this is the difference in I think that to be able to sell a premium domain with a lot of value in my situation as a domainer is to have a broker on the other hand I know that I sell very badly but that is what there is.

    I write two domains (com) of which I have a value of my own for sale, if you or some other domainer that make comments on your blog you want to give your opinion I accept them all are always better.

    dieseles.com $ 200,000 – aof3.com $ 150,000

    These two be at parkingcrew.com

    Happy Day.
    Jose.

    Reply
  7. Mark Thorpe

    I agree, automated domain appraisals are hurting the domain industry.
    Like NameFind.com uses their GoDaddy Domain Value Appraisal tool to value domains they buy and sell.
    But hey, everyone else should use it, right?!

    As for Estibot, their appraisals are way off. You’re better off guessing the value of a domain name.

    Reply
  8. Logan Flatt

    Rick has really created a great mental screening tool for all domain investors with this post:

    As you sift through a list of dropping domain names, ask yourself “Is this a generational domain name?” or “Is this domain name heirloom quality?” before you place a bid at the auctions.

    Such a great quality control check to counter the typical investor’s tendency to bid on pigeon shit domain names.

    Thank you Rick!

    Reply
  9. John

    This blog post should not only be “required reading” but you should get a special industry award just for it.

    1. “Oil wells” – When I first got into domaining in 2001, one of the first things I did was read the “Domain Names for Dummies” book. You were featured prominently in it, and I remember how you were quoted as describing ebid.com as an “oil well” because it had been earning you ~$2,000 a day just from PPC.

    2. Men.com – Yes, a classic example of a famous sale that was nonetheless actually a steal for the buyer as I commented the other day, and you have explained why in a way that people understand.

    3. “3 best domains” – I have a rare special kind of domain worth $50 million minimum and certainly more, but since I’m just an anonymous troll in “stealth mode” all these years ;) I don’t mind any normally expected thoughts about that. :-) But people know and can see I’m anything but. ;)

    4. “I rarely buy a domain over $5000. Most are under $2000.I like $500-$1000.” – Rick Scwartz, you lowballer. :-)

    5. Everything you said about Estibot and “valuation” tools – So well said, can’t say it enough.

    Loved this post and you can bet I’ll be sharing it and already have.

    Reply
  10. Oliver

    Hi Rick, This post is great!

    Your advise to get in a stronger financial position so you are never forced to accept a bad offer just to pay bills is excellent advise.

    Unfortunately, I recently let one of my top three domains go for 5K because I needed the money to rent a house closer to my job. I instantly regretted it but I felt I had to take it because I was commuting 150 miles per day and needed to move asap.

    Also I no longer care what estibot or any appraisal systems says. Now I only extend the registration on the domains that I consider to be killer while I let most expire because I am starting to realize which ones are pigeon shit.

    I have worked in the financial print industry for 20 years and so of course I consider FinancialPrint.com to be one of my top three domains. The other top two are probably LakesideClassic.com and CannabisJerky.com. Hopefully these are are not crap because if they are then all my other domains are as well.

    Thanks for your insight!

    Oliver

    Reply
  11. Jeff Schneider

    Hello Rick,
    We are now adding Stock options as a requirement for closure, along with % ownership sharing requirements on our (.COM Equimoditty Platform Asset (Tax Shelters) ). We believe this will be very common place in the future.

    The Web Business Configurater or Web Business Incubator, is collectively being formulated by more than one Entity as we speak. In the near future there will be a Cloud Based, Turnkey Business Configurater, designed to take Online Business Expansion to the next Level. There will be resistance from certain factions, who may try to block this needed Evolutionary Disruption. Those who are early adopters to this coming Platform, will be the futures new Internet Powerhouses. Its end result will culminate into the most rapid and dramatic Capital Expansion, the world has ever experienced. (.COM Equimoditty Platform Asset (Tax Shelters) ) will comprise its principal base JAS 9/29/18

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Intelligence,Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master ) https://www.UseBiz.com

    Reply
  12. Jeff Schneider

    Hello Rick,
    The Google Ad Platform is its own Algorithm Controlled Traffic Monopoly.
    If you are lucky enough to own and control your own .COM Profit Center (OPERATING OUTSIDE THE GOOGLE TRAFFIC MONOPOLY) you in effect own and control your own Traffic Monopoly. POWERFUL !

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Intelligence,Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master ) https://www.UseBiz.com

    Reply
  13. Jeff Schneider

    Hello Rick,
    Blockchain is a very powerful Technology, and is destined to obsolesce many preceding technologies. Our (Contact Group)Think Tank predict Block Chain Technology or its hybrid ,will spell Certain Demise of SEM Marketing Strategies. JAS

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) Former ( Rockefeller I.B.E.C. Marketing Intelligence Analyst/Strategist) (Licensed C.B.O.E. Commodity Hedge Strategist) ( Domain Master) ( UseBiz.com )

    Reply

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