Automated Appraisals & Selling At A Loss

In the spirit of “telling it how it is”, I thought I’d bring your attention to a recent blog post by Eric Borgos.

For the record, I don’t know Eric; however his post resonated with me, so I thought I’d share it. Here’s a summary:

1. He “bought the Weights.com domain name for $32,000”.
2. It “appraises for $284,000 on Estibot”.
3. He sold it for $36,500, which ended up being $29,200 after commissions.

In other words, he made a loss. I think its great that Eric shared his story. There are some pretty big lessons in there that will benefit newcomers to the industry.

Here are a few observations I’d make:

1. Just because you buy a great domain name, doesn’t mean you can sell it.
2. Never, ever rely on automated appraisals. If a seller, broker or “domain name guru” starts quoting these prices, they don’t know what they are talking about. It’s as simple as that. End of story.
3. If you don’t have the time or resources to develop or broker it, then holding a name that doesn’t generate cash-flow is pointless.
4. Be careful of the marketplace that you sell in. Personally, I would not have sold a name of that caliber over at Flippa.
5. Selling inventory at a loss, gives you cashflow for other investments.

I hope this gives you a few things to think about and helps you avoid making similar mistakes in future.

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