Realized Gains
POSTED BY Rick Latona IN Web Sites

Zip-Lining through the canopied rain forest in the Jamaican mountains, I can’t help but to think about Frank Schilling’s post on SevenMile.com. Like most of the big domainers, he doesn’t sell domains and he attempts on his blog to explain why that is so.

Perhaps because I was flying through the trees at night I could focus on the question at hand. When is the right time to sell a name?
George of the Jungle

I think back to my days at an Internet start-up in the mid-nineties. The venture capitalists would rant about how they would only invest in a company with one of three exit strategies. They would need to “go public” so their shares would be liquid, sell the company or the founders would need to buyout the investors.
What was their reason for this way of thinking? They wanted to realize their gains. They were keenly aware of the worthlessness of paper wealth. Gains aren’t realized until the cash is in the bank. Having something worth money is not the same as having money.

I think that many domainers out there have only paper wealth. I’m not speaking of Frank who has both. A good deal of domainers are sitting on names that are worth a pretty penny but generate little income and they refuse to sell the name. I just don’t see the sense in that.

I suppose part of it is personality related. For me, I can sell a name at or slightly below today’s value and feel comfortable that I can do more with that money than what I sold it for. If I was someone that didn’t have faith in my ability to buy something new for far less than today’s value I would struggle with it a bit more.
For now, I’ll take the cash and this little girl on an adventure.

  • http://www.radiocrat.com Mak Ossa

    I think that was an interesting link to SevenMile. Apparently, Frank is a die-hard buy-and-hold domain investor. He’d probably prefer bonds/mutual funds over stocks. While nothing wrong in playing it safe, but for how can one hold domains? Till infinity? Especially if a domain seller knows that a name has a sentimental meaning to a buyer. Why can just name a price and sell the name to the needy buyer at a good price. This cliché applies: “the more you give, the more you shall get. Just like you said, sell a name and you could come with another one even better. I just feel sorry for those desperate buyers and how they were turned down. I bet some of those sought-after names today might not worth pennies tomorrow because people would get alternatives. some how. Some would-be clients are one-in-a-life time. Letting them go is like throwing fortune away.

    Take it easy with those stunts, Rick. You make the beautiful little girl nervous.

  • http://www.elliotsblog.com/index.php/2008/04/03/rick-latona-on-why-to-sell/ Elliot’s Blog | Domain Investing News & Commentary

    [...] Rick Latona makes some good points about why domain owners should consider selling some of their domain names: “I think that many domainers out there have only paper wealth. I’m not speaking of Frank who has both. A good deal of domainers are sitting on names that are worth a pretty penny but generate little income and they refuse to sell the name. I just don’t see the sense in that.“ [...]

  • nina villacrusis

    awww..you have a cute daughter :)

  • http://www.ygrab.com Tivo

    You are a wise man. Realizing what you own before its to late is a great sense of awareness. I agree with your points of view on this one.

  • Harold

    One also needs to keep in mind that fielding and responding to domain sales offers takes time. Negotiating takes up time.

    With an 8hr day, 5 days a week... each hour of Frank's time would be worth somewhere just shy of $10,000. Now, be realistic... how profitable would it be for him to spend even an hour of time total to negotiate domain sales?

    Sure, there are exceptions to every rule, but with his time being this valuable I can certainly see why he finds "other" things to do with it.

  • Jason

    People like Frank don't really have to worry but many domainers who hold and never sell will definitely see some of their names become worthless as technology advances. I'm sure a lot of people who had great hd-dvd names wish they would of sold them before they became obsolete.

  • http://posthits.com/domains/domain-parking/rick-latona-on-why-to-sell/2008/04/06 Rick Latona on Why to Sell | PostHits.com

    [...] Rick Latona makes some good points about why domain owners should consider selling some of their domain names: “I think that many domainers out there have only paper wealth. I’m not speaking of Frank who has both. A good deal of domainers are sitting on names that are worth a pretty penny but generate little income and they refuse to sell the name. I just don’t see the sense in that.“ [...]

  • http://private The Man!

    WOW her mouth really opens wide! She must have been reeeeaaaal scared!

  • http://www.BambooHoldings.com Andrew Rosener

    Sell...Sell...Sell. Inventory turnover is the name of the game. Old inventory gets stinky!

    But if you have a real plan to make a useful domain from your DN, then by all means hold on to it until you have the time & money to complete your mission. But be realistic.

    I would like to know the REAL percentage of total domains sold which are actually sold to an end user? My completely uneducated guess would be 70% are sold between domain investors of some form or another, tell me if I'm wrong?

    My point is this; until a domain is actually sold to someone who has a good faith plan to develop the domain for a purpose other than to generate PPC revenue, it is hard to judge what the real VALUE is (not price). That is what I believe constitutes a domain which improves the quality of the internet community.

    More domains need to be brought to "main street" in order to faster promote the real intrinsic value of these domain names to the business owners who could ultimately profit from them.

    More customers = Higher prices. No disputing that.

    After ranting and raving...I offer my services :-) http://www.BambooHoldings.com

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