Good post Rick I learned a lot from dabbling in the baseball card business as a kid. I've seen a lot of entrepreneurs from our generation who talk about the days of trading/buying/selling cards. Gary Vaynerchuk is one that talks a lot about it a lot . . . Aaron Wall even had a post about what he learned from that biz here : http://mollermarketing.com/2009/05/09/aaron-wall-exclusive-interview-on-social-media-marketing/

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Perhaps the baseball card comparison is a bad one, given the sorry state of this collecting hobby.

It's true that the original Honus Wagner card will always command a high price, but just try selling a cal Ripken, Jr. rookie card for big bucks--it's just not going to happen. Too many are floating around. Honus Wagner is rare because Wagner himself put a stop to the production of his image on cigarette cards because he was extremely anti-smoking and didn't want children to associate his "brand" with smoking.

It's the same with premium generic domains; they'll always command a high price, but the mid-price and lower end will fluctuate in value. Also, the average end user will go out of his or her way to find a cheap name at GoDaddy and brand it him or herself. The bottom line: ender users don't think like us, no matter how much we might wish it so.

So, of course, sales will be mostly domainer to domainer. It's the same in the antique business and every other collecting venue. Yes, you'll get the random "end user" of antiques who wants to decorate her or his house with specific antiques, but when you go to an estate sale, it's usually collectors who gather there to find a bargain to stock their stores, which mostly gather dust, for most people would rather decorate their houses with trendy new furniture from, say, Ikea.

Such is the life of collecting.

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I never understood the resistance by domainers to trade domains. I need one domain or another to make my portfolio stronger. In trading when you NEED a domain you also NEED to give something that is worth substantially more to get the domain you want. Not less value. More, much more. That is what makes the trade enticing to begin with. But domainers have resisted since TRAFFIC 2004. Trading for some reason has been tough. But it is also SMART and I really wish more domainers would embrace trading. I have one word prime domains that I would trade that don't do me a lot of good because I may be very weak in a specific market and strong in another. I would like to fortify my strong sector.

I am always open to trading. But if I have 12 Willie Mays rookie Cards and I have No Mickey Mantle, I would easily trade 1 of 12 to fill in and complete my collection regardless that the Rookie Card may be worth many times more. At least with baseball cards you have a choice. Dollars or trade because you have more than one on the market. Domains are unique and therefore trading is even more essential. Domainers that want a specific domain have to FORCE a trade. You force something by giving a deal too good to resist. You don't offer a substandard domain to get one you want. You may offer multiple domains. But you must offer more than you receive. At least in the eyes of the one you want to trade with.

Unfortuantely in my experience someone wants one of my really good domains and they are willing to give me CRAP in return! They are also likely to give me little choice which is also a big mistake. You can also put a formula together for part trde and part cash. Either way, long overdue.

I traded baseball cards as a kid, loved them. I was good at it. The difference between baseball cards and domains isn't just the uniqueness of a domain, but the transparency of what is available from a private collection.

With baseball cards you have shops and, importantly, shows. As a kid, I could go to a baseball card show and walk from booth to booth all day. It was one on one...the seller is right there behind that big display case on the table and he IS willing to deal. Much like Rick said...either a pure trade or cash and trade, but he is there to deal.

I don't really see that in domaining. You have newsletters that are sent out daily or less frequently and you have these auctions at shows...but they don't give you the same "one on one" experience for seeing what a private collector has and showing him or her what you have and then hammering out a deal.

Domainers are too secretive and that's ok...it just doesn't make for fertile ground for mass trading in the same way baseball cards is done.

I understand that you can go to a domaining industry show and try to meet other domainers and maybe see if you can do some selling to each other or trading, but it is nowhere near the same.

Now, if we could have everybody come to a show with "display cases" the way baseball card shows do...then some real trading could begin.

I sell my domain names to whomever will pay me the most money in the shortest period of time. I'd rather buy and sell quickly to another domain investor than wait for weeks or months to make more money from an end user. It's much quicker and easier.

As an example, I sold a name to an end user 2.5 weeks ago, and the transfer finally finished today and Escrow.com payment probably won't be in my account until the end of the week.

Comparing this to a sale to a domain investor, the domain transfer and wire transfer would have been done the same day and I wouldn't have had to have emails/phone calls with buyer, Dotster, Godaddy, and Escrow.com.

@Elliot you're right about that. i sold a domain about a month ago, the end-user still hasnt initiated transfer despite two reminders from me. and the cash is already in my pocket. well i'm not going to waste another minute pulling teeth. however the domain was close to expiration. rather than send another email and get involved in a lengthy communication i've just gone ahead and shelled out the $8 to renew it for them, though it still sits in my account. bizarre.

@Anthony, that's a good idea. I'm going to run with it if you don't mind.

Rick & Rick,

I'm so glad to see domainers with a large audience address this issue. I've been a proponent for years about trading domains but met only resistance from the industry. Rick Schwartz's point about diversification is good (and there are many valid reasons to trade), but we like to trade because we're domain developers, not flippers, and have generic product, service and ccTLD domain names in our portfolio that do not meet the criteria of our geo-niche mass development platform.

To address Rick Schwartz's "CRAP" comment, the way we look at trading is that a even if we "traded down" (say giving up a product name for a less valuable geo-niche domain), we still come out ahead as we'd rather have an investment we can monetize now than one just sitting on the sidelines.

Jay Lohmann

@Rick, I would be happy to give that idea to someone like you that has the talent to run with it. Just make sure to drop me an invite

Kinda funny to see what kind of impact "Sportscard Mania" had on people in a certain age range. I'm basically Aaron Walls age and my own baseball card story was much the same. Started at 9, was selling in shows by the time I was 14. In Facebook'ing some old childhood chums and seeing where their lives have taken them, it's somewhat striking to notice that the 'better' and more serious baseball card traders I knew as a kid have all taken on professions in their adult lives where the operational rudiments that were in play with our childhood baseball card dealing/collecting/trading are being used. There's an unusual number of them who are in finance and investment banking... Show me a 10 year old kid who was a winning baseball card trader in 1989 and I'll show you a grown man who is probably pretty damn good at whatever he does today.

Domains, obviously, are completely different, simply because there is absolutely no fungibility in the domain market. Because of this, domains price more like art, not like commodities and much like the art market, it is driven by forces that aren't predicated on actual 'value'. Without a quantifiable baseline of value, you cannot arbitrate price and if you cannot arbitrate price, you cannot establish a central, standardized market.

Without a central, standardized marketplace you have liquidity issues and with liquidity issues, come a whole host of other 'problems' that have to be overcome.

For the above reasons, we cannot compare domains to baseball cards (or any other fungible product). Further, when dealing in a product that does not have a finite, articulable value, you must sell that product to the person for whom it has the most utility. In the case of domains, this is end-users.

Absent underlying earnings, the domainer-to-domainer model of fluttering around names is predicated on "hope" and "potential" which cannot sustain a market indefinitely. Eventually, that 'potential' must be realized and it will not happen when simply transacting on others who are betting on the same 'potential' you are.

In short: LOL. No.

I simply treat another domainer as an end-user. They're all end users according to me.

There is no reduction or discount in the price. The domain is worth what it is - doesn't matter whom I am selling to. I am not looking to strengthen my portfolio, I am looking to increase my sales and bottom line. I am not collecting, I am selling. This is a business.

Why do I sound so hardened? I learned my lesson several times in the beginning by selling low to people who said they were in the domain business and were going to "improve their portfolio, but in the end they were large companies posing as domainers looking to get a better deal." Large companies with very deep wallets. My mistake.

So, Homey dont play that game anymore. I barely budge on any domain these days. I have bills to pay, they're not going down in price or being discounted simply because I have friends who work at the cable or electric company or a kid that works at the grocery store.

I wouldnt sell my Cal Ripken Jr cards at any less of a price than they're estimated worth, to another card collector or some crazed fan who wants it on display in a frame behind their desk in their office. The card collector is going to eventually sell it to the deep pocketed buyer - why not do that myself?

It only costs $8 or so dollars to renew - its not going to bankrupt me to keep my names until the right buyer purchases them.

ABSOLUTELY AWESOME POST! This is a discussion that was going to happen and hats off to you Rick for bringing it to the table.

I'm constantly buying & selling, and while I regularly insert offers for trades it is most always met with a cautious resistance. I can't remember ever doing a full fledged Trade. I have however enticed "on the fence" buyers by sweetening the cash deal with a bonus domain in the mix. If domainers could see tangibility for liquidity, I think that trades would be much more commonplace.

Nice Post Rick!

I wrote an/the article (got the idea from a comment on Michael's blog) on domains being like baseball cards but the point was not expressing concern about trading domains but the fact that I'm hoping the domain industry doesn't turn into the 1991 of baseball card trading. A domain used to have value based on income or rarity but with parking revenue dropping to all time lows, we are often guessing on the value of domains. Baseball cards were artificially held up by magazines like Beckett's but eventually all these new cards were released destroying the value of all the cards except the oldest and rarest. To me, the new tlds represent the new baseball cards and the dot coms represent the old rare cards. The value of domains to me is still based on latest sales and we need solid end user sales to keep these values high. And like Jay said, it is nice to see someone write about this that actually has readers.

I have traded, bought / sold quite a few domains and generally have made money on most of them. Its true this is definitely a liquid market similar to whats mentioned. Valuable domains and websites sell fast and get alot of interest, and since there are many websites that have auctions etc it looks like this will only grow further.

Nice article, and Anthony's sounds like a winner.

I'm always open to trades; especially for (US) city.coms.

Problem to date is that the proposals I've received (none city.coms) were with domains not worth more than a fourth of the values of the domains they wanted from me.