Being a Follower Can Be Difficult
In the game of American football, the wide receiver generally has the advantage over the cornerback because he knows the route he has been assigned to run and catch a pass. If speed, skill, and football intellect are equal, the wide receiver should be able to get open to catch a pass from the quarterback.
Last night, I was reviewing FreshDrop’s NameJet list of expiring domain names to back order. I came across a domain name that is in the same vertical a company spent tens (maybe even hundreds) of thousands of dollars acquiring a few years ago. I think the company would have paid high 3 or low 4 figures for it 2-3 years ago, and it didn’t have any bidders.
Much like a defensive player is at a disadvantage covering a wide receiver, someone who is a follower in the domain space is at a similar disadvantage. If you are only buying domain names because you know another company has been buying them, you might be out of luck if/when the company changes strategy or no longer spends money on domain name acquisitions. This is especially important if the domain investor is buying domain names in the aftermarket (as opposed to hand registrations), spending a considerable sum of money with the hopes of selling to one buyer.
I think it is wise to see what some of the bigger companies are buying, and perhaps that insight can help guide you when buying your own domain names for resale. However, you should always have a backup plan if the domain name isn’t of interest or if that company pivots from its strategy. You want to buy names that several companies would also want to own, not just one potential prospect.
I’ve made many deals on names that I bought specifically because I thought a company would want to buy them. I’ve also been stuck with quite a few names as well. If you get stuck with too much unsellable inventory, you’re going to have a tough time getting out of the hole.
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