Why I Don't Report My Domain Purchases or Domain Sales | DomainInvesting.com
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Why I Don’t Report My Domain Purchases or Domain Sales

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It’s been said that high value domain sales help improve the domain aftermarket, and I don’t disagree. This has led to the question about why I don’t report my domain sales if it can help other domain investors. I want to share a few reasons about why I don’t generally report the dollar amounts for my sales and/or acquisitions.

Let’s start with the easier question of why I don’t report my domain acquisitions. When I purchase domain names, I usually have a plan to re-sell them, and quickly. If I emailed Ron Jackson or had the seller email Ron to let him know my purchase price, it makes it much more difficult to make a nice profit margin on the sale side of things. Who wants to pay $25,000 for a domain name they know I bought last week for $15,000?

The more difficult question to answer is why I don’t report my domain sales. It could be a “feather in my cap” as they say to report high dollar sales, and it could also help the industry. For instance, if I were to sell a travel domain name for $xxx,xxx, I am sure that would give a comp for someone else to use for their domain sale prices and it might also seem neat to see my name in the DNJournal sales report.

There are a few reasons why I keep my sales quiet. First and foremost, my buyers generally want to keep their acquisitions private or they wouldn’t even know about the DN Journal sales report. They either don’t want people to know what they paid and what they’re buying, or they don’t really care about reporting a domain purchase.

Secondly, since I make my living selling domain names, I don’t want to report sales and have others start buying names in the same areas I am buying/selling. Similarly, if people see me selling high value names in a certain vertical, it will increase my acquisition costs for other similar names that are on the market. To that point, I still don’t understand why those high value long tail insurance domain sales were reported last year because it likely made them all the more expensive for the buyer.

Thirdly, I don’t want a seller to know I just flipped a domain name I bought from him or her for a significant profit. It’s no fun knowing you could have sold a name for more, and I don’t want to cause someone to feel that way. I also don’t want my future acquisition cost to go up if we do business together in the future.

Finally, I don’t want people to know how much money I earn.  That’s for my wife and accountant to know. No offense, but my income isn’t your business, much like you wouldn’t expect to speak with your co-workers or boss about their salary. The only thing I have said and will say is that I make my living off of domain sales, and there was no “family money” involved with my business.

I apologize if this doesn’t help the domain industry as a whole, but I can’t compromise my own business. I do list some of the domain names I have owned and sold, but that’s pretty much it. I trust you understand.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (75)

    BullS

    The only thing I care is when the $$$$$$ comes into my pocket.

    April 6th, 2011 at 5:54 pm

    webuythe.com

    Nice post! Where do you find your buyers? I’m assuming you are selling to endusers….

    Thanks!

    April 6th, 2011 at 5:56 pm

    Elephants are People Too

    I agree….it’s nobody’s business and buyers/sellers would get offended.

    Smart move.

    .

    April 6th, 2011 at 5:59 pm

    Kevin M.

    Amen Elliot. As someone in high end (non domain) enduser sales and broker sales, I totally agree that your points are all right on and very valid. You owe it to no one to tip your selling/buying strategies, and ‘shouldn’t’, whatever the product be.

    April 6th, 2011 at 6:11 pm

    David J Castello

    I have to disagree here, Elliot. We’re still an industry that is not respected by investors at large. Does it matter? Absolutely. If we had 1/1000 the number of players the stock market has our domain name values would skyrocket overnight. The more public learns about the consistency of our marketplace the better it is for all of us.

    April 6th, 2011 at 6:50 pm

    Elliot Silver

    @ David

    We have different objectives here….

    Are you still buying six figures worth of names a year?

    Your objectives are to increase the value of your holdings, while mine are to get good deals!

    :)

    April 6th, 2011 at 6:52 pm

    Adi

    @ Elliot

    I agree with you. I really don’t care about your $$$ but do care about the knowledge you share on your blog.

    April 6th, 2011 at 7:09 pm

    Joe

    As far as each investor is concerned, whether it would be better to disclose the prices really depends on his/her strategy. But, as David has correctly pointed out, doing it is definitely good for the industry in general.

    April 6th, 2011 at 7:16 pm

    David J Castello

    Elliot, that’s like saying you want the real estate industry to stay in the dumps so you can get more deals. Understandable, but you’ll make more money when the economy is booming and reported real estate sales are through the roof. Everybody wins.

    Furthermore, the real sales are with the public/endusers. Selling to other domainers is now a nickel and dime business at best. I had three auctions tell me we’d never get more than 75K-100K for Driven.com. As you know, we sold it to an enduser last month for 225K. And if we had miillions of people buying and selling domains it would have sold for 750K.

    April 6th, 2011 at 7:36 pm

    RH

    @David agree 100 %

    April 6th, 2011 at 7:56 pm

    Mikey

    Agree with Elliot.

    Big sales it helps. Media worldwide cover the news on big sales which has gotta help. People get curious..

    But, when you flip domains like a used car sales man its better for them to keep it quiet. Otherwise in a perfect world everyone would “know the value of a domain name” and never sell it to ‘pro’ domainers. Flipping domains would no exist. As everyone would be waiting to sell it to an end user for 5 figs plus. (extreme example)

    April 6th, 2011 at 8:44 pm

    WeBuyThe.Com

    Elliot,

    Do you flip after holding for 12 months resulting in long term cap tax gains or under 12 month short term gain tax?

    Where are you finding your buyers?

    Thanks,
    WBTDC

    April 6th, 2011 at 9:07 pm

    M

    Interesting. Question: Do you just not use domain marketplaces at all (Sedo, Afternic, etc.), or you do but just ask that they don’t report the sale/sign an NDA ?

    April 6th, 2011 at 10:13 pm

    Uzoma

    I agree with Castello on this one.

    Elliot, I have often disagreed with your positions when it comes to this industry, as you will recall. I have yet to find one of your main positions that help all of us as an industry. You seem to go it alone as far as it benefits you and/or your business. Sometimes that may be necessary, but always? Somehow you still remain very liked and popular! It is no secret that most auction houses, except Sedo, and perhaps Afternic, are having a trouble making sells to domainers; the average domainer is not making any money in his or her investments; the average domainer can’t get Sedo or Afternic to feature their domains in end-user market places. These industry leaders are political in their selections. You witness stupid names sell daily for $XXXXXX daily on Sedo, while yours languishes. I digressed a bit, bottom line is I disagree with you, on maybe 97% of issues relating to domaining.

    April 6th, 2011 at 11:21 pm

      Elliot Silver

      @ Uzoma

      We may disagree 97% of the time when it comes to business, but I’d still have a coffee or a drink with you.

      BTW, I don’t know about liked/popular. I get plenty of nasty messages from phantom people.

      Anyway, I hope people are able to learn from what I share. Being a private domain investor can be a lonely endeavor, and I am very happy that I am able to have discourse with you and others who visit my blog regularly. If you learn one thing from my blog – whether it’s something I do/did or the complete opposite, I hope it helps improve your business.

      With this business, there’s no single right way of doing something.

      April 6th, 2011 at 11:26 pm

    Elliot Silver

    @ WeBuyThe.Com

    I treat domains I flip as inventory regardless of holding period.

    @ M

    I generally sell names on my own. Can’t remember my last sale on a marketplace, although I recently listed a bunch of my names.

    April 6th, 2011 at 11:25 pm

    Mac McAdams

    I always enjoy Davids insights, but have to agree with you Elliot. Most people in sales don’t give their competitors a list of their best customers.
    Mac

    April 6th, 2011 at 11:42 pm

    Josh

    I am with you 100% Elliot, we operate similarly and privacy is crucial not just for our buyers but us in terms of flipping/buying and protecting our investments.

    I learned this the hard way the first year I started with 5 figure sales and thought it cool to report to Ron… it lead to a heart break when future owners of names I inquired about used google.

    I still email Ron often but it is to not report trades :)

    April 6th, 2011 at 11:51 pm

    David J Castello

    @Mac
    Who said anything about giving out lists of customers? My post said the best sales are to endusers. Do you think the person who bought Driven.com is still looking to buy more names? Case in point, we just sold HuntingtonBeachRealEstate.com to a real estate broker for 20k. Previously, I had an offer for 1k for HermosaBeachRealEstate.com from another realtor. When I told him the price was 20k he replied that no one would pay that much for a 4 word real estate domain. This is exactly why we reported the Huntington sale to Ron. As in traditional real estate these create “comps” that benefit us all.

    April 7th, 2011 at 12:08 am

    Elliot Silver

    @ David

    If you wanted to buy NewportBeachRealEstate.com to re-sell to the same buyer, and the owner of that name said, “I will sell the domain name for $20,000 because I saw HuntingtonBeachRealEstate.com sell for the same price” wouldn’t that be upsetting, especially if you could have bought it for $5,000 the week before?

    If you’re still buying domain names, having public comps can hurt you when sellers want end user prices that your sales created.

    April 7th, 2011 at 12:21 am

    David J Castello

    You’ll find you’re cutting off your nose to spite your face. The real sales are to endusers, not domainers, and they want to see comps. The domain industry is becoming more like the real estate world every day – except our industry is doing 10x better. Michael and I thought long and hard about reporting our sales and we both came to the same conclusion that it would benefit us all if we did.

    April 7th, 2011 at 12:29 am

    Rob

    Let me preface this by stating that I agree with you that disclosing your BUY price is against your interests.

    However, your reasoning for not disclosing the SELL price is shaky. Addressing your points:

    1) If a buyer makes it conditional not to disclose his buy price, then OK. However, if they are just not aware that there is a vibrant marketplace or a domain listing for sales, then what harm are you protecting them from? They obviously are unaware nor care. If they were aware or cared they would dictate a non-disclosure before buying. Your altruistic stance is against your own interests because it doesn’t help prop up prices.

    2) Again, you’d serve yourself better by propping up prices in a certain area or vertical than by keeping the prices down by not disclosing sales. There are a lot of hawks that might pounce upon your recent sales and try to copy it, however, your disclosure of sales would set a price point that you should be able to take advantage of. Imagine if successful individual domainers disclosed a recent spat of higher than average sales of .eu domains. You would do yourself a favor by setting a standard or bar higher than letting it be ambiguous. As a seller, you should be want to be able to set the standard for whatever you’re trying to sell by pointing to comps. In the domain industry, the challenge is rarely trying to buy cheap, it’s more often trying to justify a certain price. Recent sales helps that more than it hurts your ability to buy cheap.

    3) Once again, self defeating altruism. When a sale is made, it’s usually the case that both the buyer and seller are happy with the price. When I purchased my house, I didn’t necessarily care that the buyer may have made a profit. I picked a price I was willing to pay, whether the other party made a profit or sold it as a loss was irrelevant to me. It would be naive for any buyer to assume that you weren’t in this business to turn a profit and therefore it’s hard to believe they would be embarrassed by you reporting the sales price. Though, once again, I don’t see a point in revealing the BUY price so the issue is pretty much mute.

    4) There’s a lot of publicly disclosed sales in a variety of different businesses yet rarely are they indicative of actual income. A realtor that’s in the million dollar sales club did not make a million dollars. If you disclose that you sell a domain for 25k but don’t reveal the BUY price, how is anybody to ascertain your profits? You could have hand regged it for $10 or bought it for $21k. That’s a huge discrepancy and therefore it renders most sales prices as meaningless when trying to deduct income…your income figures are safe except from the IRS.

    Eventually it’s your decision and I don’t think you’re necessarily wrong for not disclosing. However, the reasons you lay out are somewhat misguided.

    April 7th, 2011 at 12:39 am

    Brad Mugford

    I agree with Elliot on this one.

    95% of my sales are directly to end users, and there is no real benefit of reporting them.

    Brad

    April 7th, 2011 at 1:45 am

    UnknownDomainer

    @David

    Whilst I see your point of view one of the major differences between Real Estate and Domaining is, ironically, the transparency of pricing.

    I’ve seen domain sales documented as flips of $100 to $5K. The documentation has been verified. Unfortunately the sale was between business partners. Even verified comps are lies in this industry.

    It’s sad when the Real Estate industry has MORE regulation and is in better state of legitimate comps than domaining.

    April 7th, 2011 at 1:49 am

    Chris

    Interesting discussion…..I think one’s take on this depends on your sales strategy & goals.

    If your main revenue game is fast-flipping (mainly) to other domainers, then, I’d say Elliot is right….It simply isn’t in one’s best interests to empower competitors 9who are also your sellers & buyers) with purchase/sales prices for domains you bought yesterday, and intend to flip quickly – or, domains you hope to buy at a good price tomorrow.

    On the other hand, if, as David Castello says, one’s primary goal is to sell to end users – and not domainers – then, the ‘comparison’ argument is very important. In a market where each domain is, effectively, unique – with a unique value to any one user – then, there’s the chance to ‘Make a Market’ for each domain….And, to help make that market, being able to point to a comparable high-value sale is essential. Hence, publicising sale prices is an advantage.

    The trouble with Elliot’s approach (in not reporting sales) is that others are reporting sales every day – and, many of them will be the very comparison prices that he hopes to avoid…

    In short, whilst Elliot isn’t, himself, helping the info-load on sales prices, others – from Sedo onwards – are doing it anyway.

    April 7th, 2011 at 2:07 am

    domainer

    Hmm. OK I will share my 2 cents.

    For most part I agree with Elliot. Why report things and have it impacted the business ? Is frank schilling announcing everything he does? No. Kevin ham? No. Rob grant. No. also a good portion of buyers want nda agreements.

    Also the more you share in sales- it seems the more attacks people get. This is the Jerry springer show of our industry imo. People focus to much time on what other people do. Imo.

    @David. We need a healthy reseller domainer market. Its easy and fast. Also don’t compare yourself to others. People have different measures of success and your in your own league. Elliot has built up a massive portfolio and now generating passive income. He started with 500. Who care turn 500 bucks into 500k min portfolio and has a blog, dogwalkers and geo portfolio. So he is doing something right imo. Your a old timer. Great congratulations. You get it.

    Obviously selling to end users is more profitable but enough with the bullshit imo. Everyone has different objectives and different stages.

    My 2 cents.

    April 7th, 2011 at 2:44 am

    steve

    Yes, but you losers read all the posts by me and others on our sales. I notice on the forums most people reading don’t post their sales either with some lame excuse.
    Funny they are the first ones to read the weekly sales but refuse to post even 1 sale.
    Screw domainers.

    April 7th, 2011 at 3:27 am

    David J Castello

    @domainer
    The beauty of this industry is that you can be in it less than 15 years and be considered an “old timer.” Yes, I do believe we domainers live in dog years :)

    April 7th, 2011 at 3:36 am

    Rod

    @Elliot

    In fact now with this post your potential buyers will know that a dn that you are flipping for 25k was bought for 15k last week :)

    btw, can I ask how much you’re earning Elliot? :)

    @David

    How did you know Driven.com was worth more than 100k? Most people would have jumped to grab a figure like 75-100k ….

    April 7th, 2011 at 3:38 am

      Elliot Silver

      @ Rod

      LOL

      @ Em and Rob

      Good points made by you both.

      @ Unknown

      I’ve seen plenty of those, too. It’s one reason why people need to do their own research to get a gut feel for whether something seems legitimate or not. There are occasionally reported sales that set off alarm bells for me, and I usually discount them in my own records if the history doesn’t jive with what’s being reported.

      April 7th, 2011 at 8:13 am

    em

    Hi Eliot,

    I partially disagree on this one. It is much like real estate. Without any promotion or statement of sales, there is no market. The idea of the market is a public one, public exchange if you will. I know you don’t want others to know what you earn from your domains but without any disclosure, there is no market and most people would not even know about these products. Handling what other people do when they know your financial details is part of the game.

    The problem is that some people have to do the grunt work of promoting and giving full disclosure so the industry can grow a la David Castello and the like. This is an added responsibility. It is a risk giving full disclosure, but how else will any market grow? Yes, one can sit quietly and benefit from an existing market without saying a word but know there are others that are putting themselves on the line and this again is a risk /reward scenario. I don’t see the problem with buyers not wanting to disclose because that is a different story. But as a seller, how do you expect the market to grow without your support? If you are afraid of garnering unwanted attention from disclosure of your sales, well, that’s probably a conflict between your public and private lives. I can empathize…not an easy thing to reconcile.

    April 7th, 2011 at 5:12 am

    Shiphouse

    I can see both David and Elliot’s point. However, from what little I know they are both at very different stages in their career. I guess the question I would ask is how many more names does David own then Elliott? In addition, how much more passive income are the Castello’s portfolios and more importantly developed sites spitting off then Elliots? My guess is the Castellos don’t really need to find names to flip to generate a substantial portion of their income, whereas Elliot has found a niche and is exploiting that and it probably represents a decent portion of his monthly take. Nothing wrong with that. But Elliot, my guess is that as your portfolio grows or as you develop more sites, or develop that one site that is generating your bulk of income, flipping will become less of a priority for you. That is just my guess. I could be way off.

    April 7th, 2011 at 5:37 am

    Simon

    I can see both sides of the coin here.

    We maintain a HUGE database of domain sales and consequently we get asked every now and again to quietly remove domains from the list. The reason behind that is that people dont want to let others know what they paid for a domain (or what it previously sold for several years prior).

    To date we have never removed an entry. This is because we believe that domain sales are an important “record” of the industry and provide detailed comparables to help others value domains.

    If it wasn’t for that resource, the industry would be stuck back in the dark ages with dodgy automated appraisals, and would never move forward.

    Simon

    April 7th, 2011 at 7:41 am

    Johnny

    Hmmm ….
    Some true things said here and there.
    Elliott is right.

    In the end, for so far we can afford, we all build up relationships and conduct business as We like, not as other people like.

    Terms as Underpricing, Overpricing, Fair Market Value etc. have value Only for those people who accept these terms.

    If somebody absolutely want to have a certain car, boat, horse, dog, house, partner, it is of nobody’s business what the price is or what effort is being made to eventually get satisfied.

    I believe it is stupid to draw attention of people who have more resources to something we hardly can afford, and that it is just as unwise to display assets to potential competitors.

    Not to mention that a reported sale is likely to be taxed for the reported sales price of say $1,000,000.00 instead of the real selling price of $25.00 …

    Domains Have no value.
    It is in between the ears.

    Success, Everybody!

    April 7th, 2011 at 9:39 am

      Elliot Silver

      “Not to mention that a reported sale is likely to be taxed for the reported sales price of say $1,000,000.00 instead of the real selling price of $25.00 …”

      @ Johnny

      Underreporting sales on taxes is a very bad move, IMO. There’s enough grey area as is, and that’s something I don’t mess with.

      April 7th, 2011 at 9:41 am

    chris

    Elliot good post – you are not the first person to keep sales to himself. Im sure there are hundreds of people who do the same thing for the same reasons. I would be in the same boat as you. No one needs to know how much money I made from a sale – because its none of anyones business.

    I have been buying vintage toys for years and have flipped just about everything I came across. I recently bought a toy car for less than $200 and flipped it for over $1,200 – im sure if the owner found out what he paid vs what I paid – he would not be happy

    April 7th, 2011 at 10:09 am

    David J Castello

    @Rod
    The actual sales price for Driven.com was 450K spread over 5 years. The Buyer countered with 50% (225K) up front and we took it. How do we know it was worth 450K/225K? That’s an excellent question. Driven.com earned a whopping $15 a month in parking. So, according to SEDO or any domainer it was worth 25K to 50K – if you were lucky. However, my brother Michael and I inhabit a very different world than most domainers. We develop our names into brands and our sales price is based on what we think the name would generate if we developed it. In our opinion, especially in the automotive or self-improvement verticals, Driven.com is worth mid-six figures. Eventually, an enduser came along who thought the same thing. Most domainers are clueless about development and, therefore, are at an extreme disadvantage when negotiating with endusers.

    There are a lot of good arguments here pro and con about reporting sales. However, in any respected industry reporting sales is considered crucial to growth and public acceptance. The fact that so many domainers still want to hide their sales is indicative that our industry is still in its infancy.

    April 7th, 2011 at 11:46 am

      Elliot Silver

      @ David

      Just like you chose to take the cash upfront rather than a greater sum over 5 years, I prefer to sell to domain investors who may pay less than an end user, but I make a profit quickly rather than hanging on to an asset I consider inventory for tax purposes.

      For instance, if I buy a name for $5,000 and then sell it for $10,000, and then I purchase another name for $10,000, I am still on the hook for the $5,000 of profit come tax time. The IRS doesn’t take domain names as payment :)

      April 7th, 2011 at 12:07 pm

    UnknownDomainer

    @David

    “The fact that so many domainers still want to hide their sales is indicative that our industry is still in its infancy.”

    When the legal framework behind the industry is undeveloped?
    When the management behind the internet as a whole is undeveloped?
    When ownership, title, what a domain legally “is” still undeveloped?
    When transnational and international agreements aren’t in place?
    When seemingly 90% of the market using the medium is for non-legal non-ethical gain ?

    I think sales reporting is the least of the issues. It’s why a lot of people in the business act like infants :)

    Dealing with Driven.com at $450K is dealing with real end users, real business, real lawyers, real contracts, ADULT end of the business.

    You’re lost sight of the huge blurry lines that exist everywhere else.

    April 7th, 2011 at 12:08 pm

    David J Castello

    @UnknownDomainer
    You raise great points and should not remain unknown :)

    The 5 points you raised are right on target. Reporting sales (and I believe it is the Seller’s option – not the Buyer’s) is crucial to the evolution of the domain industry. To be frank, many domainer’s think very small. And, believe me, I haven’t lost sight of anything. I help entry-level domainers all the time profit from this fabulous business. I also just had dinner with the producer of a major television show to drum up business about domain investing. After doing some research, this producer was shocked that so much money is trading hands and that most of its participants act with all of the professionalism of a vendor at a Saturday flea market.

    April 7th, 2011 at 12:20 pm

    Elliot Silver

    – When the legal framework behind the industry is undeveloped?

    I agree with you to a point, but there have been issues that have developed precedents, especially as it relates to cybersquatting and theft. One court decision you can look into is the Barcelona.com case, which helped formally establish the rights of geodomain owners.

    – When the management behind the internet as a whole is undeveloped?

    I agree with you.

    – When ownership, title, what a domain legally “is” still undeveloped?

    I agree with you.

    – When transnational and international agreements aren’t in place?

    I disagree with you on this. I have some very good clients who are in Europe and Asia, and we use contracts like any other business would.

    – When seemingly 90% of the market using the medium is for non-legal non-ethical gain ?

    I totally disagree with you. Unless you can back up what you are saying, this is not supported with fact. The majority of people I know who are in this business do it above board (like David). There are people who cybersquat of course and people who thieve and steal from others, but I would put that number at significantly less than the number you quoted, and that would include people who operate in the fringes and never go on domain forums, blogs, or attend conferences.

    This is a business like any other. Companies will do what they can for a competitive advantage. If I had a portfolio like David, Mike Berkens, Frank Schilling, or Rick Schwartz, I would do what I can to make domain values as high as possible. These guys could sell all their names and retire if they wished to do so. At this point in time, it’s advantageous to my company to keep my sales knowledge private. I think it’s the only thing I really keep confidential on my blog.

    April 7th, 2011 at 12:25 pm

    Johnny

    @Elliott,

    Hoho, there is a misunderstanding here.
    I did not say that about underreporting sales related to taxes to stimulate fraud.

    Johnny.

    April 7th, 2011 at 12:44 pm

    UnknownDomainer

    @Elliot
    Some misunderstanding.

    “When transnational and international agreements aren’t in place?”

    Related to legal framework but one step further.

    Say a .CA site links to an .IN site that sells Pharmaceuticals to people in the US?

    Say a Judge in KY says someone in the UK needs to give up their domains ?

    “When seemingly 90% of the market using the medium is for non-legal non-ethical gain ?”

    I’m talking about the business of using sites: copyright infringement, IP infringement, Pharms. etc.

    My point was that people in the industry dealing with names like Driven.com aren’t typically involved with the trivialities of making $2K selling AngiesList.co to AngiesList.com or trying to put up blog spinning articles.

    Once you get there you understand contracts, markets and are dealing with real players you understand the tax implications of everything and have accounting.

    Sure this happens at the $1K under market all the time but do you think David or yourself ever posts on a forum “I’ve been asked for an invoice?! What does that mean?”.

    April 7th, 2011 at 12:55 pm

    Elliot Silver

    @ Unknown

    Fair enough, but we are likely talking about different, but similar things. I was referring to the general domain investment “industry” and I imagine you are talking about the Internet as a whole, since many people who operate illegally would never consider themselves domain investors. Whatever the case may be, I think the 90% figure is very inaccurate.

    April 7th, 2011 at 12:59 pm

    Jim Holleran

    @Elliott,

    I have sold some .tv names in the past that would shock the industry but were NDA. However, I am still in buying mode so keeping things quiet is good for me personally. Plus I don’t need the IRS or my wife to know how much I make (lol)

    Maybe I will go public on some of these sales when I am done buying someday, because it’s fun putting “foots in the naysayers mouths:-))

    April 7th, 2011 at 2:16 pm

    Elliot Silver

    @ Jim

    Your buying power was needed at the .tv auction last month :)

    April 7th, 2011 at 2:18 pm

    Jim Holleran

    @Elliott,

    I was there, and so was my buying power, it’s all about buying low, and selling high to end-users.

    April 7th, 2011 at 3:02 pm

    Rod

    @David

    When you are guys like yourself and the likes of Rick, it’s a lot easier to get the maximum amount out of your properties, but with most of us, we could not and DARE NOT turn down a 75k offer in order to get a higher bid — most people would sell their properties if they could get a 50% ROI unless they’re the Warren Buffets of their fields — having said that there’s only one thing I’d sell for 50% less and that would be the wife …. only kidding of course … I’d give her away for free :)

    April 7th, 2011 at 4:07 pm

    David J Castello

    @Rod
    LOL I hope your wife doesn’t read these posts!
    Seriously, you may be surprised by what you would do if you were in our situation. Driven.com is a great name and we barely let it go for 225K. And the truth be told, we turned down 650K for Cost.com – and the Buyer went away. Regardless, I believe it’s always important to stcik to your guns.

    April 7th, 2011 at 4:50 pm

      Elliot Silver

      “I believe it’s always important to stcik to your guns.”

      Except when you’re hunting problem elephant in Zimbabwe.

      April 7th, 2011 at 5:18 pm

    RichG

    They sharing is caring, but sharing what you paid for domain name doesn’t make sense!

    April 7th, 2011 at 5:17 pm

    David J Castello

    @Elliot:
    I don’t hunt female problem elephants in Zimbabawe. However, tropical birds are a different story :)

    April 7th, 2011 at 5:35 pm

    Mars Davis

    Elliot, great post… I enjoyed reading all the comments!

    I have a real estate background, so I am inclined to be on the side of DISCLOSURE, however…

    I understand that we all have different investing strategies & opinions regarding disclosure, and I respect the opportunity of all domainers to choose whether they want to disclose or not.

    Pick the Strategy that works BEST for you and your FAMILY!

    April 7th, 2011 at 7:05 pm

    Fred Mercaldo

    I think one of the biggest investments people make are their homes, and now everyone can find out what someone paid for their home with a few clicks. The domain industry is still in its infancy, and I believe someday the prices paid will be public knowledge. Mars is correct…we all have different strategies and opinions regarding disclosure, but I am with David here for the most part. And there are major differences between domain flippers and developers….hence the difference of opinion. Flippers want to continually buy at bargain prices, and resell at a profit. However it HAS to be good for the industry and future end user buyers to see reliable comps….so E….selectively disclose some sales prices every now and then….IMO it will help you both immediately and down the road.

    April 7th, 2011 at 8:22 pm

    Fred Mercaldof

    One more thing…..maybe sports teams shouldn’t publish the records of the teams….then the world wouldn’t know that YOUR RED SOX ARE 0-6!!!!!!!!!!!

    April 7th, 2011 at 8:25 pm

    Fred Mercaldo

    One more thing…..maybe sports teams shouldn’t publish the records of the teams….then the world wouldn’t know that YOUR RED SOX ARE 0-6!!!!!!!!!!! :)

    April 7th, 2011 at 8:26 pm

    Dennis Combs

    Be careful what you wish for – you just might get it! The only reason the “value” of real estate is public record is that the government needs that information to be public so it can have a value to tax, not to help with sales. So as the domain market matures the government may sense another revenue opportunity and decide to start to treat domains like they do real estate – thus taxing domains annually, based upon one of three methods they use for traditional commercial real estate – market value, replacement value or the income approach (yes, I am a REALTOR and friends with our local tax assessor!).

    Thus, instead of only paying taxes on any profit from a sale, we may end up paying taxes based upon what the government views as the potential of the name – and they will tax based upon the highest value they can justify. That means if the name has great development potential (even though not yet developed i.e. like a vacant commercial building) they could tax the owner based upon potential income if it was developed.

    So though I would really, really, really like to know what Elliot is getting for his names (and to whom he is selling them!), when the time comes that he is required to do so we should all be prepared for Uncle Sam to seize the opportunity to maximize tax revenue. A certain amount of opaqueness may just be our best friend!

    April 8th, 2011 at 12:00 am

    Johnny

    @Fred Mercaldo:

    Well said, but that’s football …
    At poker, don’t show Your cards if You don’t want to loose.

    In an auction, price is disclosed anyway. No Problem there.
    In other situations, it is up to seller and buyer to agree about disclosure terms.

    Why people want to know past prices?
    Often, because they believe in Fair Market Prices.
    *Blsht* – Aftermarket Domain prices are not regulated.
    The Market, that’s the Seller.
    The Customer, that’s the Interested Buyer.

    People are often upset, because they want to buy things they cannot afford, because they are emotional about people being smarter than them, and because they want to step in business without sufficient knowledge and assets.

    Then, there is the appraising industry that tries to sell all sorts of services based upon their in-house metrics. To believe or not to believe, that’s here the question.

    Why some people disclose some sale prices?
    Because it fits in their strategy to show they can afford it.
    To demonstrate reach and stability.

    By the way:
    Is there anybody else here believing the domain industry is still in it’s infancy?
    This is 2011.

    April 8th, 2011 at 3:21 am

    Rod

    @David

    “And the truth be told, we turned down 650K for Cost.com”

    To me that is absolutely amazing Dave, and a big gamble to take! What if something unexpected happened to the domain industry that even gurus like yourself could not have envisaged?

    There are a whole lot of other things that one can do with a sum like 650k that would be a lot safer IMO — if I owned a premium domain like cost.com and I knew I could get 650k for it now, I would not be able to sleep comfortably for one night, because as I said the depreciation in this commodity could be multifold if an unexpected thing happened to the industry overnight — I would take that money and would try to learn how to trade stocks and shares successfully from a real professional. Doing this at least I could assess the value of my assets on a daily basis. But who is to say that a premium domain name will always keep its value never mind increasing it?

    btw, I could teach you how to trade the stock market if you were interested – lol

    April 8th, 2011 at 5:59 am

    Dave

    In real estate, we often do not report the selling price. It does become a problem for some appraisals. If it does, they just have to come up with more downpayment.

    What is the real value of the domain name and what will somebody pay for the rights to use the property/name is up to the seller and buyer.

    Some reporting is good, but the world does not have to know my profit on my last real estate transaction or domain name sale.

    Sometimes there is just to much information out there, but we might not be able to stop the Internet and the information available.

    April 8th, 2011 at 10:09 am

    David J Castello

    @Rod
    You raise an excellent point, but please be aware that we have been told the same thing since 1997 – and it got really scary when the dotCom industry crashed in 2000. Many people ran for the hills and sold their names, while guys like Frank Schilling bought like crazy and made a fortune.

    My brother and I really believe that domain names are analagous to real estate and that real estate has its cycles, but over time appreciates in value because it (dotCom) is a finite market. I also believe that primary Geodomains and single word generic dotCom are the most valuable based upon their capability to generate revenue and be catalytic to a business’s success. In my opinion, names like these have long legs and a very long future. One reason I believe our industry is still in its infancy is because most of the public still has zero idea what these names are capable of. Because of this, we know the real value of these names is a fraction of what endusers will pay now (with names of this magnitude we never consider domainers as Buyers).

    Every day we hear the same Chicken Little predictions such as domains don’t matter because of SEO (may favorite) or that the coming tsunami of TLDs will dilute the value of dotCom (I believe the opposite will hold true).

    Michael and I don’t always make the right decision, but we always go with our gut. Our Mother, who is our CFO, has been a real estate broker in Florida for 35 years. Watching her gauge and play that market (which is very volatile) was a great education to have when I entered the domain name business.

    April 8th, 2011 at 1:16 pm

    Rod

    @David JC

    I understand everything you’re saying BUT I was talking about unexpected occurrences and incidents which could happen within this industry without a warning — I consider myself an “odds man”, so the question that I would be asking myself had I been in your place, would have been … “would I fancy backing a horse at the odds of 4/6?” i.e. would it be worth to lay 600k in order to win 400? My answer would have been an emphatic no, no matter how certainty the event was …. even if you thought cost.com would offer you a better odds than 4/6 still not worth the risk IMO – but then again I am not in your position and 600k may only mean chicken feed to you, in which case I should go hush and say no more.

    April 8th, 2011 at 2:55 pm

    David J Castello

    @Rod
    LOL 650K is not chicken feed to me. 100K is not chicken feed to me. Both feed a lot of chicks :)

    Yes, I’m an odds man, too. But one of my favorite sayings is by Ralph Waldo Trine – “The Universe rewards the brave.”

    The Fear Factor is the biggest difference between those who have money and those who have a lot of money. The first time I met Frank Schilling I realized we had one thing in common – we’d both risked everything to get what we had. And most business advisors will tell you that is a very stupid thing to do, but for some people it is the only thing to do.

    April 8th, 2011 at 4:46 pm

    John Yeomans

    As for reporting sales…I agree 2/3 with Davd and 1/3 with Elliot.

    They both bring up well articulated philosophies, strategies and rationales relative to their respective standpoints.

    I try and come to a “happy medium” an this ..as I report and/or discuss maybe half of my sales…as I believe that there are transcactions that it is prudent to keep private (even when not mandated in contract by purchasers)…but it is fine and beneficial to report many sales IMHO

    @ Elliot — as for your comment about sticking to your guns … Moniker openly took a shot at reporting there brokerage sale of Guns.com for $800,000 … Bang ! .. just say’in

    As for your notable prowess of quick flips, I still vividly remember you purchased and sold GladiatorSandals.com ….all in less than a week….even Spartacus would be impressed with that.

    FYI: the Johnny above is not me

    April 8th, 2011 at 10:00 pm

    Dennis Combs

    @ Dave – You are incorrect in stating that in real estate we often do not report the sales price – you are required by law to do so! This is done through a form known as the “Declaration of Value”, where you are allowed to notate any of the “consideration” exchanged that is for personal vs. real property, but the value of the real property is legally required to be disclosed so it can be taxed. This is then recorded with the Deed and Groundwater Hazard Statement. You cannot hide from the tax man!

    April 8th, 2011 at 10:07 pm

    Dennis Combs

    @ David J. – I sure wouldn’t use the word “stupid” when seeing the success you’ve had! And as I often explained to my clients back in my stock broker days, the only reason we know the name Bill Gates is that he also bucked the trend towards diversification and concentrated all his assets into Microsoft. Had he diversified he would be just a regular Joe on the street.

    The only proven way to true wealth is through concentration of your wealth and efforts on a specific target – diversification is for asset protection, not asset growth. Of course the vast majority of folks who swing big do strke out and go broke. But without great risk there can be no great reward – and that is why very few people make it to the big time.

    April 8th, 2011 at 10:22 pm

    Stephen Douglas

    El,

    If you are brokering another company’s domain, then by all means, let us know the sale price.

    You act as if you have “something to hide” regarding how much you buy a domain for and how much you resell it. It’s not an embarrassment, my friend, it’s business.

    if the person bases their purchase price on how much YOU paid for the domain, then they’re whiners and instantly identified as losers. They’ll pay what the domain is worth to them.

    So you can brag all day long on prices you’ve paid for domains, because YOU of all people, should be confident that the value of that domain you bought was purchased on a great deal, and your resale of the domain is more of the “retail” amount. There is no shame in that, and any buyer who whines about “you only paid this much” for a particular domain, is doing just that: whining.

    If you sell a big domain, it should be present to RJ so he can add it to his log of great domain being sold – and that’s a PLUS for you my good buddyl

    April 9th, 2011 at 11:20 am

    Dave

    @ Dennis … I never report the purchase price of a new home to the tax man. The building department is the only person that knows the value. The tax man has to figure it out for himself.

    April 9th, 2011 at 12:17 pm

    Fred Mercaldo

    Regarding the “infancy” question….I am still amazed that so many friends of mine do not understand anything about the domaining business. I’m talking about 25-55 years old people that are successful and intelligent, but don’t understand about investing, developing, buying and selling, etc. I just brought a friend of mine into the space, and we are buying some names together. A few years ago he purchased numerous lots of collectible case wines, and had to deal with delivery, storage, fraud issues, etc. He couldn’t believe that domains are secure and no “storage” issues exist! I would guess that a small percentage of people understand domain investing, and until the majority of the world gets involved, yes I would say that this industry is still in its infancy.

    April 9th, 2011 at 1:18 pm

    Rod

    @David JC

    “The Fear Factor is the biggest difference between those who have money and those who have a lot of money”

    But you have lots of money now, so why endanger it? What is it that you would wish to have that you could not buy with 650k? This is even discounting other assets you already have. Remember it’s pointless trying to make billions these days as Warren Buffet & Bill Gates would force you to give 95% of it away to charities anyway!

    I am really concerned that this time cost.com may actually cost you a bit if you were not a bit more cautious than before. I hope that it won’t as you are a really nice guy & besides, I don’t really like to see too many hungry chickens walking around :)

    April 9th, 2011 at 3:58 pm

    Mars Davis

    Does anyone know what percentage of the US population owns at least ONE domain name?

    Just for comparison purposes, Wikipedia states that homeownership in the US has hovered between 62% to 67%, for the last 50 years.

    At what point will the domaining industry NOT be considered in its INFANCY? How many domain name owners are required to consider the industry MORE mature?

    April 9th, 2011 at 4:04 pm

    David J Castello

    @Rod
    Michael and I have great value on paper. However, we are not that liquid and would have made much more money if we had adopted Frank Schilling and Kevin Ham’s strategy of buying hundreds of thousands of names and going for the parking revenue. The truth be told, I saw the same window Frank did, but Michael vetoed it (we both must agree to make a move) because we were working around the clock learning how to develop and monetize our brands (even with the money we make now, we’re still learning). Was that a mistake in 2001? Possibly. Why pass up that kind of revenue? However, Michael and I are both in this for the long haul and we are well aware that a mega brand like Nashville.com could easily progress to a value of $50,000,000. And that one name would be worth more than what Frank or Kevin make in a year.

    April 9th, 2011 at 4:24 pm

    Dave

    If we know the value is $1,000, I might not be able to buy it for a $100. Buying for $20 and a flip for $1,200 is a great rate of return.

    April 9th, 2011 at 5:00 pm

    Johnny

    Whiners …

    From all posts here, I like most that of Stephen Douglas today April 9th 2011:

    “… any buyer who whines about “you only paid this much” for a particular domain, is doing just that: whining. …”

    I believe most domainers do just that:
    Complaining about asking prices, talking about underpricing, overpricing and Fair Market Value etc.

    We see it on forums: “Paid too much for …” – “Not worth …” – “Just reg. fee …”. Lamenting. Pathetic.

    No business people – Just Whiners.
    The kind of people who believe life isn’t fair.
    Business takes strategy – Investment – Markup.

    Not Whining.
    Markup!

    April 10th, 2011 at 2:46 am

    Stephen Douglas

    @ Mikey Castello,

    I’m with you on this domain evaluation choice. “Winning”… I should wait a few weeks more before I use THAT word. LOL

    Hey, we’re all Charlie Sheen in some respects. We have our crazy ideas, and we jump into the mix, but the one thing that’s our escape route is… we buy valuable assets and we work hard to understand how to make those investments work.

    Fascinating, isn’t it!!

    April 10th, 2011 at 11:23 am

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