Eric Borgos had put the domain weights.com on auction at Flippa a few weeks back, the auction ended unsold. After the auction the domain was sold in a post auction negotiation for $36,500.
The domain was purchased in May of 2012 for $32,000. At the time time Mike Berkens wrote a post congratulating Eric on another great buy.
When I spoke to Eric he told me he sold the domain for a loss actually.
I am paying a 20% commission (10% to flippa, 5% to the primary broker, and 5% to a co-broker), and we added the escrow.com fee to the price, so my net is only $28,800 which is not so great, but at this point I have shopped it around enough to know that I probably won’t get that much higher for it, so I might as well sell it while I have a willing buyer. I think it is a great deal for the buyer though, since they plan to start a real business on it.
Eric as an experienced domain investor did what I think a lot of less experienced domain investors are not willing to do, and that is sell a domain for a loss. I have brokered many deals where the best offer was a five percent loss. The seller felt like he could not take a loss, I understand the frustration as no one wants to take a loss on a sale. I have felt that frustration personally.
No one wants to sell a stock for a loss either, but if selling at $37 is the right move for a stock heading to $26, you make the move. Of course domain investors don’t have a liquid market to see the value of their domain on a day in and day out basis.
All domain transactions are not profitable and if you have actually worked the name or had a professional work the name, you have to take a long hard look at whether there are better opportunities out there for the money tied up in the domain that you are selling. Experienced domain investors are more likely to make that call than those who are new to the business. We all hope this is not a frequent occurrence, but sometimes its the right move.
Domenclature.com says
Borgos’ numbers are real numbers in all his transactions. When he reports a sale you can take that number as REAL, loss or profit, and that is a big deal. If you take a gander at his reported sales, you begin to get a gauge of what the real market numbers are.
Tony says
How much does it cost to wait for the right buyer for weights.com? $10/yr? If you spend 32k for a domain, why not $100 more to wait it out 10 years for the big payday? I do not agree with the philosophy in this case.
Raymond Hackney says
Tony you make a valid point in how much does it cost to hold from a renewal standpoint. Eric felt he exhausted all avenues and this was the best price.
The opportunity cost is much greater than the renewal cost, for hypothetical purposes, if the remaining speculative cash someone had sitting around was going to be tied up in say their children’s education, the only available asset they may have is tied up in a domain purchased for $30,000. Holding that name for 10 years means they might have missed out on other opportunities.
Tony says
I understand the opportunity cost of waiting. However, if I’m spending $30k on a domain, I would give it at least 10 years. Heck, I do it for names I spend $500 on. I guess what I’m saying is if you can’t wait that long, don’t spend that much.
Eric Borgos says
The renewal cost of the domain is not the issue, it is what else I could do with the money from selling it. And, it is the risk of holding it for 5-10 years. It could go up, but it also could go down. Mainly though, I was fine with a loss, because my purpose in buying the domain was to either sell it for a big profit (I was originally hoping for $100,000), or to create a site on it. Over 2 years I got to try both, and they both failed. But a loss of $3000 was worth it for me to try those things. Once I had done those things, the domain was worth a lot less to me, so that is why I sold it. I don’t regret any of it.
GeeBee says
It is this candor that makes you a better read than schilling, schwartz or anyone else in this matter. thank you Mr.Borgos
jason Davis says
I agree.
Mike says
Mr. Borgus is a smart man..
todd says
Sold in 2005 for $25,000 then again in 2012 for $32,000 and now again for $36,500. Eric may have lost money in the deal but at least the domain went up in value year after year.