Here it is – my interview with Giuseppe Graziano on investing in liquid domains

4. What kind of margin should investors expect to see on liquid domains? i.e. should I expect to buy at 50%-off the liquid value, 25% off, etc?

 

There is a sensible saying in real estate: “You make money on the buy”. The same rule applies to domains. If you can buy a domain at 50% off its floor price, fantastic! If you manage to do that, you stand to make 50%+ in profit when you sell it. The issue though is that liquid domains is a competitive market and there are lines of investors wanting to buy at 50% off. Just imagine selling an apartment in Manhattan (or central Lisbon, these days) – how many buyers do you think would queue up to buy at half price? Tons!  

 

More realistically, it is easier to catch opportunities at 10-20% off, although even these are rare. It is easier to find great deals if you are ready to buy high ticket items (like 2Ls .com) or if you buy in large volumes.

5. While the word “liquid” is used, what is the realistic time it would take to sell a liquid domain? 

 

I will answer this question the long way. Please bear with me. The liquidity of a domain is directly proportional to the number of buyers interested in buying your domain. If you want to sell a 4 letter .com, there are probably 1,000+ buyers ready to buy your domain around floor price, which means that you can liquidate your domain within a few days, provided you have a way of reaching those buyers, for example through an auction platform. 

 

But if you want to sell a 2 letter .com, the number of buyers out there is much smaller, which means that, unless you are happy taking the first offer that comes along, you would have to wait a longer period, which could take up to several weeks. On average, the longer you can wait, and the more buyers you can reach, the highest is the amount you can sell your domain for. If you read this again slowly, you will realize this is not rocket science.

 

To give you a concrete example, a competent broker would be probably able to get you 6 digits offers for your 2 letter .com within 7 days – just do not expect it to be top dollar. Similar timing, different offers, for a 3L .com. This is the reason why I started LXME.com[5] in the first place, to allow owners to liquidate their 3L .com domains at the highest wholesale price, in the fastest way possible and without needing to rely on an extensive network of people within the industry.

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