Rick Schwartz published a post earlier today and while I agree 100% that you’re leaving money on the table when flipping, I’d like to explain that in some cases, that’s not necessarily a bad idea.
Rick’s strategy represents the best approach for his situation and I said this on DomainingTips.com in the past as well: if you’re a well-funded domainer like Rick, flipping is a bad idea.
But the thing is, a lot of domainers aren’t well-funded and in such cases, flipping can be a good temporary business model if and only if you are able to put the liquidity you generate to good use.
If you flip a domain and use the money to buy a depreciating asset like a useless gadget, then flipping was a bad choice. You would have been better off keeping the domain.
But if you flip a domain and use the money to buy something else (another domain, stocks, you name it) that will ultimately generate more money than you would have made by keeping the domain, then flipping was a very good choice.
Sure, nobody can be 100% certain things will unfold exactly that way (that the asset you invest in using the profits obtained by flipping a domain will actually generate more than you would have made by keeping the domain) but as a general rule, I’d say that if you’re confident you’d be able to put the liquidity generated by flipping a domain to better use, go for it.
Once liquidity is no longer an issue for you then I agree with Rick, you should forget about flipping because you’re better off keeping the gems in your portfolio.
What I tried to explain is that for domainers who aren’t liquid enough to be able to make new acquisitions without sacrificing current inventory, flipping can be a good approach.Advertisement: DomainingServers.com lets you host UNLIMITED domains at $0.98/month and we're putting a LIFETIME money back guarantee on the table (if you're not satisfied, we'll issue a full refund). To place an order, click HERE.