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The Reseller Market Might (Probably Will) Experience Short-Term Difficulties

Posted on 13 June 2014 by Andrei

Before I start, I just want to make it clear that this opinion refers exclusively to the reseller (domainer to domainer) market.

Through this post, I’ll try to explain why I think the reseller market will experience short-term difficulties. In other words, why I think there will be liquidity problems and all in all, why the near future doesn’t look very good in terms of domainer to domainer sales.

One word: confusion.

As a result of the new gTLD launches, the reseller market will most likely end up being confused for a certain period of time.

Why?

Because there’s only so much reseller market capital and it now has to chase after opportunities from various directions.

On the one hand, we have “traditional” investment opportunities in the domain space, dot coms and the “existing” (as in pre-new-gTLD) TLDs.

On the other hand though, lots and lots of other opportunities are arising:

Should you buy a new gTLD domain from another domainer?

Should you hand register some during the General Availability phase?

Should you buy premium new gTLDs directly from the registry during the landrush or through one of the various auctions that might/will be organized?

Now multiply these three questions by a few hundred (because even after leaving dot brands aside, there will be hundreds upon hundreds of new gTLDs competing for your attention/capital) and you will understand why the reseller market will most likely end up dealing with liquidity difficulties.

Our industry is small.

Some people will decide to stick with dot coms. Some people will decide to limit themselves to dot coms and the “old” TLDs. Some people will decide to focus on new gTLDs. For others, the answer will be somewhere in the proverbial middle.

In such a small industry, it’s impossible not to deal with liquidity-related difficulties once capital starts to chase so many things.

Even in the pre-new-gTLD climate, selling lots of domain types (leaving highly liquid domains such as short domains aside) wasn’t a walk in the park.

I expect things to become even more difficult.

Let’s say 2-3 years ago, selling decent 2-3 word dot coms (not category killers but decent nonetheless) on the reseller market wasn’t incredibly easy but it wasn’t all that difficult either.

Try doing it now :)

In my opinion, selling to other domainers will become harder and harder for a while.

At least until the reseller market figures out what it wants.

Or until there will be more capital on the table.

Perhaps a combination of both.

That’s just my opinion of course, time will tell what will ultimately happen. Just wanted to share it with you guys so that you can adjust your business model accordingly if you agree with my way of thinking.

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1 Comments For This Post

  1. FW Says:

    If people like Francois start to open platforms like Lend.me, launching them as it is worth, i.e. with very low or none fee to read or submit loan requests, at least for the launch of those sites, so you will see the same or even much more money than before, in this small world as you say.

    This world is little because many guys want it little. Start openingn some platforms with the same aim lend.me appears to have and you will find lenders from outside this small world coming to put money.

    You will find wagons of lenders….(coming from outside this little world). Fresh money for all and to improve the value of all the existing domains. It’s simple, but it seems no one want try to launch platforms for lenders and borrowers based on domains as pawns in a serious manner. You have to promote those platforms even outside the little domain world of course, to succeed. This is the perfect time: new gtlds are teaching the value of domains to all, so out there there are many new prospects lenders and even much more there will be in the future.

    Do you think this has no sense if you want to sell domains and not borrow money? Wrong: the interests you pay will come back in your pockets through the increasing value of all the decent domains: an alive and not a dead market will do it (and you could even develop some of your domains adding even more value to all…, forced to that by the interests you will have to pay). Keep the money flowing, that is what really matter. And in particular if that is fresh money, coming from outside this little world.

 
 
         
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