"Someone who has actually parked domains can probably shed some more light on the business model involved."
...you answered your question perfectly:
"I suspect this is the kind of business that is only profitable on the long tail - you only flip some exceedingly small percentage of your total inventory on a given year, but you can't tell ahead of time which ones are going to be the winners."
Exactly.
That said much of this also has to do with who owns the name, whether they need the money (what you are offering) and a host of other factors to numerous to mention.
As a general rule though I would rather be making an offer to buy a name off someone who owns a vast inventory of names than someone who owns only a few. Why? Because they know that if they pass up your offer they might wait another 7 years to sell that name. So essentially you just have to clear a certain point based on their experience and the names is yours.
Unless of course that person who owns only a few names needs money in which case (well you get my point) I'd rather have that person be the seller.
From my experience I've seen all sorts of things happen. I just helped a startup get a great name for a few hundred dollars that was worth much more simply because the owner didn't even google to see that they obviously would need the name.
...you answered your question perfectly:
"I suspect this is the kind of business that is only profitable on the long tail - you only flip some exceedingly small percentage of your total inventory on a given year, but you can't tell ahead of time which ones are going to be the winners."
Exactly.
That said much of this also has to do with who owns the name, whether they need the money (what you are offering) and a host of other factors to numerous to mention.
As a general rule though I would rather be making an offer to buy a name off someone who owns a vast inventory of names than someone who owns only a few. Why? Because they know that if they pass up your offer they might wait another 7 years to sell that name. So essentially you just have to clear a certain point based on their experience and the names is yours.
Unless of course that person who owns only a few names needs money in which case (well you get my point) I'd rather have that person be the seller.
From my experience I've seen all sorts of things happen. I just helped a startup get a great name for a few hundred dollars that was worth much more simply because the owner didn't even google to see that they obviously would need the name.