If I were to start domain investing today…
Quick Summary of Contents
Over the last few weeks, Rick Schwartz has fallen beyond head over heels in love with Twitter.
While his blog has long been silent without new posts, there is no commentary shortage via his @DomainKing Twitter account.
Of course, I follow Rick’s antics, thoughts, spats and other rare dispositions as they relate to business and domaining. The following tweet captured my attention and spawned this very post.
As I delve into the commentary of replies and rebuttals from Rick’s statement, I came across an intriguing back-and-forth between Rick and Elliot Silver (@DInvesting / DomainInvesting.com).
@DomainKing @thedomains In the last 10 years, how many times have you bought a $2,500 domain name and turned down or sold for $100k+ cash?
— Elliot Silver (@DInvesting) March 27, 2017
Elliot’s question got me thinking about what it would be like to have no domain investing experience and start from ground zero today.
After all, all the good domains are taken, right? I mean, is it really possible to purchase domains at hand-registration fee or up to $2,500, and sell the domains for $100K+?
The short answers are “No” and “Yes” respectively.
It is very possible to purchase domains at hand-registration fee or up to $2,500 TODAY, and sell the domains for $100K+ DECADES later.
But how, and how can you make such a claim? Well, that’s what we’re here to debate.
Let’s be real. Domain investing is hard is not for the faint of heart. You, nor me, will enter into the domain investing industry today and make hundreds of thousands or millions of dollars within weeks of entry.
If you do, then consider it lightening in a bottle.
If you were to start domain investing today without any experience, I caution you to NOT SPEND ONE DIME on blindly bidding and buying domains. Don’t go drunk domaining, with or without alcohol, and binge purchase just any ole’ hand-registration domain.
Seriously, spend time reading the horror stories of domaining first before you’re struck by the “easy money” bug.
Don’t chase the news circuit. Don’t chase the election cycle or latest fad. Don’t blow your savings. Don’t run up credit cards. Don’t blow your inheritance. Don’t quit your day job either.
It’s going to take some time, at least 5 years, if not longer, to determine your domain investing strategy.
I told you a few don’ts and now I’m going to tell you one action to perform to help you find your domain investing strategy.
After investing nearly $12K in a few of the don’ts, I hit the reset button and took a total different approach to domain investing. And just what did I do, you ask?
I asked a simple question: Which of the following could I execute the best and be most profitable based on my skill set, temperament, and experience?
The Domain Flipper
I knew that flipping domains by the day or week is not my forte. There are many personalities making money with this strategy across a number of domain auction platforms.
However, I likely fall into the category of those who’d lose their shirt and house doing so full time.
I’d likely spend my time chasing fads (i.e., new gTLDs, chinese 4C and numeric rush, news cycle, brandables, elections, disasters, celebrity deaths and the list goes on…). It’s just not for me.
This doesn’t mean that I don’t condone flipping domain names. It simply means I don’t flip very often.
In fact, I sell roughly 8-10 domains a year to do a bit of vacationing, Christmas shopping and buy nice things for my wife and kids. Nothing of great volume or focused efforts, just here and there sales.
The Domain Developer
I’ve also spent 15 years in software and web development, and search marketing. I’ve had a number of developed websites to flop, crash, and burn more often than succeed.
So, trying to be the next Mike Cyger (and congrats to him on DNAcademy, DomainSherpa.com, Efty.com, etc.) in development was out of the question for me.
The Domain Parker
Then there’s parking domains with platforms such as ParkLogic.com, RookMedia.net, Uniregistry, DomainNameSales.com and many others.
It’s all about domain value and type-in traffic. I’m not saying it’s impossible to make money in parking. Personally, I believe the parking and making fortunes ship has passed. Parked domains need volume in traffic and low CPC, or mediocre traffic with mid to high CPCs.
I park domains, but don’t expect to strike it rich with one click or many clicks. It’s simply a nice monthly or quarterly date for my wife and me for now.
The Domain Lessor
Leasing developed websites, although could this be categorized as domain developing too, has been one method that I’ve managed to make a decent return on investment. It’s much very much development, but more focused.
A few years back, I won a geo service domain in an expired domain auction. 11 days after having the domain transferred to my account and a 5-6 page website developed, the site was ranking on page one of Google. Calls and emails started trickling in, yet there was a problem. I was not a certified HVAC specialist. After a few searches and calls around Austin, I was able to find a partner to complete the work and lease the website from me for $250 per month. After the first year, I wisened up a bit and negotiated a percentage of monthly sales, which took me from $250 a month to roughly $1800 per month.
Still today, I attempt to wash rinse and repeat with a few websites a year. It’s been a miss and hit type of business to learn as I stumble upon profitable markets and industries. I’ve not been able to master the midas touch with consecutive website successes. It’s a lot of hard work, emailing, phone calling and content writing. Read more and view my video about my geo service domain adventures…
There’s also an opportunity to lease undeveloped domains solely for their type-traffic and redirection traffic. But don’t be deceived and think that you can lease any ole’ domain. It’s just not possible.
One of the challenges with leasing and selling domains in general is that the end user or customer will select a lesser domain if you price your domain too high (lesson learned too many times).
With as many domains that expire daily, you would think that someone would come up with a leasing domain traffic system of some sort. One might exist today, but I can’t think of one off the top of my head.
Nevertheless, leasing domain traffic could be the precursor for a domain that is out of reach in terms of pricing. You could simply kick the tires and see what type of traffic your site receives from leasing a domain, and then choose to buy based on traffic and conversions.
I’ve had a FEW domains to lease short term, but most customers inquiring about the name want to own it outright.
Oh and before I forget… anyone remember leasing opportunities JointVentures.com? A bit before its time, but it might resurface once more… That’s just me speculating like most domain investors. 🙂
The Domain Investor
The Schillings, Schwartzs, Berkens, Manns, Roseners, Cultras and the list of other domainers goes on a mile long. Although they mix and match strategies conducive to their own temperament, they play the game for the long term. They’ve experienced the domain market’s limitless ups and abysmal downs.
In my humble opinion, it is quite possible to turn eye-popping ROI’s on domains when you’re in it for the long run. Quite honestly, this is where I tend to rest and rest well… being a long-term investor.
As a small fish in an ocean of players, domain investing for me is quite a boring experience, and not the glitz, glamour, and fast-moving pace of domain flippers.
But I’m willing to hold domains for 15-20 years. I’m willing to say shovel money into domain renewals year after year while saying no to today’s inquiries. I’m willing to take my time and allow trendy and brandable domains to pass in favor of purchasing generic, timeless, and business-in-a-box type of domains.
Yes, I can’t and don’t participate in most expired domain auctions in favor of purchasing more quality than quantity. Being a long-term investor takes patience and delayed gratification that most would scoff at.
I’ll admit…domain investing for me is not sexy. A bit time consuming it can be to learn how and where you fit into the market and industry. All the good domains are NOT registered or developed. You may have simply not found your domain niche yet, that’s all.
As for me, I’m certain my long term plan will prove to be favorable and profitable in time. For now, it’s a good thing I make a living and scratch my itch to do something in another vocation.
And you can too! Simply take your time and not get in a rush to be blinded by lightening-in-a-bottle domain investing stories of quick riches and a glamorous lifestyle! 😉
Find your domain niche, and scratch that itch until you’re profitably content.
I enjoyed your article. Thanks.
Alvin, really sage advice from experience. I have always been interested in domain investing from around 2001, but couldn’t find any information about how to go about it. I have to admit I was pretty busy at that time running a local ISP and web-hosting company with my wife.
It wasn’t until 2017 when I read about flipping websites and investing in domain names that re-spark my interest. I am still learning, taking in a step at a time. I have book mark your site and following. Thanks again.
Welcome, and be sure to take your time before starting a buying spree. READ, READ, READ… and read some more. Don’t forget to join the conversation over at NamePros.com too. Cheers and best wishes to realizing profitable domain investing and development.
Awesome, I’m edified and motivated by this. By November I’ll be 2years old in Domaining.
I see myself as a Domain Investor; gradually building my portfolio while still learning the ropes.