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.
Of course, I follow Rick’s antics, thoughts, spats, and other rare dispositions relating to business and domaining. The following tweet captured my attention and spawned this very post.
— 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 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 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 and is not for the faint of heart. You nor I, 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 hand-registration domain.
Read the horror stories of domaining first before the “easy money” bug strikes you.
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 will take at least 5 years if not longer, to determine your domain investing strategy.
I told you a few don’ts, and now I will 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 totally 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 flipping domains by the day or week was not my forte. Many personalities make money with this strategy across several domain auction platforms.
However, I likely fall into the category of those who’d lose their shirt and house doing so full-time.
This doesn’t mean that I don’t condone flipping domain names. It simply means I don’t flip very often.
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, web development, and search marketing. I’ve had many developed websites flop, crash, and burn more often than succeed.
The Domain Parker
It’s all about domain value and type-in traffic. I’m not saying it’s impossible to make money in parking. 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 a nice monthly or quarterly date for my wife and me.
The Domain Lessor
Leasing developed websites, although this could be categorized as domain development, 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.
I won a geo service domain in an expired domain auction a few years back. 11 days after having the domain transferred to my account and a 5-6 page website developed, the site ranked 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 found a partner to complete the work and lease the website from me for $250 per month. After the first year, I wisened up 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 been unable 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 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 expiring daily, you would think someone would devise a leasing domain traffic system. 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 kick the tires, see what 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.
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 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, turning eye-popping ROIs on domains is quite possible when you’re in it for the long run. 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 is quite a boring experience, 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 types 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, which most would scoff at.
I’ll admit…domain investing, for me, is not sexy. 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 not have 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 lightning-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.