What does an average domainer make a year?

Your question is almost impossible to answer.

After defining domainer, then define average.

Then as soon as you find a definition for either of those 2 questions...remember this, things will change often. As you grow, learn and your finances and luck changes, so will your next strategy.

I've been pretty involved in domaining for about 4 years now and I have a ton of time invested in domaining. Each year my strategy was quite a bit different. Each year my results were quite a bit different. 2011 was my best year by far. Finally in my 4th year of domaning I could have actually made this my only income, my livelihood...but luckily I have a pretty great real job so I can afford to make a few mistakes here and there...So I seriously have no idea what an average domainer would be since we are all so different and we each have different measures of success.

Heres a bit of advice though, whatever money you do plan on spending, positively plan on losing your first year. If you actually make money in your first year, you're way ahead of the game.

2nd bit of advice, buy a few great domains rather than a bunch of mediocre domains.

Hmmm, now to define "a few great domains"
That depends on your bankroll. Take the total amount of money you wanted to spend, Cut that amount into thirds, or quarters and buy 3 or 4 domains that you can afford with the amount of money.

Then Market the crap out of them. Marketing works.

Last piece of advice: Take that McDonalds job and read NamePros threads on your breaks.

Good Luck,
Vito

I think it's never too late to do domaining but it is getting more difficult and competitive everyday.

In theory you can start with a small amount of money - the barriers to entry are low and the potential rewards are enticing. That's what makes domaining attractive :tu:

For example you can do like this:
Analyze the lists of deleting domains (or better: the prerelease) and buy a few that you know somebody else would want (with reasonable likelihood). The goal is to spot the names that are undervalued.

If you pick domains carefully you should be able to sell at least one for, say $500.

Then you pay your initial investment and reinvest the money into a higher quality domain. You sell it to an end user for $1500. You reinvest, and you trim your portfolio of the same time. You get rid of the nonproductive domains.
You gradually improve the quality of your portfolio. Because you now own quality domains you are making 4-figure sales.
Lather rinse repeat.

Now that's just the theory. Of course there is a gotcha. In order to pick the right domains you will need experience and gut feeling, that take time to acquire. And of course you are not alone, there is competition.

Before you make a profit, you are likely going to sustain losses. Jawed said it well. Most will move on to something else when they realize they built a worthless portfolio and wasted money.

The problem with domains is that you have no guarantee of a steady revenue. Domain sales are unpredictable, some months are very good, some are horrible so it's difficult to rely on that model unless you are doing it on a large scale.
Revenue from parking is not an option either unless you have quality domains that have natural traffic.
To sum up it's no wonder few people make a living on domains.
Domaining as an additional revenue stream is more realistic than as a day job imho.

Jawed said:

For a tiny minority, domaining is a full time career. These are the people who make big bucks and make big headlines tempting other newbies to enter in the industry. This way, the vicious circle goes on.

Click to expand...

The ones who earn are the registrars and commission-based intermediaries like Sedo.

If you exclude all those who gamble on domaining then give up after losing as much as they can stand, which is most people, then the remaining "pro" domainers probably make at least enough every year to cover their renewals.

Domains only have value if there is demand and scarcity, so it is true the winning domainers and registrars and auction houses all need to keep getting new players into the game. A bit like the tobacco industry?

KCsGreat said:

I was just interested to know an estimate of what an average domainer can make a year. I know you can get lucky and hit a big score, but I'm saying just buying and flipping domain names, with average returns, not every single one at end users prices obviously.what is realistic yearly income?

Click to expand...

realistic income is based on anticipation, assumption,and or expectations of a specific domain, or a portfolio's performance... minus original acquisition costs and renewal fee's.

bmugford said:

I think the average domainer loses money.

Brad

Click to expand...

i agree, especially when you consider "all" who buy domains with aspirations of reselling them.

matt2257 said:

If the average domainer loses money, why do they do it? Is it the lure of the big sell one day? Like speculation?

Click to expand...

in a nutshell, yes!

but it's also the very low cost to make "one" domain purchase or investment that attracts and retains so many people, who want to have similar successes like those in the articles/posts they read about.

defaultuser said:

Before ANY of that you need to define DOMAINER

Click to expand...

there are levels of experience, but for arguments sake, let's just say that anyone who buy domains with aspirations of monetizing or reselling them for a profit, is a domainer.

bmugford said:

I don't think they plan to lose money, it just happens with poor investments.

Click to expand...

most don't have a plan, so they lose money

KCsGreat said:

Thank you. For all the answers. I think rookie mistakes will happen, but I figure if i ask, n study, and learn I can make them happen a lot less. Any other info anyone wants to share I am always willing to listen, you can even pm me. I appreciate the help you guys

Click to expand...

asking is always good, there really are no stupid questions when it comes to spending money.


i think what you can make is determined by how much you learn and how much time you put in.

too many newbs look for the quick answers, and always flock to the newest thing.

they waste money buying "picks and shovels" to dig for gold, then don't have capital to compete in the bidding wars if they find a decent name.

all imo...

carob said:

The ones who earn are the registrars and commission-based intermediaries like Sedo.

If you exclude all those who gamble on domaining then give up after losing as much as they can stand, which is most people, then the remaining "pro" domainers probably make at least enough every year to cover their renewals.

Domains only have value if there is demand and scarcity, so it is true the winning domainers and registrars and auction houses all need to keep getting new players into the game. A bit like the tobacco industry?

Click to expand...

I hope people will not only read this but also try to digest this information. It will be hard for most but perhaps a few can benefit from your precise and accurate explanation.

A thorough understanding of basic economic theory would also be helpful to many.

carob said:

Domains only have value if there is demand and scarcity, so it is true the winning domainers and registrars and auction houses all need to keep getting new players into the game. A bit like the tobacco industry?

Click to expand...

It depends what your business model is.

If you have quality domains, there will always be end user demand, so the "domainer" world is almost irrelevant.

Brad

MicroGuy said:

A thorough understanding of basic economic theory would also be helpful to many.

Click to expand...

I can try to explain things in simple terms :D

Simply put, the supply of domains by far exceeds the actual demand. It's difficult to sell stuff that nobody wants. If you find a 'great' domain name that is available, it probably means nobody needs it. In general people don't want to pay more than regfee for a domain. They will only buy for a good reason ie. you have a really great domain that they need for their business.

Of course there are exceptions like names that just dropped, but in general the best domains are already taken.
If you want them, you need to go the right places. They won't always be cheap. The point is not to pay a low price, but to pay a price that leaves room for a good return.
It takes money to make money.

The bottom line is that the market for domain names is limited, after all not everybody needs one, and very few people will buy one on the aftermarket. For that reason, it is necessary to focus on quality because there is no demand for bad domains.

If you are short on funds and unable to invest you may be able to find a niche.
For example some people sell domain lists.
Some are service providers.
Others broker domain names owned by third parties.
Everybody has got skills, you just have to find where to put them in practice.

The average domainer? They make nothing. In fact, they lose hundreds, maybe thousands of dollars a year buying crappy domains.

Those of us who are above-average? Those are the incomes you want to know about.

Great Thread Guys. Really insightful and thought provoking.
I am just coming back into domaining after a long absense and I wasn't massively successful to begin with but I did manage to limit my losses and sell a few domains.
What I have decided this time around is that I am not going to buy anything until I research domaining again for a few months to get a feel for it again and then to stick to .coms to begin with and to peruse the expired lists instead of new hand regs. Well that is my plan anyway, we will see.

I think that we are dealing with the "brass ring" syndrome here for the average domainer. They play the game and they are willing to take losses because they hope for that "big score" they can retire on. If you do it as a business there needs to be a business plan, a work schedule (don't expect to make it big if you are not willing to put in the time) education and perseverance. Yes, there is money to be made, but it is definately not a get rich scheme.

A huge part of Domaining, is based on Speculation. There's no business model behind it. That's why a lot of people are actively peddling their domains, blasting inboxes with hundreds of thousands of email spam.

A lot of people disregard the statistics. They only see the domain sales posted on websites. But never saw the larger picture that billions of others dropped their domains with no buyer.

Speculation works best in a virgin industry. Once the industry is saturated (or buyers have matured), it becomes more difficult to speculate for profit.

alien51 said:

A huge part of Domaining, is based on Speculation. There's no business model behind it.

Click to expand...

Most domainers don't have a business model because they approach it like a hobby. But domaining should be treated like any business.
There should be a business plan as said above.

Domain sales are unpredictable, but the odds increase considerably when you have quality domains. So, if you have good inventory you will be making sales on a regular basis. The money will also pay for renewals and maintain unsold domains. Because the margins are high on domain names, that's what I like in this business.

And of course, you always have to trim your portfolio. The domains that make no revenue and remain unsold after N years will probably be eliminated, unless you develop them.
Cutting losses is essential in any business.
I think many domainers are failing on that because they are either infatuated with their domains or lacking objectivity.

To sum up the idea is to make calculated and educated decisions vs pure speculation.
It can be done.
Companies such Buydomains & Hugedomains are doing just that on an industrial scale.

bmugford said:

It depends what your business model is.

If you have quality domains, there will always be end user demand, so the "domainer" world is almost irrelevant.

Brad

Click to expand...

I largely agree, but consider what happens when good domains are unregistered.

If thecloud.com mycloud.com realcloud.com and cloud1.com are all unregistered, does that have an effect on the value of cloud.com? If you owned cloud.com then would you buy those up to profit or even just protect cloud.com?

---------- Post added at 10:46 AM ---------- Previous post was at 10:43 AM ----------

alien51 said:

A huge part of Domaining, is based on Speculation.

Click to expand...

Yes, speculation also in the sense of trying to guess what words or areas will be big in domains in the future. Words have magic power and can be powerful. I am surprised at some of the unattractive speculative registrations that might have SEO value on a bad day but just create awful sounding addresses.

sdsinc said:

Most domainers don't have a business model because they approach it like a hobby.

Click to expand...

Well, not really a hobby, but i think they speculate too much. The belief that "this must be worth something to somebody-- now to find THAT somebody. Where the hell is he? Guess i'll just spam the entire internet to find where he is."

sdsinc said:

So, if you have good inventory you will be making sales on a regular basis. The money will also pay for renewals and maintain unsold domains. Because the margins are high on domain names, that's what I like in this business.

Click to expand...

Which means, you need to cough up some moolah and buy expensive quality domains (most likely from other domainers). You buy a domain worth 300 bucks, resell it for 600 bucks. That's a great margin. Buy one-word domain for 1 million dollars, resell it for 2 million. That's a million dollar profit. That's how SEX.COM got passed from one domainer to another, without really benefitting any pervs out there.

But what are the chances that you pick up a domain at reg fee from the drop pool and resell it (no development done) at astronomical margins? True, there may be hundreds who sell reg fee domains at profit. But on the other side of the coin, millions of others are just plain losers who are unable to sell their stuff.

alien51 said:

Well, not really a hobby, but i think they speculate too much. The belief that "this must be worth something to somebody-- now to find THAT somebody. Where the hell is he? Guess i'll just spam the entire internet to find where he is."

Click to expand...

+1
too many people think they can get rich overnight... mind you, there are loads of how-to-become-a-millionaire-flipping-domains ebooks/methods all around promising the world. IMO most newbie domainers fail to realise how fast this industry is changing

elias75 said:

+1
mind you, there are loads of how-to-become-a-millionaire-flipping-domains ebooks/methods all around promising the world.

Click to expand...

Because they make more money flipping these e-books, than actually flipping domains.

Wow! Great thread guys! Lot's of great info!

I sold my first domain last year, a hand regd real estate. Com. Sold to end user within 2 days for $50! I was ecstatic! Then my mind started running, "wow, if I do that 19 more times this week, I'm golden"! Well it didn't work that way. Its quite a slow process that doesn't make sense if you are looking at it as $ per hour figure. Its more fun when its a hobby...

Good luck man!

Keith said:

For the majority it's a matter of how much the yearly loss is.

Click to expand...

May I ask what your basing this on? I can see where newbies take a loss, not knowing what domains to register and buying up a load of crappy domains, or choosing a TLD they predict will be the next dot com, I can see that.. But for the average domainer who knows what names to register and how to monetize on them, it's not that difficult to cover your renewal fees, hosting fees and development costs.. I've been in this biz for well over 10 years now and can honestly say I have never once taken a yearly loss.

RaiderGirl said:

May I ask what your basing this on? I can see where newbies take a loss, not knowing what domains to register and buying up a load of crappy domains, or choosing a TLD they predict will be the next dot com, I can see that.. But for the average domainer who knows what names to register and how to monetize on them, it's not that difficult to cover your renewal fees, hosting fees and development costs.. I've been in this biz for well over 10 years now and can honestly say I have never once taken a yearly loss.

Click to expand...

I base my opinion on the thousands of worthless domains that drop every day. Some of which have been renewed year after year.

The fact that you have never taken a loss puts you in the minority. I've been at it for 7 years and this year was my first profitable year. I actually made up for all my losses in one year! Lucky me

It seems like many folks register domains based on a dream. They fail to realize that it takes years to understand the complexity of this business. It's much more than simply registering a domain name :imho:

In the last Five years of my domaining, i have lost over $5000. This is because, i registered ordinary names and kept on renewing them. For some good names, i paid more than reseller prices.
During LLLL.com buyout and post buyout, i paid $40-$80 per domain to aquire in the aftermarket. Paid again renewals for 4-5 years. Now its becoming hard to sell at $25 per name.
At one time i was paying renewals for over 500 domains, now my portfolio is at 120. I am planning to bring it down to 50-60 in the next 5 to 6 months time.