information Expert Exchange: If You Began with $1,000 to Spend on Domains, What Would You Buy? What If $25,000?

With $1,000, I'd be going after product or keyword domains that dropped that I could quickly resell to companies in [their] industry, and try to build up funds that I could then use to go after higher value domains.

With $25,000, I'd use a similar strategy, but there would be many more domains that I could go after. Also, if I had a good sense of "investor" valuations, I would try to find premium domains in private hands that I could acquire for less than investor pricing and then flip to other domain investors. For a long-term strategy, I'd look for decent 'brandable' domains from drop auctions or other auctions that could be acquired for $500 or less and try to build up a portfolio for eventual end-user sales. This strategy would not bring in any steady income, so I wouldn't pursue this approach if I needed immediate income.

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I would probably buy underpriced 4 letter .COM domains. I think as far as liquid domains go, they have the highest upside relative to investment cost.

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With $1,000 I would buy two or three LLLL .COM domains with good letters and vowels. With $25,000 I would buy a few good one-word .COM’s or special two-word .COM’s.

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I'd look at what generic names are selling (sold) and try to buy registration-priced new gTLDs in select extensions (that make sense) and try to offer those for sale to other owners of other extensions. Here I would avoid trademark intent names and focus on developed generics.

I'd also start calling the owners of expiring names (before they expire) making cash offers of $500-2,000 for great .COM names that will likely sell for much more on NameJet post-expiry.

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When I first started out in the industry, I received great advice from Thierry François, a domain veteran, which I will pass along to you. If you only have $1,000 to invest, as the first step, you should decide a niche to focus on (e.g. one word .COM, four letters .COM, etc.). I would study the niche as much as possible and learn exactly how much these type of domains are trading for, who is buying and selling them, and where they are traded.

Once you are comfortable with the trading ranges, I would buy 1-3 domains that I know are priced below market value. As a next step, depending on the type of domain and on the time frame of my investment, I would hold on to it (especially if the domain is a one or two word .COM, or you have a long-term horizon and domaining is not your full time job) and hope for an end user to come along and sell it for a 100%+ net margin. Alternatively, if the domain I bought is liquid, I would try to flip it for a 20%+ net margin and proceed to repeat the process.

Here is instead what I would not do: spend $1,000 in new registrations hoping that someone will buy the domains. This is how I and many other investors lost money when we first started. If a domain has not been registered yet, there is a 99% chance that nobody wants it. Unless you know exactly what you are doing, you are basically playing the lottery hoping to get lucky.

If I had $25,000, then I would do the same process as above, but this time I would go for a 3-letter .COM, a good one-word .COM, or spread the risk with a portfolio of 4-letter .COM with vowels.

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With $1,000? A vacation. With $25k, I’d look at auctions on NameJet for super premium .COM domain names.

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With $1,000, I would buy a bunch of expired domains that were old (10+ years old) and that I thought had a good resale potential.

With $25,000, I would buy a few short .COM names. I would be patient and check the blogs and forums as well as some of the auctions to pick up 2-3 good category killer names. You can usually get a decent deal if you are patient. If the right domain name presented itself, then I would pay the whole $25,000 for the one really good name.

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With a budget of only $1,000, I might roll the dice and consider acquiring a few of my favorite gTLDs. With a higher budget, I would focus on .COM’s that have consistently proven to be a sound investment yielding great returns.

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If I had $1,000 to spend, I'd likely buy four domain names for $250 each. This would give me the opportunity to go beyond a hand-registered domain but still spread the risk to a handful of domain names. While you're probably not going to sell any of these for many thousands of dollars, selling for $2,500 might be within reason. You'd just have to know that in the early days you might end up buying names you just can't sell, but you'll learn in the process.

If I had $25,000 to invest, then I would buy twenty-five $1,000 domain names. Like I said above, you're going to make some mistakes in the beginning – okay, you'll probably keep making mistakes for years to come – and that's just how it goes. With 25 domains, you can still make plenty of mistakes and end up with a few good domains that could sell for many thousands of dollars.

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