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opinion Why I Develop Every Domain Name Investment

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About 10 years ago I discovered the secret to domain success. Though, not much of a secret, domain development is a wonderful way to improve upon your investment, yet it is highly underutilized. Once I figured that out, I began developing everything I could get my hands. It’s one of those things that I’m so passionate about, I tend to recommend development to everyone I talk to, even if it wasn't even remotely close to the topic they initiated. It's funny sometimes, the expression on people’s faces when a conversation they started with me makes a 180 degree turn from, "Where can I find an end user for my domain?" to "You should develop it, and here's why!"

Here’s some great reasons why I prefer to develop every domain that I invest in.

Parking vs. Developing

I can certainly understand the draw for many to create a large portfolio of parked domains. Who wouldn’t? It requires little more than your checkbook to amass a stockpile of potential, little energy expended, residual income, and it typically makes back your investment, but why sit on a pile of domains for pennies when you could be making 10x the return on each developed domain? It almost seems fiscally irresponsible once you know what you’re missing out on. I hear it over and over again that people park because they don't know how to code, design, or just don't have the time or money to pay someone else to do it. I get it. I realize that those can be legitimate obstacles for some people. Personally, I think it's a cop-out and a negative mindset. They just have to put their mind to it.

There's always a way to schedule at least 30 minutes a day or budget $10 to $50 a month to put towards developing a domain. I think that sometimes an investor just has so many domains in their portfolio that it's overwhelming to even consider developing them all. I get that too. I understand the feeling of that kind of pressure. Like with anything in life though, one step at a time to get the ball rolling and eventually, in a week, month, year, or decade from now an entire portfolio can be developed. Progress is still progress, no matter how long it takes you.

The main reasons why I stopped parking are:
  • I made more per click (PPC) when I developed vs. a percentage of a click with a parking company.
  • I had more freedom and control over my content and design when developing.
  • I boosted the value of my investment as it grew in traffic, revenue, etc.
  • I was able to save money each year once my domains were able to pay their own renewal fees.
  • I generated profit from my portfolio until the domains and/or websites sold.
  • There was no pressure to sell, and I could hold out for the best offer since there were no more yearly costs per domain.
  • I was able to be found in search engines when I developed, giving me better reach and potential for visitors.
  • I had more control over what type of ads displayed on my pages to avoid any unforeseen UDRP’s.
Quick Flipping vs. Developing

There’s nothing wrong with quick cash. Especially when I started out, I always liked a quick flip where I could turn a $1 coupon .com investment into $10 to $200 within 24 to 48 hours. Frankly, I find that quick flipping is a good way to get your feet wet until one learns more about the industry and how to assess value. Every quick sale you make puts you one step closer to the actual value with cold hard cash that a buyer places at your feet so that next time, you can start putting fixed prices on similar domains.

The quick flip approach can be a particularly satisfying one, especially if you're a fast cash kind of person. However, 9 out of every 10 times, a quick flip leaves lots of money on the table that you could have put in your pocket. Let's not forget how much time it takes out of each day to keep moving each of your domains in a marketplace. We’re talking about a lot of hours per day. Most investors start to realize that while such a business model might be sustainable, they'll burn themselves out and be investing more time than the money they make. How much is your time worth?

In the end, while certainly more time consuming, developing a domain helps you make more productive use of your time. It also allows you to save time in the long run by never having to list the domain for sale. Not to mention, the revenue it generates every year to pay its own renewals and bring profits while it waits for a buyer to inquire about it. Domains will Increase in value each year as more viewers find and refer them to others.

Think about the long term and possibly diversify a little at first. Start out with a few quick flip investments coupled with a few long-term investments, just be careful while developing that you don't infringe on any trademarks.

Long Hold vs. Developing

Just like with quick flipping, it's beneficial to develop and have your investments paying their own renewal fees and bringing in profit each year. It's great if you can afford to renew undeveloped investments every year and not bat an eyelash. However, you'll have more peace of mind if they pay for themselves.

Many investors I've talked to rebut the thought of developing because they feel like their premium one word .com’s value has already hit seven figures, so why bother? But I say, you already own the domain, so why not take a dive into the deep end of the pool and see if it can swim with the big boys? Developing on a parked investment that already has a phenomenal potential will only better your chances at furthering that value and getting more buyers’ attention.

Don’t let this long hold mentality get in your way. If you’re lucky enough to score a premium domain for your portfolio, developing it could make all the difference. Chances are that if you have such a premium domain that everyone already wants and people talk about, developing it even into a five page mini-site could crank out cash like an ATM machine every month.

In Conclusion

There's literally no good reason why an investor shouldn't want to expand on their investments, so that they can profit passively while they wait for the right buyer. They could even have it generate leads for another investment project of theirs. Sometimes one has to sweat a little and dig their heels in before they can find the true potential in an investment. Don’t forget the age old line, “it takes money to make money,” and what better way is there?

Now that you know, there’s no more excuses. It’s time to stop procrastinating and start being productive with your investments. Before you know it, you’ll be telling all your friends to develop, like you’ve been doing it all along. I know I did.
 
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The views expressed on this page by users and staff are their own, not those of NamePros.
Nice post Eric, I think some people don't develop because they think a prospective buyer will see it developed and think it is not for sale. Or that it is an existing business and the asking price will be higher to account for the buying of the business.
 
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Great post Eric.. Inspired!

I agree with @equity78.
 
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I actually agree that more people should develop, I do with some of mine, it's where I started.

Your situation is different than most tho. In the video, you said you're down to 15 domains now, all developed. It's a whole lot different if you have hundreds/thousands. I don't know if I would even call you a domainer with 15 developed domains. And to put up quality, something that actually has a chance to rank, you can't do that when you have a bunch of domains. Maybe a glorified parking page or if it's something niche without much competition, you have a chance.

Might be something for another topic. Curious if there is some amount people have in their head where they would consider themselves a domainer. One of the first blogs I read on domaining, every domain they bought, they made into an affiliate site. They were more an affiliate marketer than domainer to me.
 
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Cool graphic too B-)
 
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Feel like talking about how you develop them?
 
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Great post, Eric, and coincidentally posted around the same time I came to the conclusion that I need to develop out my entire portfolio.

I noticed something the past couple of years in domaining, there has not been a domain name that I haven't just only began to develop and then it eventually sold in one way or another, via an inquiry, outbound marketing, or a sudden gain of interest in the marketplaces/forums I had it advertised on that wasn't there prior to the site. When there is actually something on the domain to look at rather than a plain, cold, generic park page, it creates a visualization of a fraction of what the potential could be and sparks ideas and increases value. There is much truth behind this post.

It's like selling an autographed baseball card yet opting to put it in a thick glass frame with gold trimming, it will always sell for more than if it was in a generic plastic case. Website = the fancy frame for anyones domain.
 
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Here's a question: I understand if you have keyword domains to develop (you create a site geared towards the given keyword), but what if you own brandables? Lots of 5L and 6L .coms that have no keywords at all. What would you develop those into? Just create a custom landing page with an offer form?
 
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Feel like talking about how you develop them?
I'm mobile at the moment and have some appointments to get to. I'd be more than happy to explain a bit more later or in the morning. I'll have more time for sure around 5am to compose a more in depth reply. ;)
 
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Here's a question: I understand if you have keyword domains to develop (you create a site geared towards the given keyword), but what if you own brandables? Lots of 5L and 6L .coms that have no keywords at all. What would you develop those into? Just create a custom landing page with an offer form?
ill address this as well when I have more time ;)
 
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Powerful insight.. What are some worthy methods of monetization that have the potential to crank out cash like you mentioned? Adsense, paid private ads, products? Im curious to know what has worked for you with a site that you may not have time to heavily market and promote.
 
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from my experience it has become challenging maintaining a large volume of sites. Keeping up with site updates and fending off hackers unfortunately has lead me to concentrate on a few number of sites that are worth the time.
 
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A good article, thank you. I agree with many of the comments, and many of the problems once you have hundreds of domains. I'm not sure how to build a quality site that will stay fresh with new content, as well as the general maintenance? I would loove to develop more of mine, and could easily build them, but I'm afraid they would age and slip down the chart, thus devaluing them in the eyes of some buyers. Can't wait to hear more.
 
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Great post, Eric. Thanks.

My thoughts? You run a little risk with end users checking out the domain, realizing there's an existing site, and moving on... a potentially missed sale. On the other hand, an end user who REALLY wants the domain will figure out how to reach out to you and will likely offer a lot more money than he/she might on an undeveloped name... developed domains simply have more real (and perceived) value.

As side note, I have the same question as Snivo... what is your recommendation for high quality brandables? 5 and 6 letter dot coms that could work for any niche? For example, how would you have developed Zillow.com had you owned it?

Also, any recommendations for building out a site on a White Label platform? Something that automatically updates with content? I know autoblogging is long-deceased... but there are some decent options out there if one wants to power a site with, say, a white label dating company or a white label job board. Any thoughts on that?

Much appreciated!
 
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I wish I had the knowledge to develop. I've been learning people for 10+ years solely. Developing might be the difference of this being a hobby and a career
 
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I develop every name as soon as possible. I used to use domainapps and I had a site up in 15 minutes. Now I use wordpress and it takes me a bit more time, but I am ranking good in certain keywords and traffic is increasing. As for people wondering if its for sale when developed, there is no doubt on my sites.
Great article Eric
 
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When one has hundreds or thousands of domains, they either drop the standards of what constitutes 'development' or simply don't bother with it. The healthiest approach is to select domains that generate consistent parking revenue and park them, identify the ones with short term potential and flip them, set aside the most valuable ones and tag them for sale long term, and lastly, pick a handful for developing a business on. The latter kind also enjoy a lower tax bracket when sold as a business, as opposed to as domains only.
 
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Great post Eric, How do you attract buyers for developed names? How do they get to know if the site is for sale?
 
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Developing websites and domain name investing are two complete different beasts imo and I don't see how they relate to each-other whatsoever. Perhaps i'm from a different generation of investors that never cared about parking revenue as one or two sales already cover renewal fees on a 500+ domain name portfolio in my case. I buy domains in the aftermarket for their potential to sell to end-users. Most of them are looking to buy a great domain name and a developed site on the name might actually decrease your chances of closing a sale.

Don't get me wrong, I encourage anyone that has the time, knowledge and excitement to develop a domain or two into a site and build that into a revenue stream (I have quite a few myself) but this doesn't has anything to do with domain name investing imo and I personally wouldn't recommend someone to build something on their best domain names unless they are willing to take these names of the market as being for sale.
 
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Great domains do cost a lof of $ to develop, market and make work BUT there are some really cool ideas one can do, like online franchising for example if they have the right domain for this model. Our url Sushi.com for example we have developed as a online portal for ordering sushi for delivery, takeout, eat in dining by walk in, paying on your phone or reservations, all bases covered and we process the transaction for the restaurant and take a commission on it, we're still in beta but roll out soon. A niche grub hub but for sushi, globally is the biz plan. We are now franchising for city rights by selling the rights to cities globally, this way you have managers in each city who buy in and they can never be cut out because they are going to get a cut of each order or reservation processed on Sushi.com for their city, all that goes through Sushi.com for that city they bought in to so they can advertise the heck out of Sushi.com for their city since they have the rights to it and never worry about being cut out, and we take a royalty on it as well, online franchising I think is going to grow and be something huge, I think they also do it at Hotels.tv, PropertyGuys.com and some others I am aware of.. we would like to do this eventually with our Salons.com domain but right now we would consider selling it so that we can fund Sushi.com....
 
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