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Eric Lyon

Why I Develop Every Domain Name Investment

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By Eric Lyon, Apr 8, 2015
  1. Eric Lyon

    Eric Lyon Member Services, NamePros Super Moderator PRO Gold Account VIP Trusted Contest Holder

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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.
     
    The views expressed on this page by users and staff are their own, not those of NamePros.
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  4. Eric Lyon

    About The Author — Eric Lyon

    Eric Lyon is located in Houston, TX and has been a registered member of NamePros since Aug 17, 2009 with 355 followers and 19,434 posts. From those posts, 901 members have been thankful for them and 1,434 members have liked them.

    This is Eric Lyon's 16th blog post on NamePros. View all blog posts

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  5. Comments (94)

  6. equity78

    equity78 Top Member TLDInvestors.com TheDomains Staff PRO Gold Account VIP ★★★★★★★★★★

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    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.
     
  7. DKN

    DKN Active Member VIP

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    Great post Eric.. Inspired!

    I agree with @equity78.
     
  8. JB Lions

    JB Lions Lounge Gear Connoisseur VIP

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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.
     
    Last edited: Apr 8, 2015
  9. Loko

    Loko Established Member ★★★★★★★★★★

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  10. mhdoc

    mhdoc Top Member VIP ★★★★★★★★★★

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    Feel like talking about how you develop them?
     
  11. tomcarl

    tomcarl Active Member VIP

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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.
     
  12. Billy Wagner

    Billy Wagner BillyW.com VIP

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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?
     
  13. Eric Lyon

    Eric Lyon Member Services, NamePros Super Moderator PRO Gold Account VIP Trusted Contest Holder

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    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. ;)
     
  14. Eric Lyon

    Eric Lyon Member Services, NamePros Super Moderator PRO Gold Account VIP Trusted Contest Holder

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    ill address this as well when I have more time ;)
     
  15. nyyyia

    nyyyia New Member

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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.
     
  16. webdomain

    webdomain Established Member

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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.
     
  17. cocaseco

    cocaseco Active Member VIP

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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.
     
  18. Domain.BUZZ

    Domain.BUZZ Tim Culpepper

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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!
     
  19. wcpthree

    wcpthree Established Member

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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
     
  20. MasterOfMyDomains

    MasterOfMyDomains Top Member VIP ★★★★★★★★★★

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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
     
  21. Acroplex

    Acroplex Top Member DomainGang.com PRO VIP ★★★★★★★★★★

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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.
     
  22. pdevananth

    pdevananth Active Member VIP

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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?
     
  23. Doron Vermaat

    Doron Vermaat Email [email protected] for the fastest Efty support. Efty Staff PRO Gold Account VIP

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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.
     
  24. SuperbDomains.com

    SuperbDomains.com Established Member

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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....
     
  25. Eric Lyon

    Eric Lyon Member Services, NamePros Super Moderator PRO Gold Account VIP Trusted Contest Holder

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    After a little more thought, I think this question deserves it's own article. So I'm going to take some time this week to dedicate to writing one that outlines some of my top choices for monetizing over the years that yielded the best returns. Please be patient, I should have it ready to roll out by Tue. and I'll update you as soon as it goes live.

    Thanks,
     
  26. Eric Lyon

    Eric Lyon Member Services, NamePros Super Moderator PRO Gold Account VIP Trusted Contest Holder

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    Ok, I wanted to address all the above comments together since they all basically talk about the same negative aspect (excuses) of why one doesn't want to develop. I'm going to separate each obstacle below and provide my opinion on each.

    Large Portfolio / To Many Domains / 1k+ domains: I get it, It feels over-whelming. It just doesn't seem like there is enough time in the day or money in the bank to dedicate to developing each and every domain in your portfolio. First of all, There's no such thing as "to many domains to develop".

    Secondly and most importantly, it doesn't take a rocket scientist to learn basic html / css. that can be learned as quick as 2 weeks (Everyone's different). With basic html / css skills you can easily edit FREE opensource templates / CMS / Blog scripts. There's no financial investment in those, just time. You can schedule 30 minutes to an hour a day to get a mini-site done. 1 site per day x 30 days = 30 sites per week / 365 sites per year. And if you are feeling really motivated you could knock out multiple sites per day & triple the yearly developments.

    You don't need to develop them all immediately, stop stressing yourself out looking at how many domains you have and focus more on one at a time, feeling a little more accomplished after each completed development.

    Or, if you can afford it, pay someone to do it for you.

    I can't afford it / don't know how: See above answer

    Developing devalues my domains: Really? Providing a steady traffic source, revenue model, and foundation for an investor to build on / expand devalues a domain? Not sure about that logic, from my experience everything you do to a domain increases it's value. Besides those being factors already that many investors look at during their research before making a purchase, it just add's that much more incentive to an investor that now already has viewers when they launch the "re-development".

    Investors don't care about silly things like traffic, revenue, or foundation to build on. They just want a domain: See above answer

    Domain Investing for the purpose of flipping for profit and developing are 2 different things: depends how you look at it, or how much you want to limit your sales potential. Whether you quick flip, long hold, park, or develop, the end game is usually the same. Sell for the most profit, right? So, with that said, there's really no reason at all to avoid developing if it boosts your bottom line and increases your profit margin.

    Some domains are better than others, I don't want to waste my time on bad ones: Why did you invest in bad ones in the first place? Ok, never-mind, I still do that sometimes as well. it happens. We all invest in a few pieces of coal every once in a while. However, there is absolutely no reason at all why you can't compress that chunk of coal just right to make a diamond.

    There have been more times than I can count where I regged a domain I later regretted and couldn't flip it for free, let alone a profit. It was these times that I realized after developing a few, that I was able to make a profit on what I thought was going to be a loss. try not to forget that there are several different types of buyers. Many look for a domain that has multiple positives, however there are buyers that focus on just traffic, or just revenue, or just PR, or just where a site sits on googles search pages.

    Keeping the above in mind, if you can squeeze out at least one key buying factor from a trash domain, chances are you may break even or even make a good profit on it, rather than having to drop it and take a total loss.

    Investors won't buy a developed domain / An investor won't know it's for sale if it's developed: Please review some of my previous responses, as many fit as an answer to this as well. In addition, it wouldn't hurt to put a little text in the header that says something as simple as "This domain / website may be for sale. Please contact us at (Phone / email) for more information".

    Generally though, if an investor truly likes a domain, they will make an offer on it whether it's developed or not. Not only that, a developed domain helps you run off the tire kickers / low-ballers & retain only the serious investors.
     
  27. Eric Lyon

    Eric Lyon Member Services, NamePros Super Moderator PRO Gold Account VIP Trusted Contest Holder

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    Ok, Brandables...... Since there isn't a clear keyword / phrase to build on, one must get a bit more creative. Don't be afraid to develop in a direction that may not jive with what an investor wanted to develop. A serious investor (Not a tire kicker) will appreciate any existing traffic / viewers a domain has, rip a site down in a second & rebuild in a different direction without hesitation for the right brand name.

    Generally I normally say the brand name a few times in different tones / pitches playfully while thinking till an idea pops in my head and then I run with it. If you aren't very creative (Not everyone is), then tell the name to a friend or family member and see what they think fits it. If all else fails, you can always ask a child, they are normally very creative with huge imaginations at young ages. Even if they say "Silly putty" or "purple unicorns", or "Fuzzy teady bears", It gives you a building foundation. Again, it doesn't matter how you develop it, a serious investor that likes a brand name will rip it down & rebuild it in a heartbeat.\

    In the mean-time, till an investor comes along, you'll at least have a playful site that can pay for it's own renewals each year. And maybe something to get a smile / laughter out of people till then. Have fun with it.

    As for Zillow, it rhymes with pillow or willow. Sometimes you can playfully developed on a rhyme and make it work. Personally, I would use some illustrative efforts around a Willow tree that's been converted into a house. Each of the doors and windows is part of the navigation that leads to another playful page. Each page is illustrated to look like a room inside the willow tree house. You can go even deeper and have objects within each room clickable. Heck, make it a playful, interactive learning tool for children to teach them something about the objects in a home. (E.g. Don't touch a hot stove, Don't stick things in light sockets, don't run in the house, Wet floors are slippery, etc.)

    Just be creative and have fun. ;)
     
  28. chloe321

    chloe321 Established Member

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    Love this quote (and the entire article!). Very inspirational. Thank you!
     
  29. JB Lions

    JB Lions Lounge Gear Connoisseur VIP

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    Ok, lot of stuff I disagree with.

    How do you get it when you only have 15 domains? You can't compare that to somebody who has hundreds/thousands. It's like somebody who ran half a mile telling everybody to run a marathon and how it's not a big deal, even tho they've never ran one themselves

    This is a horrible message you're sending out. A minisite in 2015? 30 minutes? If this worked, how come you only have 15? Why aren't you cranking them out? Making more money? Doesn't this go against what you say in the video as well when you talked about development? You're pushing people to make crap sites, when you should be pushing quality sites. And you don't get quality done with a 30 minute minisite. I hope this isn't some lead up to some future product.

    Time is money. To waste 30 minutes on something that has no chance in ranking, tell me how that is time well spent? If it has no chance to rank because a. quality b. (new) people usually go after really competitive terms, then why isn't parking the better solution?

    How about you do a live example of this. Since it only takes 30 minutes. Get a new domain, film yourself and put it on YouTube. I want to see some 30 minute minisite rank for something even a little bit competitive.
     
    Last edited: Apr 9, 2015
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