IT.COM

opinion Why I Develop Every Domain Name Investment

Spaceship Spaceship
why-i-develop-domains-eric-lyon.png
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.
 
90
•••
The views expressed on this page by users and staff are their own, not those of NamePros.
My little journey so far has thrown up many people saying that the numbers from Google Keyword Planner is not reliable. How true is this please?

Who ever talks down on Keyword Planner as an unreliable tool — is not being realistic. It is one of the most valuable and free tools for keyword research, and is used by professional and seasoned domainers alike. The suggested search volumes on Keyword Planner are estimates, and can be higher or lower than the suggested number. However, Google has a solid algorithm that gauges the competition (demand) of keywords among advertisers, and that demand (low, medium or high) impacts the suggested bid.

The competition level and suggested bid per keyword are very reliable in determining the value of a searched term, and this should be where most of your focus should be; not necessarily volume.

Think of it this way: Who are the potential buyers of your domains? Searchers or Advertisers?

'Advertisers target Searchers', 'Domainers target Advertisers'. Now, you get the picture.

Good luck!
 
3
•••
Who ever talks down on Keyword Planner as an unreliable tool — is not being realistic. It is one of the most valuable and free tools for keyword research, and is used by professional and seasoned domainers alike. The suggested search volumes on Keyword Planner are estimates, and can be higher or lower than the suggested number. However, Google has a solid algorithm that gauges the competition (demand) of keywords among advertisers, and that demand (low, medium or high) impacts the suggested bid.

The competition level and suggested bid per keyword are very reliable in determining the value of a searched term, and this should be where most of your focus should be; not necessarily volume.

Think of it this way: Who are the potential buyers of your domains? Searchers or Advertisers?

'Advertisers target Searchers', 'Domainers target Advertisers'. Now, you get the picture.

Good luck!
Thanks so much for this. Your last few sentences make great sense. What if I may ask is your view on Estibot's stats?
 
0
•••
Thanks so much for this. Your last few sentences make great sense. What if I may ask is your view on Estibot's stats?

You're welcome.

Regarding Estibot. I really don't use Estibot or other "robots" for domain valuation. Like many have said, such tools are really not effective for valuation; it can only give you a sense of feeling on how much a domain could be worth. True valuation of any asset should be determined by humans, not robots.

The only Estibot stats that is relevant (to me), is the search statistics: broad match, exact match, and CPC, etc.

But, if by any chance — the estibot valuation of a domain for sale — (is favorably high - not low, and) might be convincing to potential buyers; then I may use it to influence a sale. That's about it.
 
1
•••
You're welcome.

Regarding Estibot. I really don't use Estibot or other "robots" for domain valuation. Like many have said, such tools are really not effective for valuation; it can only give you a sense of feeling on how much a domain could be worth. True valuation of any asset should be determined by humans, not robots.

The only Estibot stats that is relevant (to me), is the search statistics: broad match, exact match, and CPC, etc.

But, if by any chance — the estibot valuation of a domain for sale — (is favorably high - not low, and) might be convincing to potential buyers; then I may use it to influence a sale. That's about it.
You're welcome.

Regarding Estibot. I really don't use Estibot or other "robots" for domain valuation. Like many have said, such tools are really not effective for valuation; it can only give you a sense of feeling on how much a domain could be worth. True valuation of any asset should be determined by humans, not robots.

The only Estibot stats that is relevant (to me), is the search statistics: broad match, exact match, and CPC, etc.

But, if by any chance — the estibot valuation of a domain for sale — (is favorably high - not low, and) might be convincing to potential buyers; then I may use it to influence a sale. That's about it.
Great insight. I appreciate.
 
0
•••
very informative post. I like the idea of development and believe that it is more effective than parking.

But it is somehow impossible when you hold a lot of domain names (like me, lol).
 
1
•••
Domains and developed sites have a lot whole different buyer audiences.

Who buy developed sites? People who want to get a ready business, ideally with already existing traffic and revenue. Also site investors, who purchase a site, make it better and more profitable, and then sell further with a profit.

Who buy domains?
1. People who want to build their own site/business on a domain ("end users");
2. Brokers - who want to sell a domain to buyers from p.1;
3. Speculators or investors - who hope to see a market price for a domain higher in future.

Very rarely these sets intersect. Only if someone is experienced site developer, he can buy a domain to develop it just like buy a ready site to develop it further.

So in most cases, the prices on developed sites are much higher. Because they are standing higher in the "added value" hierarchy. And in this sense, you are totally right that it's better to develop the domains. But your advise to spend a half an hour for a site can only harm newbies, because they will just drain their time and money.

I can see only two cases when domains are more expensive as is than as developed sites:
1. Speculative/investment domains (any site wouldn't get any added value using such domain over any other domain);
2. Really premium name that will be used for a really serious business. If such business acquires a developed site because of the domain, they will throw an existing site and build their own site anyway, so in this case the existing site doesn't add any value to the domain for them.

Bottom line: Developing sites is of course very good, and in most case you can sell it for more money than just a domain; but for that, one needs to really invest in the development - time, content, SEO etc. And - these two are really different kinds of business, and have two different buyer audiences and different sale channels.
 
5
•••
I developed every domain and it is more trouble than it is worth.. Develop enough domains and hackers will never leave you alone.
 
2
•••
Thank you @golan for very interesting comparison. Being a developer, I love to develop websites and maintain them. But you are right, it needs full commitment if you are planing to sell it for good price. Also it is not possible to develop all domains to websites at once and maintain them until you are running a company of 10s of employees.

I developed every domain and it is more trouble than it is worth.. Develop enough domains and hackers will never leave you alone.
Don't worry mate, hackers are not that powerful if you are able to maintain strict security and proper website backups.

Rule of thumb is NEVER compromise on your website security and NEVER go for something cheap just to save few bucks a month. If you want to earn good from website, first invest in best and show your resolve to bring it at top. :)
 
2
•••
Don't worry mate, hackers are not that powerful if you are able to maintain strict security and proper website backups.

Rule of thumb is NEVER compromise on your website security and NEVER go for something cheap just to save few bucks a month. If you want to earn good from website, first invest in best and show your resolve to bring it at top. :)

I agree and know a few more hosting rules less in same ftp etc too. I just I tend to think less about developing unless i have a direct idea for a blog or something that can white label fast .I have hundreds of sites to fix at moment which i just have redirected out of laziness even dropped a few since now thinking going on domain value alone. Just on a bit of a downer so having a bit*h at present. I still agree to say that it is better to develop just having my lil tanty ranty whine.
 
1
•••
I agree and know a few more hosting rules less in same ftp etc too. I just I tend to think less about developing unless i have a direct idea for a blog or something that can white label fast .I have hundreds of sites to fix at moment which i just have redirected out of laziness even dropped a few since now thinking going on domain value alone. Just on a bit of a downer so having a bit*h at present. I still agree to say that it is better to develop just having my lil tanty ranty whine.

One more thing I experienced, it is difficult to focus on both: web development and domaining at the same time. A time comes when you have to choose either line. Many new comers like me think domaining is just fun and easy way of earning money. But it is not the case. It also needs full time commitment. I am learning something new daily and following it.
 
3
•••
I am one of those that has done both and I agree with both sides of the debate on certain points. It is very time consuming to create and maintain numerous sites. I have tried all of the quick development tools from Wordpress to Xsite to automated Amazon stores and only time spent on fresh and unique content really pays off - and that takes a huge commitment.

If, like me, domaining is more of a hobby then leaving most undeveloped is the right move. If you are doing this full time, then I think you should definitely devote some time to developing your portfolio.

I kind of split the difference. I develop one here and there to stay current on the latest tools. I also try to focus on buying domains that I feel I would enjoy developing at some point. If I were to suddenly find myself out of work or when I finally retire from my regular work, my plan is to move almost exclusively into development.

Viewing domaining from the development side really helps improve your buying skills and understand the end user market better. If you can't figure out a profitable development strategy and identify revenue sources for your names, how would you expect an end user to?
 
3
•••
Thank you @golan for very interesting comparison. Being a developer, I love to develop websites and maintain them. But you are right, it needs full commitment if you are planing to sell it for good price. Also it is not possible to develop all domains to websites at once and maintain them until you are running a company of 10s of employees.


Don't worry mate, hackers are not that powerful if you are able to maintain strict security and proper website backups.

Rule of thumb is NEVER compromise on your website security and NEVER go for something cheap just to save few bucks a month. If you want to earn good from website, first invest in best and show your resolve to bring it at top. :)

From your experience, whats the best way to set up a drop shipping site on an exact match domain? This would be for income generation and not to flip (at least not until its established). I've already got an affiliate account with CJ and an FBA account with Amazon - if those help. Not sure. Any advice?
 
1
•••
One of the best arguments about the potential of thinking about names as ideas and opportunities. And transforming these dormant properties into long-term sustainable assets.

And domainers are in a unique position to do so.

Not all will be 'developable'. Most will always be like trading commodities.

But once in a while you will come across and own a gem.

The trick is to spot them and realize their potential. And have the entrepreneurial acuity, acumen & perseverance to nurture them into a profitable venture.
 
5
•••
1
•••
For long term best domains in the portfolio development is surely the key to generate passive revenue until sold.
 
3
•••
One of the best arguments about the potential of thinking about names as ideas and opportunities. And transforming these dormant properties into long-term sustainable assets.

And domainers are in a unique position to do so.

The trick is to spot them and realize their potential. And have the entrepreneurial acuity, acumen & perseverance to nurture them into a profitable venture.

Well said @WilsonM

Maybe a (private/closed) thread need to be started on NP, with domainers mentioning only one of their most potential domains, to be voted upon by participating members and to explore the possibilities of profitability and development – as a joint venture.

The most potential domains would then be developed, accordingly. Building each domain into profitable ventures should probably have no upfront costs, if everyone involved, commits expertises, time and resources needed to maximize the potentials of each asset.

Domainers are Entrepreneurs by nature; why aren't we discussing and exploring this possibilities on NP? Mike Mann turned phone.com into a profitable asset. Phone.us can equally be developed, offering VoIP/telecom equipments and services to businesses of all size in the U.S.
 
4
•••
Well said @WilsonM

Maybe a (private/closed) thread need to be started on NP, with domainers mentioning only one of their most potential domains, to be voted upon by participating members and to explore the possibilities of profitability and development – as a joint venture.

The most potential domains would then be developed, accordingly. Building each domain into profitable ventures should probably have no upfront costs, if everyone involved, commits expertises, time and resources needed to maximize the potentials of each asset.

Domainers are Entrepreneurs by nature; why aren't we discussing and exploring this possibilities on NP? Mike Mann turned phone.com into a profitable asset. Phone.us can equally be developed, offering VoIP/telecom equipments and services to businesses of all size in the U.S.
We do have a joint venture and partnership forum in the marketplace "here" if you would like to start a thread promoting a joint venture for some domains you own and feel have potential to develop.

Good luck! ;)
 
6
•••
I'm really glad I read this! The quick flip is tempting but I'm going to start developing more of my domains!
 
2
•••
Nice post Eric. Every domainer should develop at least one of their domain names.
 
3
•••
1
•••
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.
 
1
•••
The idea of developing a name is new for me. Thank you for this.
 
2
•••
The idea of developing a name is new for me. Thank you for this.
Your welcome. I wrote this in 2015, but I still apply the same philosophy. It also helps double as an investor's reality check by approaching each domain asset as a hobbyist or end-user for better perspective into brandability, speculative niche market value, revenue potential, ROI potential after development, demographic demand, etc.. or lack there of.
 
3
•••
1
•••
Great post Eric, as usual very detailed but I would like to know one example of any domain you own which end user don't want to buy when they see it as a domain not website but after you have developed it, it has given you good returns.

Please give numbers like domain cost, development cost before sale and how much profit finally after sale. Just to get idea how developing domain really increase the value and it's worth of the effort we pay on development.

Thanks,
Sumeeth
 
1
•••
Back