discuss Increase In New Domain Investors... Good or Bad?

Silentptnr · Jun 12, 2017

I feel like over the past few years there has been a dramatic increase in the number of domain name investors. Not sure if it is good or bad for the market.

Maybe the increase has hurt retail prices? Let's hear your opinion whether you are a new Investors or even investing for a while.

Tia Wood · Jun 12, 2017

I don't think your question is a yes or no answer :P Can you change that to "good" or "bad" please?

Kuffy · Jun 12, 2017

What do you mean by an investor. Is it a person who acquires a name, and parks it for income and capital gain? or is it a dealer who picks up names and hopes to profit from end users?

Silentptnr · Jun 12, 2017

Kuffy said:
What do you mean by an investor. Is it a person who acquires a name, and parks it for income and capital gain? or is it a dealer who picks up names and hopes to profit from end users?

Both

hawkeye · Jun 12, 2017

In the long run - Bad.
Too many people are jumping in this, thinking this sounds like easy money and they're gonna get rich too. They then reg crappy names, over price them, and then spam endusers to death with their over priced junk, that just ends up leaving a bad taste where endusers feel domain sellers are scammers (another growing group of newbies) etc. Also, as they hear that they should buy aftermarket domains at auctions, they see a name with bids on it and jump on to bid too (just because), thus raising mediocre names to stupid prices. They then are stuck with names that won't sell for what they paid, drop them and domaining, and gripe about the whole process. Unfortunately there's nothing that can be done, as they'll keep coming, more and more, and the domaining waters will keep getting more and more muddier and sadly pricier. The only people really happy to see more people coming into domaining, are the registries and registrars. imo.

kemjika11 · Jun 12, 2017

I just want to know how this can be bad?

Asfas1000 · Jun 12, 2017

hawkeye said:
Also, as they hear that they should buy aftermarket domains at auctions, they see a name with bids on it and jump on to bid too (just because), thus raising mediocre names to stupid prices. They then are stuck with names that won't sell for what they paid, drop them and domaining, and gripe about the whole process.

Exactly.

shorterwinters · Jun 12, 2017

hmmmm.
I got the inside track and have for years. Competition has always been there but somewhat limited in a way.
Suddenly there is more competition and it is coming from all over the place. Where did all these people come from and where are they from?
Suddenly my gravy train is diluted. My customers are wondering about these other players who do things a little different. My potential customers now have many more options to choose from.
Suddenly everyone is talking about what I have done for years where not really many before gave it much notice.
Instead of selling 5 jobs a year for 10k I am selling 30 for 6k. Working a little harder, doing things a little different, and the game has changed a little but it looks like it's a good thing.

Hell, I don't know but that's what I came up with as an analogy to something I have done for years and years.

Internet.Domains · Jun 12, 2017

There is no business sector where declining revenue and declining investment is considered a 'good' thing...That holds true with domain investing as well. It's Business & Economics 101.

tldboss · Jun 12, 2017

I am new to the industry, have no idea what it was like a few years ago.

Maybe its time for the seniors to pass on the torch

shorterwinters · Jun 12, 2017

hawkeye said:
In the long run - Bad.
Too many people are jumping in this, thinking this sounds like easy money and they're gonna get rich too. They then reg crappy names, over price them, and then spam endusers to death with their over priced junk, that just ends up leaving a bad taste where endusers feel domain sellers are scammers (another growing group of newbies) etc. Also, as they hear that they should buy aftermarket domains at auctions, they see a name with bids on it and jump on to bid too (just because), thus raising mediocre names to stupid prices. They then are stuck with names that won't sell for what they paid, drop them and domaining, and gripe about the whole process. Unfortunately there's nothing that can be done, as they'll keep coming, more and more, and the domaining waters will keep getting more and more muddier and sadly pricier. The only people really happy to see more people coming into domaining, are the registries and registrars. imo.

I see what you are saying and it makes sense and I tend to agree with it as well especially the part of running up prices on crappy names and people thinking it is a scamming thing going on.
In the end tho won't good names and ideas sell and rule while the mediocre and crap will still be mediocre and crap and most everyone will still know what is good idea/name and a crappy idea/name?
Won't an enduser pay attention to something that is good and good for him and ignore and know what is crap and not good for him? I kind of think so but that doesn't mean anything,

Asfas1000 · Jun 12, 2017

Let's take it to the extreme : Suppose tomorrow 100,000 new domain investors enter the market, out of nowhere.

What will happen ? Domains that currently sell for $100 at auction will cost $300 and whatever sells for $500 will cost $1,500. Result : majority of investors will go from black into red, due to increased acquisition prices.

Will end user prices increase at all ? There is no reason to think so.

It's hard to sugarcoat such cold facts IMO....and with all due respect and sympathy for new and veteran investors alike.

shorterwinters · Jun 12, 2017

Internet.Domains said:
There is no business sector where declining revenue and declining investment is considered a 'good' thing...That holds true with domain investing as well. It's Business & Economics 101.

Of course but where do the reports for "declining revenue" in this "sector" come from and how are they tallied?
How would "declining investment" be tallied? If more are entering or participating wouldn't the investment numbers increase? If that is the case and revenue is declining then there is a problem but how is all of this tallied and segmented and sorted and where would one find such numbers? I can't imagine they can be put together in such a way as not to slant one side of the argument or the other as it seems it would be extremely subjective but I wouldn't have a clue.
(there's that new kid again, jumping in and blabbing about stuff he knows nothing about)

DomainVP · Jun 12, 2017

Most people quit after a few months when they realize it's not the 'get rich quick' they thought it was.

The few that remain are the only added 'competition'.

Think of it this way... when you go for a great domain name at auction how many people are really competing with you? I still pick up some fantastic domains for low $$$ and only been at the table with 2-3 other bidders.

If you follow Ricks tweets he is having a similar experience at auction, so I assume thats the same across the board.

Most premium (3L / Single Word) domains only have 200-300 people at the table (at best), watching and participating (NameJet).

So think about that...

7 Billion people on this rock, and only a few hundred actively buying domains on a daily basis.

The industry is good and is still very lucrative.

Tia Wood · Jun 12, 2017

I feel it's a good thing:

More competition but more people to flip quickly to.
More companies wanting to provide more services specifically to domain investors.
More people to bounce ideas around.
More people to find out what works and what doesn't.
More conversations at NamePros.

Smiles76 · Jun 12, 2017

Domain investing is not a ponzi scheme. But, it's operating on similar principles these days. End user sales account for a very small percentage of domain sales. The vast majority of sales are between domainers who are artificially driving up the price of domains. New investors are needed otherwise prices would fall dramatically as most end users will never pay the prices that most domainers are asking.

EmotiveDomains · Jun 12, 2017

More piranhas in the tank.

kemjika11 · Jun 12, 2017

Asfas1000 said:
Let's take it to the extreme : Suppose tomorrow 100,000 new domain investors enter the market, out of nowhere.

What will happen ? Domains that currently sell for $100 at auction will cost $300 and whatever sells for $500 will cost $1,500. Result : majority of investors will go from black into red, due to increased acquisition prices.

Will end user prices increase at all ? There is no reason to think so.

It's hard to sugarcoat such cold facts IMO....and with all due respect and sympathy for new and veteran investors alike.

You're taking the buyer's side in this situation. Why dont you assume you're the seller at those higher prices?

BrandSac · Jun 12, 2017

from my point of view there is two side of the story:
more investeur, more fund in the indestry, more profit.
more investeur, more competition in the auction, lease profit.
if you have huge portpholio this is good for you,
but if you are small investor you will have tough time,
so you must adapat your techniques or go home

Asfas1000 · Jun 12, 2017

kemjika11 said:
You're taking the buyer's side in this situation. Why dont you assume you're the seller at those higher prices?

Because you still don't have a viable business model in this scenario.

You are selling to other investors from your existing inventory, but how do you stock up ?

Internet.Domains · Jun 12, 2017

@shorterwinters - I was simply making a general statement that can be applied to domain investing....More investors mean increased revenue which increases sale prices. The focus should be on the selling side and not the buy side.....Same principles as real estate. Would you rather trade real estate in Beverly Hills or Mojave desert mobile homes?

boker · Jun 12, 2017

hawkeye said:
In the long run - Bad.
Too many people are jumping in this, thinking this sounds like easy money and they're gonna get rich too. They then reg crappy names, over price them, and then spam endusers to death with their over priced junk, that just ends up leaving a bad taste where endusers feel domain sellers are scammers (another growing group of newbies) etc. Also, as they hear that they should buy aftermarket domains at auctions, they see a name with bids on it and jump on to bid too (just because), thus raising mediocre names to stupid prices. They then are stuck with names that won't sell for what they paid, drop them and domaining, and gripe about the whole process. Unfortunately there's nothing that can be done, as they'll keep coming, more and more, and the domaining waters will keep getting more and more muddier and sadly pricier. The only people really happy to see more people coming into domaining, are the registries and registrars. imo.

In the same time it can be good as well... if they over price them, it will be good for the rest of us, because the other names will look like a jewel. Also, for the others who are buying more handregs or droops, it should be better, because will force everybody to extra pay for aftermarket domains and having less money to invest anything else.

hookbox · Jun 12, 2017

It flat out sucks! More domainers throughout the world with lower income aspirations which leads to lower margins which leads to lower sales. It used to be a few people watching names that had enormous profit potential to now being a thousand people watching the same names and paying higher prices but only expecting a very small return which destroys the overall market.

More options at lower pricing is killing the end user market. I don't want to trade names for XX profit to other domainers either. I would rather find something else to do with my time. The flip side is with so many more domainers maybe the next phase of profitability is not end users but other domainers at lower margins but higher volume.

shorterwinters · Jun 12, 2017

Internet.Domains said:
I wouldn't expect someone who quotes me, asks questions and then proceeds to insult me to understand the simplest dialogue.

Please point out my insult to you? I did no such thing and intended no such thing. If I did so please tell me where I did.

shorterwinters said:
(there's that new kid again, jumping in and blabbing about stuff he knows nothing about)

If you are referring to that line then I did not convey it good and I need to remember this is a forum with people the world over participating in. That was an attempt at humor by me.....someone talking about me or me talking in the third person. It was NOT a reference to you, it was a reference to no one other than myself.

I understand the dialogue but without reports showing declining revenue and declining investment and the criteria in which those calculations were construed from that statement can only be taken as a personal experience.

Internet.Domains · Jun 12, 2017

shorterwinters said:
Please point out my insult to you? I did no such thing and intended no such thing. If I did so please tell me where I did.

If you are referring to that line then I did not convey it good and I need to remember this is a forum with people the world over participating in. That was an attempt at humor by me.....someone talking about me or me talking in the third person. It was NOT a reference to you, it was a reference to no one other than myself.

I understand the dialogue but without reports showing declining revenue and declining investment and the criteria in which those calculations were construed from that statement can only be taken as a personal experience.

Originally I read it wrong as I thought the last statement was directed at me..My bad....

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