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advice Lessons from Elite Domain Investors

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Ace3coiner

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Like any other industry, lessons and advice from pioneers of the domain industry is invaluable and priceless. They steer the beginner in the right direction and remind the experienced vital points already forgotten along the way. I stumbled upon a blog document from DI authored by Elliot where he talks about the advice he's received from "the Most Successful Domain Owners of All Time". To open this thread, I'll start with the first of those advice and would like fellow domainers here to share their experience/lessons learned, along the way, in domaining.

Lesson 1 : from Frank Schilling, Name Administration
"I clearly remember walking to the grocery store in the rain, years ago with my wife, doing some fingertip-math, coming to the realization that if I kept repeating what I was doing, I would soon be making $75,000 a month selling traffic...
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The views expressed on this page by users and staff are their own, not those of NamePros.
As a captions for the above:

"...before you earn you've got to learn."
and
"The more you learn, the more you earn."

- Tai
 
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Lesson 2: Merlin Kauffman, True Magic, LLC

"Take a bigger risk instead of a lot of small ones. By this, I mean that instead of buying ten domains worth $100 each, buy 2 domains worth $500 each, or 1 domain worth $1,000. Bigger risks usually have bigger rewards."
 
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Lesson 2: Merlin Kauffman, True Magic, LLC

"Take a bigger risk instead of a lot of small ones. By this, I mean that instead of buying ten domains worth $100 each, buy 2 domains worth $500 each, or 1 domain worth $1,000. Bigger risks usually have bigger rewards."

In domaining, not necessarily, unless we are talking about ultra premium/one word domain names. I doubt if a domain purchased for $1,000 can be sold (for sure) for double or even more. It should not be about the price I paid for the domain in the aftermarket, it should be about knowing what sells or can be sold for more than the I paid.

Hope it makes sense.
 
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Lesson 3, Monte Cahn, Moniker:

"My advice would be to look for a diversified approach. By this I mean, to look for names that have good meaning that are brandible as well as names that generate a revenue stream. Look also to use the domains in different ways, some for parking, some for micro sites, some for affiliate networking and lead generation. As everyone knows, some domains generate more money just parked…just like billboards sit usually on undesirable pieces of real estate but make more money showing ads. Some are better for full fledge deep content websites, however that requires commitment and work to maintain, and to improve. Working with affiliates offers some additional options as you can steer traffic to CPA or lead generation sites that pay based on conversion, sign ups, or even CPC. Always look to sell domains for decent multiples. Most domainers look at a domain sale where you make 20% – 100% profit as not worth their time. If you buy a domain for $59 and sell it for $120, you just doubled your money…I do not see that happening in any industry right now. So take money off the table and diversify that money into other types of investments….do not hold everything, look to sell when there is good profit, try to retain a piece of the upside where ever you can. For example, if you sell a higher priced domain, you can negotiate in stock, warrants, options, profit sharing, retain percentage of ownership so that if it does become more valuable in the future, you have upside. Look to do creative financing and lease to own deals. We are seeing more and more lease to purchase, multi month and year domain purchase transactions using our escrow services. This is a great way to buy in and offer others to buy with flexibility rather than all money down all at once. Work also with a company that is aligned with your interests, secures and protects your domain assets, one that makes money when you do so that they are incented to work harder to help you be successful."
 
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Lesson 4

Brett Lewis, Lewis & Hand:

"Do the right thing. Don’t build a business on registering trademark domains, because it will get you sued. Some of those guys make money and some of them get sued. Honor your agreements. Don’t sign agreements unless you plan to follow through on them. In other words, do the right thing!!"
 
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Lesson 5

David Castello, Castello Cities Internet Network:

"Domain Investor (non-Developer) 1) Only invest in dotCom or Top 10 ccTLDs until you really know what you’re doing (or usually win at roulette in Vegas). 2) Target names that have high end-user potential (most of them will also have high SEO potential). 3) Do not buy a name simply because you think other domainers will want it. Most of them are broke anyway 4) Read DNJournal.com’s weekly sales report.

Domainer/Developer 1) Only invest in dotCom or a ccTLD (if your business is based that country). Yes, you can possibly make money with dotTV, dotME or DotCM, but I don’t believe in working ten times as hard for the same revenue. Furthermore, dotTV does not stand for television, dotME is not about you and dotCM is not typosquatter heaven. They are the ccTLDs for Tuvalu, Montenegro and Cameroon – and if you think that will never matter down the road think again. 2) Target names that also have direct navigation and built in SEO potential. Steer clear of catchy names with no meaning (for more insight into this read about most IPOs from 1999-2000 – for every Pets.com there were a hundred more you can’t remember because the names didn’t mean anything to begin with). 3) Learn WordPress or Dreamweaver (or you’ll end up working and taking direction from your webmaster instead of the other way around). 4) Read DNJournal.com’s weekly sales report and every other blog out there by a Domainer/Developer (like Elliot’s Blog)."
 
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Lesson 4

Brett Lewis, Lewis & Hand:

"Do the right thing. Don’t build a business on registering trademark domains, because it will get you sued. Some of those guys make money and some of them get sued. Honor your agreements. Don’t sign agreements unless you plan to follow through on them. In other words, do the right thing!!"
Would like this post multiple times if I could!!
 
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Lesson 6

Mike Mann, Grassroots.org:

"Do extensive research on each investment, use all the technology available, invest a lot."
 
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Lesson 7

Adam Strong, Domain Name News:

"ALWAYS SHOW UP TO THE AUCTIONS If you don’t go/attend/watch you may miss out on a great deal. I’ve been to many auctions and scored a deal I wasn’t expecting to get. I either thought the domain was going to go higher or had a higher reserve. I may have not seen the possibilities behind the domain until that day or known about some of the revenue/traffic/potential of the domain until that day. Auctioneers lower prices mid-auction now. At live events auctioneers are now giving insights in to the domain you might not have known. . . traffic, revenue, etc. New domain inventory gets added last minute. There’s all sorts of
reasons to show up. I see it on the forums all the time . I hear it from my colleagues all the time. . . “WOW that was a steal ! I wish I’d have been bidding ” I’ve been going to auctions outside the domain realm for over 20 years and the same thing applies. . . you just never know what’s going to happen until you show up for the auction."
 
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Lesson from me, don't even try to find buyers here as most of the users here is poor students and dreamers, find directly end-users.
 
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Monte Cahn's "diversified" approach fits my MO. While I've been in this league for less than a year, my domain portfolio is well diversified imho. Being a business guy first, I register domains that are more suitable for business, and I focus on industries that can best afford to speculate with a new domain name.

I'll take bits and pieces of advice from domain professionals and formulate my own strategy. Despite what you may hear from some of the old timers, keep tweaking your game until it works for you. Good Luck!
 
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