discuss Is domaining a portfolio game?

Not a portfolio or numbers game IMO, that all depends on a domainers niche or niches within the industry though. domaining still carries the misunderstood meaning as being a buying and selling of domain names niche, it never has been that, it is perceived to be that , the industry offers so many different wide opportunities in a very large spectrum.

I would say to those who have that perception of the industry only buying and selling domain names, plant your feet and branch out to research what all is available in the domain name industry, you will find many many many different options to venture into.

Godaddy is monument to most domainers who came into the industry from 1995 to the mid 2000s , it always will be, Bob Parson built a fascinating business model and the new owners carried it on. I do appreciate the continued domain name after market that they provide.

I spoke with Bob Parsons by phone shortly before the sale of Godaddy.com , Bob was very optimistic that the company would further the innovations, they have done that in some aspects, while in others not at all. but pricing has gone astronomical in a very competitive industry that will keep going with or with out them, The Domain name industry, known as the domainer

If anything, it is "optimal portfolio management" game imho. Because it is what good domaining is about:

Dropping bad domains (even if >regfee were paid) and potential trademarks. Periodical portfolio revision and restructurization, such as dropping or decreasing prices on some domains which, while may still be good for some, do not fit the current portfolio development scenario. Not bidding on own dropped domains after deletion - this happens. Periodical revision of marketplaces like dynadot - namesilo - godaddy auctions - there are, and frequently, BIN deals in $50-$200 range from domainers who are simply restructurizing their portfolios, and really perfect domains can be found. Should they drop - the prices on dropcatch etc will be higher. Strange, but it is a fact. Many prefer to overpay for dropping domain instead of tracking marketplaces before the drop. It is not optimal portfolio management. Also, checking social and technological trends is important. Not only for handregs. Sometimes, it would be wise to withdraw this or that domain from sale - if there is enough evidence that it can be priced higher in future.

... just a few ideas Right for Saturday evening...

Even in the same portfolio you might need to use different strategies for different class of domains, any experienced domainer will tell you that the first thing that you need to do is to divide your portfolio into several sub categories. At the minimum you should have three categories,

The first category should be your premium domains, these are the domains that you usually renew several years in advance and that you plan on holding on to on a long term basis, for smaller portfolios of around 500 domains this might comprise 10% of your portfolio, but as your portfolio gets bigger this percentage can drop drastically to the point that it might be in the low single digits and perhaps it can drop to less than 1% on a portfolio of over 50k domains. In another words the larger your portfolio gets the more diluted it will become as far as quality is concerned. There might be some exceptions for those who were able to create their portfolio 10 to 20 years ago, but even then it was difficult to get many premium domains and so these portfolios became stronger and more valuable by focusing more on the next category of domains as described below.

The second category should be your above average to good domains. For most portfolios this is the biggest category, and as a portfolio grows to become larger this is the category that most probably will get bigger. So when you are thinking of creating a very large portfolio most of your domains might fall under this category provided that you are very skilled domainer and that you have above average luck in beating everyone else to the good domains that everyone seems to be fighting over on the drops and auctions.

The third category should be the domains that you are not planning to renew past their expiration date and that are going to be dropped as you prune and upgrade your portfolio. For very large portfolios of over 100k domains this might become a considerable portion of the portfolio as domains are tasted for a year or two and then dropped if they don't perform.

* Different portfolios might behave differently, and numbers indicated might vary to some extent depending on when and how a portfolio has been created.

IMO

I think the quantity approach is a viable business strategy for domaining. But it takes quantity. If for example you want to make a full time income I roughly estimate you'd need a minimum for 10k .com names with 1% sale through and an average sales price of $2500. That would yield 250k in revenue before commissions. If you assume a full 20% commission on each sale now you're looking at 200k. Now you got renewals (assuming they are all .coms you're looking at under 90k on a portfolio of 10k), new acquisitions, and let's not forget taxes so after all that you might be able to hit say 50-60k/yr. That's alot of assumptions on paper. And a bit of an initial investment to get 10k domains that are good enough. And I certainly would not advocate going out and buying 10k names right off the bat. Start small and start slow in your spare time and let yourself learn what names are more likely to sell.

Lox said:

An understanding of business culture (country, region, city, industry, niche, innovation, etc) is essential for effective sales (1000 dn, 50-100 prospects, 10 sales). Once you understand that, you can start reg. names and build an impressive (for end-users) portfolio.

Regards

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Lots of great posts in the thread
This was a stand-out....

At first glance, it seems like a game of words.

Then, the more you explore, you realise it's also a great game of Math, and it sounds like you're at this point. Personally, I'd say it's 50/50 between Math and English.

One thing in the equation - tax. So we have FS in the Caymans minimising this part of the equation. I'm on 12.5% here in Ireland for the company which is great but the problem is we get hammered on income taxes.

Opinions please: I have 400+ quality dotcom, seasoned names (many more than 10+ years old). If I want to sell the entire portfolio, which company is the best at selling portfolios?

White Fang said:

Opinions please: I have 400+ quality dotcom, seasoned names (many more than 10+ years old). If I want to sell the entire portfolio, which company is the best at selling portfolios?

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Imo such a service does not exist. You may look into the following though -
https://www.namepros.com/threads/frank-schilling-uni-uniregistry-announces-domain-liquidity.1138641/
Not sure are they still doing this now, as the things are changing frequently @ Uni.

I think the OP is getting a bit at different angle, more philosophical than anything.

He is saying, I think, that we often label a name "bad" in appraisals, but 100 "bad" names of the same type, could represent a good investment, because you might be making 1 sale a year that will pay off the investment, the renewals and provide profit. Even without discounts, you could spend $850 on 100 regs, and earn $1500 revenue after commission - $850 for renewal and restock = $650/year for years to come, vs paying $850 for a great name, then maybe waiting 1 to 100 years for a $8,500 one time sale.

White Fang said:

Opinions please: I have 400+ quality dotcom, seasoned names (many more than 10+ years old). If I want to sell the entire portfolio, which company is the best at selling portfolios?

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You could try selling them here. Idk if you'd find anyone for all the names but if you broke them into smaller batches you might be able to get buyers lined up.

Portfolio sales have made me great money in the past. I currently have two on Flippa. One that is 75 incredible dot coms, and the other that has been relisted several times now, which is 105 of the very best Libra related Domains. Flippa requires a login to see the auctions though, which deters lots of potential buyers, wish there was a better platform to sell portfolios!

This is very interesting. Unlike a lot of domainers, my portfolio is very small. I have around 50 domains (to be honest I had even less but I am using some registrar credits to purchase here and there). However, I have invested $XX,XXX in premium names instead. So far my total profit since starting in 2017 is in the mid $XX,XXX range and I still have a couple of premium domain names that are worth $XX,XXX - $XXX,XXX ($X,XXX,XXX to the right buyer). The cost is the yearly reg fee. For 50 domains that is only $450 or so a year.

So my strategy is different. I keep my portfolio very strong and very slim. Kind of like a marathon runner - and like a marathon the completion of the race will take a lot longer but the reward can be much greater.

Also, to add, this works for me because I do this as a side hustle and therefore keeping a small very strong portfolio is easier to manage and maintain. I know there is value in the names I hold and therefore I will renew indefinitely without a huge cost of holding. This won't work for everyone and if you are a full time domainer you may make more money holding a large profiterole.

Edit: I meant profit not profiterole (autocorrect )

Arpit131 said:

I have been thinking and reviewing things and I realised that a lot of times, domaining looks like a portfolio game to me - of course, a decent one.

Even a hand registered portfolio of say, a 250 domain name portfolio with 3% sale at $6 a name would have an investment of $1500 and 8 domain sale of say $700 each amounting to $5,600
Accordingly, the numbers may adjust as we scale up. But when I look at appraisals section with individual domains, a single domain may not make sense a lot of times.

Like say, a single decent .CO domain may not have value individually but if you own 200 of them, price it in $1000 range and expect a 2% sale, that may make more sense.

A portfolio game looks like a decent game in domaining.
What is your thought on this?

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It depends on what you mean by a "portfolio game"? If by portfolio you mean a "group" of like kind domains, I would say most definitely. 90% of my 1,000 plus .com domains are either grouped by industry; real estate, financial services, restuarant and food services, healthcare etc. Or grouped by category like; Catchy domains, BoGo domains, Epik domains, Geo domains and most recently Angel Domains.

This is why I view auctions etc. a total waste of time. Sure I might pick up a name or two that might fit neatly into one of my portfolios, but my time is best spent doing what i do best. Now I'm off to the BoGo Casino to play a little BoGo Poker and buy a few BoGo Lotto Tickets

Lox said:

An understanding of business culture (country, region, city, industry, niche, innovation, etc) is essential for effective sales (1000 dn, 50-100 prospects, 10 sales). Once you understand that, you can start reg. names and build an impressive (for end-users) portfolio.

Regards

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Lox....i've just been at this game for 2 years, but it's my "understanding of business culture (country, region, city, industry, niche, innovation, etc)" that gives me an advantage few people have. Few domainers see it that way, but they've been proven wrong over and over.

Thanks Lox and Happy New Year

ThatNameGuy said:

Few domainers see it that way, but they've been proven wrong over and over.

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How?

Joe Nichols said:

How?

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You know the people who have been making repeated domain sales for many years, and continue to do so, have been proven wrong over and over.

Brad

I think @Arpit131 has a completely valid point. Although I am very skeptical that any old portfolio of names could be profitable. If that were the case, all domainers would be making money, and we know that the majority are not.

However, if you have developed the skill of buying decent quality, low-cost names, then yes I completely agree that a larger portfolio should amount to higher and more consistent (i.e. less variable) profits.

I personally would prefer to be in the position of @Arfy - owning a small portfolio of high quality names. Less risk, more long-term profit, and more liquidity. This is the way to go. The biggest issue for me is in finding high quality names at a price that I'm willing to pay. Being able to do so is a major advantage in this industry, and a very important skill set to develop if you want to reach the next level of success beyond just making a little money.

Joe Nichols said:

I personally would prefer to be in the position of @Arfy - owning a small portfolio of high quality names. Less risk, more long-term profit, and more liquidity. This is the way to go. The biggest issue for me is in finding high quality names at a price that I'm willing to pay. Being able to do so is a major advantage in this industry, and a very important skill set to develop if you want to reach the next level of success beyond just making a little money.

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Yes, that is a major issue.

Unless you have a ridiculous budget, the more domains you own the lower the average quality is going to be.

I know people that have a low number of high quality domains. It might sound great on paper, but it can also lead to basically a dead end with no cash flow.

There is certainly a balance between quality and quantity though.

Brad

bmugford said:

I know people that have a low number of high quality domains. It might sound great on paper, but it can also lead to basically a dead end with no cash flow.

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I hadn't considered that, foolishly enough. The advantage of high quality names is discussed so much that I think it's easy to start believing they sell themselves regularly for five figures + with minimal effort.

I guess balance matters as much in domains as it does in all other aspects of life.

Joe Nichols said:

I hadn't considered that, foolishly enough. The advantage of high quality names is discussed so much that I think it's easy to start believing they sell themselves regularly for five figures + with minimal effort.

I guess balance matters as much in domains as it does in all other aspects of life.

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I only sell domains to end users, or someone willing to pay end user prices.

I would say probably 80% of my domain sales are very average domains, that had low acquisition prices. Then I mix in higher quality, higher dollar sales also.

It might be hard to replicate today, because these very average domains go for much higher resale prices at popular auction venues than years ago.

These ordinary sales are the type that provide steady cash flow to pay for renewals and capital for re-investment.

Different models work for different people, but you need an actual proof of concept.

If you own a lot of domains and are not getting steady offers it is a bad sign.
Sales are streaky, even for large portfolios, but offers should be far more steady.

Brad

twiki said:

Personally I'm at 2.5K names today, and intend to grow to 25K as there is the earning level I aim for.

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25K domains per capita?
Your time and health are endless???
I was enough at 6K mark... never again.

Jurgen Wolf said:

25K domains per capita?
Your time and health are endless???
I was enough at 6K mark... never again.

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I am highly skeptical that in today's market you can find 25K domains worth buying and renewing in a year.

Brad

Joe Nichols said:

How?

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How?.....LMAO Let me count the ways First they told me I couldn't revolutionize golf and I did, then they told me I couldn't revolutionize domaining (Sp), and I'm doing it By all counts I should be down and out, but Verisign breathed life into this old guy here; https://blog.verisign.com/domain-na...om-price-caps-were-passed-along-to-consumers/

Joe...I may be bad for your business, but there are others besides you and Brad. There isn't a day that goes by that I don't "Make Something Happen" my way!

ThatNameGuy said:

How?.....LMAO Let me count the ways First they told me I couldn't revolutionize golf and I did, then they told me I couldn't revolutionize domaining (Sp), and I'm doing it By all counts I should be down and out, but Verisign breathed life into this old guy here; https://blog.verisign.com/domain-na...om-price-caps-were-passed-along-to-consumers/

Joe...I may be bad for your business, but there are others besides you and Brad. There isn't a day that goes by that I don't "Make Something Happen" my way!

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Rich, most of us live in a world where things don't happen just because you say they did.

Now please stop hijacking the OP's thread just to pump your own tires.