While the question may seem straightforward,
@Maxleron, there are no simple answers. As others have pointed out, it depends on skill, how much startup funding you have, how much energy and time you want to put into it, and I would add luck. Some manage to hand register a domain name and sell it for $$$$ right off, others slave away with equally good names waiting years for that first sale.
Here are a few numbers and thoughts....
- There are about 220 NameBio reported sales per day. We all know that there are many others, 5x that, 10x, some other factor.
- There are over a million people registered at NPs. By no means equally active. But you can see that most of us will not have NameBio reported sales very often.
- We all know the anecdotes of big sales, someone (put in your favourite big portfolio holder here) bought a domain a few years ago for $200 or $50 or even $12 and sold it for $20,000. But for every one of those there are many many more that will never sell and money is lost on. It is called survivorship bias in conventional investing, but people focus on the success and overlook the failed mutual funds / or domain investing names that never sold.
- On average, the entire domain investing community loses money. I am not at all saying everyone does, and I know some on here do very well, but on average, when people are really honest, I am totally convinced by the numbers that acquisition and holding costs exceed net returns. I am going to post the analysis, but not yet finished checking that.
- So to make any money you need to do significantly better than the average.
OK so you plan to be disciplined, hard working and much smarter than the average investor on here. How much might you make. I will do a calculation and you can insert your own numbers.
Example:
Let's say you have $25,000 to start with. You buy domains on average for $125 each (some more and some less). Your portfolio is then 200 names. It depends on how smart you are what the throughput is, but an optimistic number is 1 domain name in 100 will sell in a year so that you will have 2 sales in the year. Congrats! The average selling price on NameBio is $1377 as of today so far in 2018. But that figure is deceptive cause those big $100,000 sales that most of us will never see handled by the high roller types, and indeed some registries and brokers, account for a lot of the high end. So instead we should look at the median price. NameBio no longer display that in stats, but you can for a small set look at it easily. Yesterday for example (Aug 5) there were 177 sales so you scroll through to the 88 th one and it is $271. Now maybe you will occasionally have one off the bigger sales, so lets be optimistic and even though most of the time you will be selling for $271 lets say it is $500. So you take in 2x$500 or $1000. They cost you 2x$125 or $250, but you still have $750 profit, not bad, right? No. You have those 200 domain names costing about $9 per year to renew, so your annual costs are $1800. So you only lost $1050. Welcome to domain investing 101. Do some people beat the odds? Yes. But if you want a probable estimate you will lose money.
I know this example will bring on lots of contrary opinions, but I offer it based analysis I have done as I look at the industry as a whole. If you do good names in good extensions and happen to catch the beginning of a wave you can get lucky. Even then, lets say you have two $5000 sales (and many days no one in this one million person community sells at that price on NameBio). But if you sell 2 at $5000 you will gross $10,750 before the $1800 renewal costs, or $8950. Congrats. That is a fantastic 36% ROI over one year, but only a few on here will achieve that.