Dynadot

11 tips for beginner domainers, from my experience and around the mistakes they do.

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twiki

Top Contributor
Impact
14,692
I have been asked today by someone via DM what is my process of selecting co's, and getting those sales. (side note I prefer to offer advice only publicly)

Here's my response, I think it will be useful to others as well.

What this domainer didn't know is that he asked the wrong question. Part of which might have become a little more clear when I mentioned my budget (5-fig and looking at 6-fig somewhere within a year).

The good question would have been instead:

"What would be the best investment decisions and base advice for someone like me, just starting?"

Well I can answer that. Here are a few ideas, without being an exhaustive list:

1) Invest in com's first. And only com's. Might seem counterintuitive, but it's the best thing you can do as a beginner.

When I started I followed this advice from others, without understanding it much. Yes I sold other tlds, for 3 and 4-fig (beginners' luck). But the thing is, as a newbie you will buy a lot of meh and even a lot of c**p. It's inevitable, it is how you make your hand.

Well, I sold the whole .com lot before the end of my first year. $299, $199, $50 and even $2. Everything was sold. I ended up getting new, better com's and making a bit of profit on the whole lot of bad quality (yes, those were not so good domains). My choice for .coms have really saved that first year.

Experienced people know what they're talking about. I learned that first hand.

Stay away from co, xyz, net and org at first. Or, if you're tempted, invest say $50 or any amount you can afford to lose, just for a test. Don't ever put much hopes in other tlds, when just starting.

If I have picked any other tld, my first year failure could have killed the whole thing.

Edit: Don't also forget that renewals are more expensive for other TLD's, in most cases .com is still the cheapest to renew.

2) Think about your competition, and choose your sourcing venue properly.

As a beginer, you can't really head on to DropCatch and bid a ton of money. Reason is simple. The competition is high, your budget is small and your expertise is very limited. You will end up buying domains that are either too expensive for you or unsellable. There will be some good examples for proper buying venues below.

3) Remember the 1...2% yearly sales ratio.

If your domains renew at $9 (most do, or higher) and the common sales ratio is 1..2%, then you need to sell your domains at $1000 or more, to cover that $900 investment and earn $100. If your domains don't sell and you have to renew them again, cost increases again. This is a longer story as you can increase ratio by using smaller prices, but anyway, long term you will hit this barrier.

However, if you choose only coms, you can always increase that % by lowering price and clearing them out at 2-fig and low 3-fig range. This works only for com, not for other tlds.Yet again, a reason to start with coms.

4) Other TLD's have a much worse sale ratio. Again, stick with com.

.net has like 15% of the volume of .com, .org like 10% etc. Now these are rough figures, not precise, but anyway. Another issue is that the average value for the same domain is way lower for any other tld. Once again, stick with coms: You not only have the highest sales ratio and volume possible, but also the price is the best - other tlds will be way cheaper. Multiply these, and see the combined effect on your income.

5) Go to sources where domains can be good, yet still affordable for beginners.


One of the best sources for that is the bargain bin on Namepros, and auctions as well.

I often liquidate coms there that can be sold for hundreds and often even for 1k+. Reason is, I have better names to keep and I'm trimming down some fat sometimes - not just to cut investment but also to keep the management hassle a little lower. I know they are sellable, and get picked often.

The names there will vary in quality but there are gems to be found. Some of the best deals made here were buying some domain for less than $20 and then flipping them for many thousands. I also got great names here in the same way.

Another such source is Nameliquidate.com . But you have to be persistent. Sometimes GD auctions can end in a good price for you on a com domain, perhaps not worth 5-fig, however one you can make profit on.

Edit: One of my first good domain sales was one bought on GD auction for $50. Beginners luck - one month later it sold for 1.5k. A whole year has passed then, until I made the second 4-fig sale. Just for curiosity.

6) Stick to 2-words max.

The reason is, again, very simple - 3-words and more behave exactly like other TLD's. Lower prices, much lower sales ratio. Unless your 3-word is very good and you have a lot of luck to have picked that exact winner, chances are high you will end up with money lost down the drain.

7) Don't straight mimic the strategies of more experienced domainers. One thing you likely don't have is their budget. And most importantly, their experience.

Start small, feel each step around and don't buy a lot. Buy with accuracy, not with volume. As it has been said around here, you need a fishing rod, not a net. It will likely take a couple years or more until you begin to make more money and see things more clearly. It is called experience. There's no successful domaining without it. No super tools out there will replace it. You need time.

8) Since NP is so important, make sure you keep your feedback 100% positive.

This ensures you will not be denied trades. Don't bid unless you have that money available. Don't sell domains you don't have anymore. Simply said, you need to keep your word in the sales section, both for selling and buying. Otherwise that negative feedback you get will remain there and haunt you.

9) Stick to complete words. Don't experiment with exotic word variations.

Not until you get a full control over what you are doing. "Cryptolizzy" might sound cool or whatever, but trust me, chances are they are bad. Very bad. There are modified names worth holding that you can hand reg; but again, until you really figure out what you need to do precisely, stay away from these.

10) Stay away from hand regs.

There is a reason these domains aren't taken. Decades have passed and they haven't been taken. Many beginners fail by regging a lot of c**p like that. Yes there are money in hand regging, but again, not as a beginner. Stick to pre-owned domains, chances are MUCH higher you'll get a valuable there. Sources? See above points I talked about.

11) Understand this - You are late to the party. You need to thread carefully.

The field is already mature, and top names are long taken. The odds are against you. Competition is fierce. Auction high bidders often lose money overall, unless they bid to own and use the domain, not sell it further.

95%+ of those starting today will likely end up losing money overall. This is why you need to start small, gradually and follow things like those mentioned above. With time, if you are made for this and work hard you will find an edge - your niche, the way to make money with domains. Otherwise, you won't.

Margins are most often not so high in domaining. 40% per year is probably just right (varies). So if you have 10k invested in domains and make 4k in profit over the course of an year (edit: plus able to renew the ones that needs renewing), that's probably right. Which means, you need to build capital, OR strike the best names from the very beginning, which I'm afraid it's a very low chance.

Thats it for now, cause otherwise this will turn into a full book. Good luck there!

Feel free to comment, and if more experienced, add more tips as to help with the most common mistakes beginners make. Thanks!
 
Last edited:

twiki

Top Contributor
Impact
14,692
thanks - some nice tips @twiki.
I have always this question - what quantity of domains the 1%-2% ration is applicable. (is it 100 or 1000?)

Any quantity. It's rather simple math.

If you have 100 domains, at the known average 1% sales ratio per year you will sell roughly 1 domain per year and 99 remaining. (average in the industry is 1%...2%)

But 100 COMs cost about $9 per year or more. That's $900 or so. But if you buy them at $20, it's even double.

So that domain needs to be sold at over 1K otherwise you lose money. If you buy them at $20 each, you need to sell at >2K, that's 3K if you want to make profit. Otherwise you lose money overall.

Edit: However for coms you can increase sales ratio to more if selling in the low xxx range, but then you deplete your portfolio and chances are you are selling too cheap and maybe later won't get similar domains for the same buy price.
 
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TauseefKhan

Top Contributor
Impact
1,268
Thanks that was nice. In my case 100 was not enough. I upped it. Then, 1-2% results started. Maybe it's due to my brandables at BB & SH that hardly moves on yearly basis.
I think those who constantly sell (to an enduser or at retail) 2% yearly are very successful investors. (Outlier sales excluded)
 

Future Sensors

78% of human domainers will be replaced by robots
Impact
8,885
Thanks that was nice. In my case 100 was not enough. I upped it. Then, 1-2% results started. Maybe it's due to my brandables at BB & SH that hardly moves on yearly basis.
I think those who constantly sell (to an enduser or at retail) 2% yearly are very successful investors. (Outlier sales excluded)

Let's start by saying that it's important that you keep track of the ROI on your domain investments. But it's not easy to compare percentages for measuring whether you're a good domainer or not.

The bottomline for new domainers is that you don't lose too much money in the beginning, and learn from your mistakes. Make progress fast by reading and learning, and improve the overall quality of your portfolio. Accept that some names are of inferior quality and don't stick to them. This is often very difficult, because you may feel that you're emotionally attached to all your names. You paid for them, and therefore think they have value. This is however not always the case. In fact, you're competing with millions and millions of other domains for sale. Why would one buy your domain name?

Some respected top domainers have really small portfolios, let's say 15 domains in total. But those domains are of absolute top quality and may sell once every 5 years in the amount of 10 BTC or more per domain, to put it in a way that is appealing today :xf.smile:

Good luck investing / 888
 
Last edited:

Dolly_pee

New Member
Impact
14
I have been asked today by someone via DM what is my process of selecting co's, and getting those sales. (side note I prefer to offer advice only publicly)

Here's my response, I think it will be useful to others as well.

What this domainer didn't know is that he asked the wrong question. Part of which might have become a little more clear when I mentioned my budget (5-fig and looking at 6-fig somewhere within a year).

The good question would have been instead:

"What would be the best investment decisions and base advice for someone like me, just starting?"

Well I can answer that. Here are a few ideas, without being an exhaustive list:

1) Invest in com's first. And only com's. Might seem counterintuitive, but it's the best thing you can do as a beginner.

When I started I followed this advice from others, without understanding it much. Yes I sold other tlds, for 3 and 4-fig (beginners' luck). But the thing is, as a newbie you will buy a lot of meh and even a lot of c**p. It's inevitable, it is how you make your hand.

Well, I sold the whole .com lot before the end of my first year. $299, $199, $50 and even $2. Everything was sold. I ended up getting new, better com's and making a bit of profit on the whole lot of bad quality (yes, those were not so good domains). My choice for .coms have really saved that first year.

Experienced people know what they're talking about. I learned that first hand.

Stay away from co, xyz, net and org at first. Or, if you're tempted, invest say $50 or any amount you can afford to lose, just for a test. Don't ever put much hopes in other tlds, when just starting.

If I have picked any other tld, my first year failure could have killed the whole thing.

Edit: Don't also forget that renewals are more expensive for other TLD's, in most cases .com is still the cheapest to renew.

2) Think about your competition, and choose your sourcing venue properly.

As a beginer, you can't really head on to DropCatch and bid a ton of money. Reason is simple. The competition is high, your budget is small and your expertise is very limited. You will end up buying domains that are either too expensive for you or unsellable. There will be some good examples for proper buying venues below.

3) Remember the 1...2% yearly sales ratio.

If your domains renew at $9 (most do, or higher) and the common sales ratio is 1..2%, then you need to sell your domains at $1000 or more, to cover that $900 investment and earn $100. If your domains don't sell and you have to renew them again, cost increases again. This is a longer story as you can increase ratio by using smaller prices, but anyway, long term you will hit this barrier.

However, if you choose only coms, you can always increase that % by lowering price and clearing them out at 2-fig and low 3-fig range. This works only for com, not for other tlds.Yet again, a reason to start with coms.

4) Other TLD's have a much worse sale ratio. Again, stick with com.

.net has like 15% of the volume of .com, .org like 10% etc. Now these are rough figures, not precise, but anyway. Another issue is that the average value for the same domain is way lower for any other tld. Once again, stick with coms: You not only have the highest sales ratio and volume possible, but also the price is the best - other tlds will be way cheaper. Multiply these, and see the combined effect on your income.

5) Go to sources where domains can be good, yet still affordable for beginners.


One of the best sources for that is the bargain bin on Namepros, and auctions as well.

I often liquidate coms there that can be sold for hundreds and often even for 1k+. Reason is, I have better names to keep and I'm trimming down some fat sometimes - not just to cut investment but also to keep the management hassle a little lower. I know they are sellable, and get picked often.

The names there will vary in quality but there are gems to be found. Some of the best deals made here were buying some domain for less than $20 and then flipping them for many thousands. I also got great names here in the same way.

Another such source is Nameliquidate.com . But you have to be persistent. Sometimes GD auctions can end in a good price for you on a com domain, perhaps not worth 5-fig, however one you can make profit on.

Edit: One of my first good domain sales was one bought on GD auction for $50. Beginners luck - one month later it sold for 1.5k. A whole year has passed then, until I made the second 4-fig sale. Just for curiosity.

6) Stick to 2-words max.

The reason is, again, very simple - 3-words and more behave exactly like other TLD's. Lower prices, much lower sales ratio. Unless your 3-word is very good and you have a lot of luck to have picked that exact winner, chances are high you will end up with money lost down the drain.

7) Don't straight mimic the strategies of more experienced domainers. One thing you likely don't have is their budget. And most importantly, their experience.

Start small, feel each step around and don't buy a lot. Buy with accuracy, not with volume. As it has been said around here, you need a fishing rod, not a net. It will likely take a couple years or more until you begin to make more money and see things more clearly. It is called experience. There's no successful domaining without it. No super tools out there will replace it. You need time.

8) Since NP is so important, make sure you keep your feedback 100% positive.

This ensures you will not be denied trades. Don't bid unless you have that money available. Don't sell domains you don't have anymore. Simply said, you need to keep your word in the sales section, both for selling and buying. Otherwise that negative feedback you get will remain there and haunt you.

9) Stick to complete words. Don't experiment with exotic word variations.

Not until you get a full control over what you are doing. "Cryptolizzy" might sound cool or whatever, but trust me, chances are they are bad. Very bad. There are modified names worth holding that you can hand reg; but again, until you really figure out what you need to do precisely, stay away from these.

10) Stay away from hand regs.

There is a reason these domains aren't taken. Decades have passed and they haven't been taken. Many beginners fail by regging a lot of c**p like that. Yes there are money in hand regging, but again, not as a beginner. Stick to pre-owned domains, chances are MUCH higher you'll get a valuable there. Sources? See above points I talked about.

11) Understand this - You are late to the party. You need to thread carefully.

The field is already mature, and top names are long taken. The odds are against you. Competition is fierce. Auction high bidders often lose money overall, unless they bid to own and use the domain, not sell it further.

95%+ of those starting today will likely end up losing money overall. This is why you need to start small, gradually and follow things like those mentioned above. With time, if you are made for this and work hard you will find an edge - your niche, the way to make money with domains. Otherwise, you won't.

Margins are most often not so high in domaining. 40% per year is probably just right (varies). So if you have 10k invested in domains and make 4k in profit over the course of an year (edit: plus able to renew the ones that needs renewing), that's probably right. Which means, you need to build capital, OR strike the best names from the very beginning, which I'm afraid it's a very low chance.

Thats it for now, cause otherwise this will turn into a full book. Good luck there!

Feel free to comment, and if more experienced, add more tips as to help with the most common mistakes beginners make. Thanks!
Thank you for the expensive mentorship
 
Thanks, @twiki it's always nice that you take the time to write these educational posts.

I agree with all your points, especially not getting attached to some of my 'early' names that were not that good.

Also, unless you are very lucky it takes time to start breaking even/turning a profit. I think there's some big domainer who uses something called the '1000 day rule' to get there. That's 3 years! Domaining is a game of patience...
 

twiki

Top Contributor
Impact
14,692
Well the 1000 day rule also matched my case.

Fortunately I knew that I'm going to be profitable even from the first year, despite ending 40% in red ( -14 k then).

Reason comes from business experience: I know how to do accurate projections and was able foresee with enough precision, where the break even point is.
 
Well the 1000 day rule also matched my case.

Fortunately I knew that I'm going to be profitable even from the first year, despite ending 40% in red ( -14 k then).

Reason comes from business experience: I know how to do accurate projections and was able foresee with enough precision, where the break even point is.
I like to think I'll become profitable by at least then...lol. What gave you the confidence to be so sure after starting down 14k????
 

twiki

Top Contributor
Impact
14,692
I like to think I'll become profitable by at least then...lol. What gave you the confidence to be so sure after starting down 14k????
I've already replied. Read above. Business experience.

Most businesses are in the red in the first 1-2 years.

Edit: Some details if you're unsure:

So, I've spent 41K and earned 27K in the first year. That's -14k. Yet at that point I've celebrated cause it was already clear I'm gonna be successful at it.

So I had like a 60% conversion in the first year. Which means I'm gonna be in profit if I double my purchase efficiency. 60% x 2= 120% - 100% = 20% profit.

If I spent 41K and manage to make 54k in sales, then I'd be $9k in profit. Which pretty much happened in the second year.

It was clear early on it all depends on my skills at finding and buying quality domains. I was aware I was a newbie and didn't know what to buy. So I bought all sorts of crap. Some stuff sold though.

But since I only could go up from there on, there was little doubt I can achieve much more.

Business experience told me exactly what the expectations should be and how to make this work.
 
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twiki

Top Contributor
Impact
14,692
Very interesting analysis...

Thanks but I can assure you it's nothing but common stuff. But of course not every domainer has ever business management experience. It was an important asset for me.

Otherwise, any startup owner regardless the field does the same kind of analysis and projections, in order to see where they are going. And how far in the future the breaking point is. That's what you need to look for.

Few businesses start profitable from the beginning. The question is, can you improve it enough to make it work.
 
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