discuss Are newbies increasing the competition?

[Arpit131]

Do you think that domaining is hyper-competitive? That a prospective buyer who was going to buy only one domain may end up buying a domain from one of the other players in the industry over you, and hence, as more and more people enter the industry, it is a loss to your business.

Especially if it is the case that you operate in a segment where they can easily enter, do you think that they would take up some of the names that you could have bought and flipped?

Is a new entrant into the industry increasing the bandwidth of the industry or increasing competition?

 

[Rob Monster]

They are making the pie bigger.

They are also learning to shoot the moon:

https://www.namepros.com/threads/yall-wanna-shoot-the-moon.1162085/

That drives prices higher and reduces supply. So, the supply you have becomes worth more not less as more inventory ends in the hands of end-users who won't sell anytime soon.

More money in the domain economy lifts a lot of boots. The only people whose boat gets sunk are the folks who have to sell for chump change and then struggle to get back in the game.

The good news is that there are still tons of great deals to be had if you know where to look.

Godaddy's big acquisition and rising stock price just shows that the markets are starting to wake up to the possibility of domains becoming a respected international asset class.

It seems to me that it is all good.

 

[barman]

What are you worried about exactly? When there's money being made, competition increases.

And to follow up, what can you possibly do about newbies entering the market? You have no control over that.

Focus on what you can control, that is, improving your own education, skills, network, and sales process. You'll be just fine.

 

[BrandAptly.com]

The more saturated an industry is, the more interesting it becomes for me. It stimulates my creative juices and compels me to think outside the box. Heck, I even get rid of the box entirely sometimes. You can always device new strategies and techniques that will leave your competition in the dust. People often erroneously equate experience with skill. Being a veteran domainer does not automatically make you a skilled salesperson or an effective strategist. You will struggle to do well not because you have competition, but because your thinking is not evolving fast enough. A newbie domainer with exceptional salesmanship and moderate to low quality domains will run circles around an experienced domainer with supposedly great names.

My working strategy:
I simply scrape all the businesses in my area out of the Yellow Pages and sort by industry. I then sort the list by domain length. You will be astonished by how crappy some these domains are. I find better variations of their their domain names, register them and test the traffic for 24 hours using a 301 redirect. If the type-in traffic is less than 15 visitors a day, I dump the domain and get my money back. The more competition the business has, the better for me.

If you present the numbers to the respective business owners in a fashion that makes sense, there's an 80% chance that you will sell. Assuming a scenario where the better variation I register gets 20 visitors a day (based on their marketing), here is what the numbers look like:

20 x 365 = 7,300 visitors/year, which is 73,000 in 10 years.
Now will you make a one-time payment of $1,700 for a domain name that will save you from losing 73,000 prospects to your competitor? The answer is a no-brainer. Now, on the off-chance that Mr. X happens to be hardheaded, I make sure he has 20 competitors that will eagerly scoop up his prospects. Even better for me when Mr. Y has a beef with Mr. X. (Human emotions are powerful.The advertising industry has been capitalizing on it for years.) Once I receive payment, from either Mr. X or his competitor, I renew the domain for 10 years for him and pocket the balance. After I sold the first 4, I gave my first 4 clients a rebate of $300 in exchange for solid testimonials. They were very happy to do that. These testimonials sped up the cycle of the subsequent sales by a whopping 40%.

I have been domaining for just 5 months, and this is how I have been generating a steady $6k-$7k over the last 4 months selling 4-6 domains per month. Mind you, the domains I have been selling will be considered crappy by pro-domainers with 'great' domain names. The next step is to automate some of my processes with proprietary software and scale using Lean Manufacturing Principles.

Malcolm Gladwell explains that it takes 10k hours to master any craft. What we often fail to realize sometimes is that the skills we acquire in one area of our life or industry is often transferable to another. You may already have 9.5k hours of expertise. Apply them diligently and competition will never be an issue. In fact, it will merely present an opportunity to learn and grow.

I have domains that I buy outside of my working strategy (that will probably be considered low quality as well). This is mostly for the purposes of testing and learning new strategies that will capitalize on the influx of competition. There are a ton of other strategies I am yet to test. Some of them are just slight variations of what have been mentioned in the forums...or a unique combination of them.

I love domaining. I never wish that I had gotten in earlier. THIS is the time for me. Bring on the competition.

 

[manpreet]

I think competition is actually good and its within the eco-system. While each year many new people enter, many Quit too. I have seen equal numbers in the past years, people enter with enthusiasm, play around the first 1-2 years, they register and buy some crap names and after a year or two they quit saying its a number game, etc etc.

 

[Reddstagg]

Good Morning Diet Ham,

I'm a Newbie and in my head I'm smashing it.

However, I started in this industry with a plan. It wasn't just a hit and miss approach. I listened and I learned. I read as much as was possible and then I took the plunge.

To start with, all of my domain names were hand registered, so I was only eating into a small pie.

Then I took the plunge and started ordering big pies. I took a few bites before I realized that most of the dropped or expired domain names were not any better than some of my hand registrations so I went Vegetarian and stopped eating all the big pies.

When I see or think of a name it has to hit my 'Spot' whatever that may be. I can't explain it and it probably isn't quantifiable but I have to believe 100% in the domain name or how am I ever going to sell it. I am buyer, owner, marketeer, CEO, CFO and even CSO if there is such a thing. I will ultimately be the one selling the name too.

If you can't or won't play in the Premiere League of Domain Investors, then find your league, your game and play by your rules.

Unlike most things, this industry is like structured gambling. Don't ever stake what you can't afford to loose and know when to walk away. If you don't play cards, play roulette but whatever happens you've got to be in a game to start with.

Ignore those (in the nicest way possible) in the roped off high stakes arena as they are not your concern. Will you ever join them? Maybe. It just won't be today.

Red.Black.Odd.Even.

Before entering this domain (see what I did there!!) you have to have a plan. Your plan. No one else's.

If your plan is to make money, then you are doing this for the wrong reasons. It will change how you think, how you react and how you take chances.

If you make money as a consequence of your actions, then that is the cherry on top of the cream on top of your pie.

Don't just follow the .rulz make new onez.

Nothing is forever and everything evolves. The key is to keep walking forward.

Regards,

Reddstagg

 

[hawkeye]

Really depends on which side of 'more newbies' entering domaining debate one is on.

A - Isn't/hasn't been good for those that buy expiring domains. (Some stupid prices now being bid up on names).

B - It's been great for the auction house like GD and DropCatch etc. (They're making a killing on those stupid prices!)

 

[wwwweb]

Really depends on which side of 'more newbies' entering domaining debate one is on.

A - Isn't/hasn't been good for those that buy expiring domains. (Some stupid prices now being bid up on names).

B - It's been great for the auction house like GD and DropCatch etc. (They're making a killing on those stupid prices!)

This post pretty much said it all, a lot of people are stepping over each other without even considering their end user simply based on FOMO. Names will always circulate based on recessions, divorces, debts etc... The auction houses basically have investors paying more than what some end users are willing to pay.

Anyone can buy domain names, but truth be told the money is made on the buy, any downturn in the economy will have newbies losing money on their buys at today’s prices.

 

[JB Lions]

If your plan is to make money, then you are doing this for the wrong reasons.

What? That's the exact reason why people invest. Even if you want to call it gambling, gamblers want to make money.

 

[Joe N]

If your plan is to make money, then you are doing this for the wrong reasons. It will change how you think, how you react and how you take chances.

If you make money as a consequence of your actions, then that is the cherry on top of the cream on top of your pie.

This is a curious piece of advice... particularly since most of us started doing this precisely because we want to make money.

If your goal is to kill time and have fun, then domaining is a hobby for you. Which is cool! We all need hobbies, and most hobbies cost money. So heck, why not domain collecting?

However if your goal (like most) is to have fun while making money, then you must treat this like a business. You must recognize that only certain domain names are truly an investment. And newbies absolutely need to change the way they think. They can't afford to simply buy what feels right and blow money on unfounded chances. They need to examine data. They need to put in the trial and error work. They need to follow examples of successful investors.

If you don't play cards, play roulette but whatever happens you've got to be in a game to start with.

Don't play roulette either (unless you just want to have fun losing money). Terrible odds!

 

[Domain_savvy]

Were you not a newbie at one point?
Did you increase the competition?
Answer is simple, no.

 

[Shaan Chopra]

No, they are making the pie bigger, bringing in the fund, which is actually required or this industry will dry out. let me explain how this is happening and why is it good, as a single person one can not reg all the TLDs of all the domain name. The trend is people are shifting to other TLDs. This shift adds up to the opportunity lost cost. New entries like me are taking out those next best options which the end-user has. Is the competition increasing? No, because only one person can own example.com. Are the options increasing? Yes, they are and industry needs more people to make this domaining industry work.

I am a true believer of this quote by Peter Drucker "marketing & innovation are the only to functions of a business and rest all are cost" Now just sitting with a great domain will not work, one has to innovate and market it well to move ahead.

However, I also see this as a cycle, new guys are scared of the old guys because old guy has example.com and the new guy has crappy example1.com. Once the old person sells out example.com the new guys example1.com is a diamond. Old guy regs example2.com and the circle goes on.

 

[Rhinnnn]

Are experienced doctors worried about new doctors? I doubt it. Do they seek to maybe close med schools out of fear of competition? No.

Are experienced lawyers worried about new lawyers? I doubt it. Would they close law schools if they could? No.

While there are no domaining schools per se (wouldn't that be interesting?), forums like this one can be considered something akin to schools. Should veteran domainers try to keep newbies out? No. Should they be worried about anything? No.

Competition is good. If any domainer is anxious vis-a-vis newbies, perhaps he/she should think about finding other sources of income.

Full disclosure: I am what seasoned domainers would call a newbie.

 

[iAdam]

Everyone was born a newbie, we live and learn. I'm sure that there's newbies that they are doing better than older domainers. Smartness is what makes the difference.

 

[Oblivious Fella]

I'd say new entrants are good as they are helpful in spreading out the awareness about domain names. From competition point of view, healthy competition is always good and when you do smart & hard work, you get your bread & butter. Most important point for me is that newcomers are widening the base of domain retailer market & that is a nice thing.

 

[Internet.Domains]

Basic economics at play here. We need more people and more competition. It increases liquidity through supply and demand.

If anyone is having a hard time understanding why competition or more people participating is a bad thing, consider this. If only one person was left grabbing drops and regging by hand, what do you think that would do to the retail side? Retail prices would fall.

Competition keeps retail prices up. We need competition. We need growth. Our retail prices depends on it.

 

[Samer]

They make it easier, when they buy ngTLDs...

Dont waste your $... until u master .coms. IMO!

Good luck to all noobs! Make account today

Samer

 

[karmaco]

The domain industry is super competitive and everyone is your direct competitor. That being said, not everyone has the same skill set or wallet so this competition aspect does not generally affect your ability to obtain good names and sell good names.

 

[oldtimer]

In my opinion Newbies are helping to make the domain Industry bigger and can give more credibility to domaining if they act responsibly both when it comes to handling their finance and domaining strategies so that they don't come across as people who are addicted to this hobby and can't control themselves and also by acting professionally by not following the wrong paths that would make domainers look like cyber squatters, TM infringers, or spammers.

All and all Consciousness and Righteous domainers who want to create value through their domains both for themselves and the end users that they sell their domains to can be an important asset to the domaining community and Industry.

On a side note, my advice to Newbies is to go after quality over quantity both when it comes to buying domains from the aftermarket and also if you are hand registering them yourself. Keeping a small portfolio that you are continuously upgrading when it comes to quality is not only easier on your pocketbook as far as renewals, but it's also a lot less stressful when it comes to maintaining and managing your domains. Playing the numbers game by trying to create a very large portfolio is a very risky endeavor that you might have to wait until you have enough knowledge and experience before you can take on such plans and even then you need to be aware of the fact that only a small percentage of domainers have been able to make large portfolios become profitable as it is very hard to maintain the same level of quality as a portfolio becomes very big.

IMO

 

[frank-germany]

They are making the pie bigger.

The are also learning to shoot the moon:

https://www.namepros.com/threads/yall-wanna-shoot-the-moon.1162085/

That drives prices higher and reduces supply. So, the supply you have becomes worth more not less as more inventory ends in the hands of end-users who won't sell anytime soon.

More money in the domain economy lifts a lot of boots. The only people whose boat gets sunk are the folks who have to sell for chump change and then struggle to get back in the game.

The good news is that there are still tons of great deals to be had if you know where to look.

Godaddy's big acquisition and rising stock price just shows that the markets are starting to wake up to the possibility of domains becoming a respected international asset class.

It seems to me that it is all good.

https://namebio.com/blog/dont-shoot-for-the-moon/



-quote start

Rob Monster of Epik recently started an interesting discussion over at NamePros about “shooting the moon” when selling your domains. Basically the premise was that you don’t know how much the buyer would be willing to pay, so you might as well ask for an astronomical number and see what happens.

After all, you can’t get a high price if you don’t ask… right? Plus you can always offer a lease as a cheaper alternative, or you can walk your price back down.

For 99.99% of you this is terrible advice. Why?

Because getting a crazy sale is a numbers game, and you don’t have the numbers.

By the Numbers
Mike Mann is notorious for selling seemingly mediocre domains for shocking prices. I hear this all the time from new investors, and also surprisingly from some seasoned players:

If Mike Mann can sell something bad like AnimalsUnited.com for $39k why can’t I do the same? Maybe I should raise my prices… my domains are better than that one.

Well maybe, but you don’t own 352,316 of them.

Let’s look at how Mike Mann actually prices his names:

Range Number Percentage
$250 or Less 1,368 0.4%
$500 or Less 9,026 2.6%
$1k or Less 20,257 5.7%
$1.5k or Less 32,744 9.3%
$2.5k or Less 81,661 23.2%
$5k or Less 134,837 38.3%
Higher than $5k 217,479 61.7%
Higher than $10k 175,426 49.8%
Higher than $25k 68,358 19.4%
Higher than $50k 20,090 5.7%
Higher than $100k 3,863 1.1%
50% of his names are priced at four figures or less, 38% are priced in the sweet spot at $5k or below, and 6% of his names are even priced in the three-figure range. Even the poster boy for ridiculously awesome sales is not just blindly shooting for the moon on every domain.

In the past year Mike Mann has reported 25 sales in the five-figure range. While he probably doesn’t report every sale, that is only a 0.014% sell-through rate for names in that range.

Let’s pretend for a minute that your entire portfolio was of similar quality to the cross-section of names he has priced at $10k+, and that you priced them all $10k+.

At that rate, if you own 500 domains it would take you around 14 years to get a single sale. If you only own 100 domains you would only make one sale your entire life.

For most of you, if you shoot for the moon you’re going to end up missing and floating around in space until you suffocate. Dark, I know… but it’s true. You won’t make any sales, you’ll bleed money from renewals and new acquisitions, and you’ll eventually say the domain industry is rigged and rage quit.

Survivorship Bias and Retail Comps
Retail comps have no predictive value whatsoever. If Mike Mann sells a mediocre domain for mid five-figures that says absolutely nothing about what your domain would sell for. Not even if your domain is very, very similar to his or is different but better. Let that sink in for a minute; read it again if you have to.

Your buyer is not Mike Mann’s buyer when he gets a crazy sale, your buyer is almost always Mike Mann’s buyer when he sells for 3-4 figures. You don’t have enough inquiries to stumble across the person with big plans and an even bigger wallet with any consistency. It might happen once a decade. It might never happen.

You are not Mike Mann either. He is making multiple sales a day, so if one deal falls through he’s not going to starve. That puts him in a very strong negotiating position. He probably does more end user sales in a day than you do in a year. You can’t afford to not care if a buyer walks, even if you do your best to adopt that attitude to project strength.

With retail sales all you hear about are the lightning strikes; the big sales; the often lucky sales. You don’t hear about the hundreds of thousands of domains that are overpriced and never get an inquiry. You don’t hear about the people struggling to make renewals because they’re shooting for the moon and missing. And perhaps most importantly, you don’t hear about all the solid sales the seller missed out on trying for that one lottery ticket.

You only hear the success stories, and that makes you believe you can do it too.

Why You’ll Probably Never Make a Crazy Sale
Let’s go back to the $39k sale of AnimalsUnited.com that I mentioned earlier. Crazy right? If only you owned the name that could have been your conquest. But what most people don’t fully appreciate is that to get a sale like that you have to first turn down $500, $1k, $2.5k, $5k, $10k, $15k, $30k, and $35k before you finally get to $39k.

Could you really turn down a $5k offer on a name you probably got for $50? I know I probably couldn’t. And even if you could… should you?

It’s much more likely that the buyer ghosts you at that point than increases his offer. At the end of the day you’ll score more by hitting a lot of singles and doubles, than swinging for the fences and striking out 7,000 times in a row (the odds of Mike Mann hitting a home run).

If you’re not in a position to turn down phenomenal returns you’ll never make those legendary returns. Even if you had the right name, in the right place at the right time, with the right buyer; you weren’t the right seller. Everything has to come together. So stop trying, you’re just scaring away solid sales playing extremely long odds.

What should I do?
That depends on where you are now and where you’re trying to get to. Maybe you’re just doing this for fun, you only own 50 good names, and you couldn’t care less if you make a sale as long as you live. If that’s you, by all means, shoot for the moon every time. You’ll probably never make a sale, but who cares.

I suspect most of you have small to medium sized portfolios, domaining is currently your side hustle, but you’re trying to grow it into a serious revenue stream. If that’s you, don’t get distracted by this sideshow of “shooting the moon”. Price your names reasonably, re-invest into better names after each sale, and be patient and consistent. It will happen eventually.

Only if you already have a large, high-quality portfolio can you play the lottery game of going for crazy sales and actually win. But like Mike Mann, you should only do it with a small percentage of your portfolio. The rest should be reasonably priced for steady cash flow.

Regardless of your status, list all of your domains for sale on Afternic and Sedo, price most of them and make it a reasonable number, and opt them into the MLS/DLS so they get into the registration path. If you do that you’ll be ahead of most domain investors, and well on your way to growing your portfolio.

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Michael Sumner
Michael Sumner is the CEO of NameBio.com, and is the lead developer at State Ventures which owns and operates geo domains such as OceanCity.com and Maryland.com. Michael is also the co-founder of DN Media, a company that has been involved in seven figures worth of domain name transactions.



-- quote ends

 

[Rob Monster]

Don't start again.

And making the pie bigger is still ridiculous. Having more people bid in auctions just drives up acquisition costs. Good for you if newbies spend money since you're a registrar and make money whether the regs are good or bad.

Yup, we'll have to agree to disagree there.

For emerging markets I am more focused on other scenarios that are low capital intensity:

- Buy $1.99 .CO on promo and sell retail.

- Expiry domains

- Arbitrage notably on lower end names

We are working on some technology innovations that will allow emerging market brokers to sell names from NameLiquidate by serving as Exclusive Brokers. All they have to do is fund the transfer fee so the expiring domain is not lost, and then they get a 7 day brokerage exclusive.

More details soon -- for all those folks who are getting zero from their expiry streams, it should be really good news and it is absolutely an example of making the pie bigger.

 

[Reddstagg]

I do think of this as a business and always call myself a domain investor, although I am the first to admit that I do have the hoarder mentality.

However, many people who go into business first started out as hobbyists and then realized that they would like to run it as a business. It takes years to turn a profit and domain investing is probably no different.

There seems to be too much emphasis on selling domains and people are quick to just label you as a newbie who didn't listen because they haven't made any sales.

This then seeps into the collective psyche of domainers in general and then they too get frustrated as they are not selling their domain names.

I go on-line several times a day and probably spend 2-3 hours daily organizing myself. I have spreadsheets which keep details of my portfolio as well as my profits and losses. I have lists of lists and maybe/to be registered domain names.

I watch the news, use social media and interact on NP on an almost daily basis. I listen and learn and I read everything that is available to me (within reason).

I've a good balanced dot.com/not dot.com portfolio across many different sectors and although I don't always follow the herd, I am never too far away.

I have a balanced portfolio and a balanced life. I don't have much but I enjoy what I have.

As they say in Yorkshire, England..."I say what I like and I like what I say"

I won't just do what everyone else is doing because everyone else tells me what I should be doing, but I will take it on board and then make my own decisions based on more than 50 years at the University of Life.

Plant based burgers have now crossed over to the mainstream. Try explaining that to the meat eaters. They will denounce it without even trying it.

Adapt.Evolve.Overcome.

Regards,

Reddstagg

 

[Joe N]

90% of people will insist on a loss for 1-2 years and exit,
5% of people will sell a small number of names,
3% of people will make money,
and 2% will be rich.

Real buyers strive for excellence, not ordinary. And the names held by those 90% would be worthless,but they will help the remaining 10% with promotion.

So ,I welcome newbies very much.

Is there any data that supports these numbers?

I'm genuinely curious, not trying to be a jerk. It's just that a lot of us here make similar statements, but I've never seen any actual research to this effect.

 

[Maximinus]

Hello, domainers!
As newbie I can tell you I don't feel like concurrence to experienced domainers.
I am very carefull what to buy and very much rely on handregistration.
I am not the guy who will overbid you for the 8000$ domain, just because I still have no notion of the pricing.
I can feel some name is worthy. but is it 100$ or 100k this only expirience can tell.
Greetings

 

[Abdullah Abdullah]

What is newbie? Oh wait, everyone is newbie to something. I find it ok and dont mind anyone. I believe what is important is for the newbies to read and also try to avoid at all costs TM names, as well trying to represent the industry in a good way by acting professionally, and having professional website.