Can I make a full time living from selling domains?

[Sjpals]

So this is how I spend my Friday night, lol

Someone asked ages ago if domaining is possible full time, eg selling enough domains each year to make a full time living (strictly sales, not parking or developing etc). We all see the headline domain sales, but what about the seller who sells each domain at $1000 or below? People say that you need a huge portfolio and that the sell through rate is 1%, eg you may sell 1% of your portfolio in the year. Like most people, I would love to spend all my time buying and selling domains, so I thought I would do the maths.,.

I’m in Australia so this is in AUD, but I’m sure you can all work it out in your own currency…

I want to make $2k per month ($24k a year) to live a moderate life that covers my bills, but nothing fancy.

My domain reg fees are $14.20 (in AUD, it’s the cheapest of the 3 registrars I use). They also charge in AUD, so no foreign fees, and charge the same for transfers and renewals to keep life simple (that’s why I like them!)

I am not taking renewals in to consideration or the replacement of sold domains. These calculations are as if I literally bought all the domains in 1 year and sold 1% of them.

If I have a portfolio of 100 domains it will cost me $1,420 to reg them. Add on the $24k I want to make in the year and I need to make $25,420. If I only sell 1% of my portfolio (so 1 domain) I need to sell it at $25,420.

None of my domains are fantastic quality, and they aren't worth $1000 each, let alone $25K each. So lets see if I can sell them for $1000 if I scale up…

1000 domains
Reg - $14,200
Total needed (Add $24k) = $38,200
1% of portfolio = 10
Selling price = $3,820

10K domains
Reg - $142K
Total needed (Add $24k) = 166K
1% of portfolio = 100
Selling price = 1,666

100k domains
Reg - $1.420M
Total needed (Add $24k) = 1.444M
1%of portfolio = 1000
Selling price = $1,444

1M domains
Reg – 14.2M
Total needed (add $24k) = 14.224M
1% of portfolio = 10K
Selling price = $1,422

As you can see, the figures don’t work because the selling price is still over $1K (and there is really no difference in the selling price between 100k domains and 1M domains). So, If I cant sell my domains for $1k or under and make $24k to live off, why not improve the quality of the domains… Well, to get better quality domains you probably need to spend money at auction to buy them, which you also have to add into the calculations.

So, lets say that each ‘quality’ domain that is pretty certain to sell for a higher price than $1000 costs $200 at auction. In real life we have a mixture of domains, but lets say for simplicity we bought all of them at auction. There isn’t a reg price, but it would cost the same amount to transfer the domain to my registrar.

100 domains
Purchase price - $20,000
Transfer - $1,420
Total needed (add $24k) =$45,420
1% of portfolio = 1
Selling price = $45,420

1000 domains
Purchase price - $200,000
Transfer - $14,200
Total needed (Add $24k) = $238,200
1% of portfolio = 10
Selling price = $23,820

10K domains
Purchase price - 2M
Transfer - $142K
Total needed (Add $24k) = $2.166M
1% of portfolio = 100
Selling price = $21,660

I’m not sure that a $200 purchase at auction (or at least one that I would pick to purchase) could be worth over $20K to resell (though we can hope, right??!!!). Lets try once more. Maybe if I purchased domains at auction for $1000, would the figures work? Would I be able to sell domains at $20K?

100 domains
Purchase price - $100,000
Renewal - $1,420
Total needed (add $24k) =$125,420
1% of portfolio = 1
Selling price = $125,420

1000 domains
Purchase price - $1,000,000
Renewal - $14,200
Total needed (Add $24k) = $1,038,200
1% of portfolio = 10
Selling price = $103,820

10K domains
Purchase price - 10M
Renewal - $142K
Total needed (Add $24k) = $176,000
1% of portfolio = 100
Selling price = $103,108

Nope. How ever I work this out, it doesn’t work out. I will never make my $24k a year from selling $1k or less domains. I would have to be exceptionally talented and slightly lucky (and have investment capital) to constantly spend $200 at auction and sell at $20k (and $1k purchases for a 100K sell would probably be very hard to make happen on a consistent basis).

So, what now? Well I have over 100 domains, so how much do I need to sell them at to at least break even and cover the reg fees as a hobby?

100 domains
Reg - $1,4200
1% of portfolio = 1
Selling price = $1,420

1000 domains
Reg - $14,200
1% of portfolio = 10
Selling price = $1,420

10K domains
Reg - $142K
1% of portfolio = 100
Selling price = $1,420

So, as a hobby that breaks even, this works. I currently price my domains for around $1400 AUD / $1000 USD. Whether they sell at that price is a totally different matter as I honestly don't think they are worth that. I have tried some different pricing, some for more, and some for less, but will now keep them all at over $1400!!. I started selling them in April and haven’t sold one yet, but they weren’t all originally bought with resale value in mind. I’ll give it a full 12 months to see if the 1% sell through rate happens for me.

I am happy to hear your thoughts and I would be interested to see any of your calculations if you do any.

 

[Recons.Com]

How do you not make a living in London or Aberdeen with £20000 net salary? I guess it depends how many sprogs you've sprung, but as a single and ready to mingle, or a happy couple (that would be £40000) it's super easy. £1600 for a person each month is easy to live in the U.K.

Ok, maybe for a single and not having to worry about the rent...

For me, in the USA, just property tax, hoa fees, utilities would add up to over 30k/year. Then if you add auto/medical/home insurance, that is another $25k/year. So, that is the fixed 55k expense before anything else.

 

[redemo]

I was originally going to do it selling websites, but then changed my mind, and thought I would try and sell the domains on their own.

I started selling again recently, after re-reading some old Namepros threads and then re-listing a handful of my absolute best domain names. Parking is a waste of time for me, not got the budget for those monster keyword domains. Developing domain names is my bread and butter to earn £2000 through September. Hope my one hour daily outbound sales efforts bring a reward next month in excess of £500, sure would be nice. But like you 2000 is the target.

 

[redemo]

Ok, maybe for a single and not having to worry about the rent...

For me, in the USA, just property tax, hoa fees, utilities would add up to over 30k/year. Then if you add auto/medical/home insurance, that is another $25k/year. So, that is the fixed 55k expense before anything else.

Single = £20000, couple = £40000. Both incomes are easy to pay rent or mortgage in U.K., obviously couple is most easy. Even if you choose to live right in the centre of a major city there are ways to achieve cheap rent. How many people really hustle? Come on, we waste our money left, right and centre all the time. How many people do you know have a written budget and actively review it to maintain or improve their lifestyle while simultaneously cutting costs? I think the pro domainer life is easier to achieve than we think, it's just that most domainers are lazy and prefer to dream than act. 2000 is the o.p.'s target. Let's help him achieve it!

 

[biggie]

Hi

the math, from a plotting perspective, is waste of time.
sure, you can do all the calc you want, but practicalities of buying and building the portfolio will throw that shit out the window.

as mentioned in this thread, you start from nothing.
but what you add or buy... is the profit.

and again, as said before, the profit is on the buy side.

so now you're looking at margins of profit, when you go shopping.
as these will hopefully get the expected ROI, when sold.

shopping is the art of buying what you think has appeal, maybe not today, but in the future

since many long time domainers hold names for 10 years of more, then it may take that long for you to start getting an average STR. it may also take that long for some names to mature.
but STR is not as important as ROI,
i only have 200 names but could sell 1 for 3x's the renewal cost of the entire portfolio.

so to me, it's more about getting highest return on each sale, than on how many domains you sell in a year.
because you have to consider the cost to "replace" each name and it's quality level, if you want to sustain or grow your portfolio.
and we all know that the costs and the competition is increasing.

now all that is just to keep the domain ball rolling.
what about living expenses or family needs, food, shelter, taxes, health, emergency, savings, etc. etc.
all those costs are going up, so where's the math for that?

imo.....

 

[Namingfy]

So, what now? Well I have over 100 domains, so how much do I need to sell them at to at least break even and cover the reg fees as a hobby?

100 domains
Reg - $1,4200
1% of portfolio = 1
Selling price = $1,420

Typo.
Reg - $1,4200
Should be
Reg - $1,420 ?!

Good article, and Thanks!

 

[Sjpals]

Typo.
Reg - $1,4200
Should be
Reg - $1,420 ?!

Good article, and Thanks!

Yeah, I noticed!! Thanks.

 

[NYJimbo]

So, If I cant sell my domains for $1k or under and make $24k to live off, why not improve the quality of the domains… Well, to get better quality domains you probably need to spend money at auction to buy them, which you also have to add into the calculations.

So, lets say that each ‘quality’ domain that is pretty certain to sell for a higher price than $1000 costs $200 at auction.

You can easily buy domains worth $2,000 or more from the expired list, you just have to know what's worth buying and how to price it.

Personally I know you can do 2%+ STR at $2288 (sometimes higher) from domains on the expired list. It took me about 4 years to finally understand enough to do it.

 

[phaethon]

Single = £20000, couple = £40000. Both incomes are easy to pay rent or mortgage in U.K., obviously couple is most easy. Even if you choose to live right in the centre of a major city there are ways to achieve cheap rent. How many people really hustle? Come on, we waste our money left, right and centre all the time. How many people do you know have a written budget and actively review it to maintain or improve their lifestyle while simultaneously cutting costs? I think the pro domainer life is easier to achieve than we think, it's just that most domainers are lazy and prefer to dream than act. 2000 is the o.p.'s target. Let's help him achieve it!

This figures are about living in UK shitholes and there are plenty..

 

[Sjpals]

This figures are about living in UK shitholes and there are plenty..

I originally come from the UK. I currently rent my 2 bed house out for GBP685. It's nowhere near london. There are other places in the UK, all in small towns that are nice places to live, and cheap enough for GBP20K to be easy for a single.
My $24K AUD that i'm aiming for in Australia, however, is woefully low and based on my lifestyle of living in a campervan or housesitting.

 

[redemo]

This figures are about living in UK shitholes and there are plenty..

Speak for yourself, and provide some data please. Ta.

 

[redemo]

This figures are about living in UK shitholes and there are plenty..

It's just complete nonsense mate. Really unless you're living in Pall Mall then 40000 between two people is a perfectly adequate U.K. household income for a couple who don't waste their money.

 

[redemo]

My $24K AUD that i'm aiming for in Australia, however, is woefully low and based on my lifestyle of living in a campervan or housesitting.

20000 U.K. is 34000 A.U.D.

 

[Sjpals]

20000 U.K. is 34000 A.U.D.

Yep, my aim is much lower, but I live in a campervan or so housesitting, so don’t require much.

 

[zomainhacks]

You need more than 1K domains to have regular cash flow, that 1% str is in the population and 1000 observations is a small sample. For the first years you have to take into account growth and more volatility (riskiness) in general.

 

[Sjpals]

@Aznagui - take a look at some of these calculations for starters

The answer to is it possible to make 1M from $100 in 5 years, is no, unless you are extremely lucky and sell a single domain for a lot of money.
$100 doesnt buy you many domains, so your STR would have to be exceptional.

The odds are against you and too many variables to work out (and my maths is not that good)

 

[love4ever]

Specially at the current market situation you will make a Full Time Debts !!


.

 

[phaethon]

If you are one of those guys asking for appraisals on the appraisal section, don't even consider investing in domaining yet! To be more specific, don't buy domains! Study until you are confident enough not to ask for other people's opinion about your own assets.

 

[Inframan]

It doesn't work with Calculations at ALL! the first thing you have to do is to learn how to pick names that could sell, and price them to sell, then list them everywhere That's it..
Then your STR would be much more than %1

I wish it were that straightforward. I have a domain listed for $500. I dropped the price to $125 for 24 hours just to see if I overpriced it. No one bought it at $125. The subjective factor for any seller, is does the domain name have any value to begin with? The biggest hurdle IMO is the sheer volume of domains for sell.

 

[Miro Baranasic]

You can easily buy domains worth $2,000 or more from the expired list, you just have to know what's worth buying and how to price it.

Personally I know you can do 2%+ STR at $2288 (sometimes higher) from domains on the expired list. It took me about 4 years to finally understand enough to do it.

But for which average buying price?

 

[stevegpan]

I wish it were that straightforward. I have a domain listed for $500. I dropped the price to $125 for 24 hours just to see if I overpriced it. No one bought it at $125. The subjective factor for any seller, is does the domain name have any value to begin with? The biggest hurdle IMO is the sheer volume of domains for sell.

I guess the 24 hours time frame is too short to catch attention? If takes a long long time to hit an interested party

 

[Inframan]

I guess the 24 hours time frame is too short to catch attention? If takes a long long time to hit an interested party

I hope the real factor isn't it takes a long time to reach an interested party. I've used Sedo's marketplace showcase several times. I got a slight increase in unique views but not offer views, and no sales.

 

[wizard]

Simple answer yes you can if you work hard.

 

[DomainGist]

How do you not make a living in London or Aberdeen with £20000 net salary? I guess it depends how many sprogs you've sprung, but as a single and ready to mingle, or a happy couple (that would be £40000) it's super easy. £1600 for a person each month is easy to live in the U.K.

Depends how you define "a living", yes it will keep the lights on and pay for the food shop, but it doesn't leave much or anything for retirement planning does it, remember that you need that £2000 a month when you are 70 and unable to work, and in order to achieve that you'll need to earn a surplus to invest.

My household income is about £100,000 gross, maybe £105,000, which makes us reasonable comfortable, although not particularly well off (2 adults, 1 child). However we invest a lot in pensions, because I don't want to go from comfortable to destitute in a blink of an eye, or to die working.

£20,000 net with no employer pension contributions, no sick pay, no annual leave entitlement, doesn't sound very good to me. Is this person getting on the property ladder? If they don't, how are they paying the rent when they are 70?

Smarter thing to do would be to earn that £2000 a month in a day job to keep yourself alive, whilst trying to run a side business (e.g. domains or ecommerce) for the other £2000, which will be for wealth building / investing. Rather than trying to live off an insecure business with no benefits package.

@Recons.Com - One thing to factor in to the UK cost of living is that we don't have to pay health insurance premiums as we have universal health care coverage. When we compare US salaries with UK salaries, they are much higher in the US for most sectors (but not all), but the disparity isn't as wide once you factor in health premiums and various other things that we don't pay for. I wish our petrol(gas) was as cheap as yours though!

 

[alcy]

yes but only if you devote your full time to it

 

[biggie]

Depends how you define "a living"

trying to live off an insecure business with no benefits package.

universal health care

Hi

+1 on your post

most never consider all the things that can "eat up" any revenue/profits you may make from domaining.

imo...