discuss Development vs Domains - Where is the better ROI?

[garptrader]

Typical portfolio turn in the industry is around 1% and potential buyers are increasingly reluctant to pay up for a domain. They have many alternatives. Development can get expensive but then again carrying a large portfolio of domains which one has to pay renewals on can be just as costly. Minisites were popular until about five years ago when Google changed its search algorithm. Exact match domains no longer rank with a mere few pages of content. If you have been in the industry a couple years you likely have more than a few names that could turn into real businesses. Ranking in the top half of page one of Google is no easy task. Thoughts?

 

[aramyus]

In your presentation, you imply that SEO is still the main avenue to develop a site. That's not true anymore and today, it's perfectly viable to buy traffic such as fb ads to create a business. There are many non-SEO alternatives to generate traffic and they're often cheaper and more efficient than SEO.

For a developed site, the domain name is probably not so important as long as it's brandable and is reasonably meaningful for the visitors.

For a high value domain (such as 3/4L, single words, top quality keywords...), a developped site adds no or little value to the domain.

For a mediocre domain name, developîng a site is probably the only way to sell it.

The main question is: is developing a site a better business model than domaining ?

I think that a very light development (typically 3-5 pages with the hope to sell on flippa for low $xxx) is no longer a viable business model. On the contrary, developing a site with the hope to sell it for high $xxxxx (for example, an ecommerce site based on drop shipping) seems a very promissing business model.

 

[deez007]

I personally am always pro development.

I'm an Internet marketer first and domainer second. My primary focus is generally on my own developed sites and secondary is domaining. I have a few new projects on the table for this year as well for development. When it comes to driving traffic to a site, it's best to have multiple traffic streams, paid, social and seo. The benefit of developing is that once you get the site running well then you get a consistent income from the site as opposed to a one off sale like with a domain. So it's good to have a few sites to generate a steady income and then domain sales to add to the income. Off course the downside is the investment in developing the site and driving traffic.

Domaining can generally offer better ROI, I mean if you think about a hand reg domain for $10 that you were able to sell for like $1500 few months later..thats insane ROI and not many business models can come close to that sort of ROI. However the downside there is the lack of consistency. Which is why I think both development and domaining work well together..development for income consistency and domainng for those nice cash injections..

 

[SheikhOvais]

I am an Internet Marketer by profession too and am playing the domaining game just as an investor, for now.

To answer your question, I believe that better ROI is in domaining, but "consistent" ROI is in development.

Like @deez007 said, you can sell a domain for $1500, but it can take weeks or months to sell a domain for000 x,xxx figure. But having couple of developed websites that have been marketed properly, have target traffic, and generates income on a regular basis, can help us domainers moving on with our domaining related endeavors.

I do have one tip for those who are thinking of going into domain development. Only develop when you have a goal to achieve, and not just because you think the domain is worth developing. Because when you set goals, you will feel motivated and can keep yourself dedicated to achieving them.

Just my two cents.

 

[Kate]

Where is the better ROI ? The question is not easy to answer, because you have to account not just for the money you invest, but also for the time spent.

A developed site could make more money than a parked domain, but is the time worth it ?
Fresh contents usually have to be paid for, unless you can write your own. It takes time = money.
If you set up a real business on a site (for example dropshipping), it doesn't run on autopilot all the time. Promotion takes time. Even setting up free & open-source software takes time, assuming you have enough technical skills to run a website and configure your webserver.

Finding domains takes time too. Scrubbing through expired lists takes time, contacting domain owners and negotiating takes time. Handling and renewing inventory takes time. Other than that, you can be passively holding domains and wait for offers. Domain names do not require constant maintenance, while websites need to be promoted, maintained and monitored.

Domainers should act like professionals, keep timesheets to track their activity and put a dollar value on each and every hour devoted to their trade. This in addition to proper accounting (revenue + expenses). Then figure out for yourself where your time has been most profitable.

Developing websites and speculating on domain names are two different activities. Not everybody will excel at both. It's not like you can easily switch from one to the other imo.

 

[Kuffy]

This is something that I'm reviewing at the moment. My current thinking is that if a name can generate twice the cost of owning it, then it's worth keeping for a future sale. If it isn't then I need to decide either to sell or drop it, or to try to increase the revenue.

One other point. Domainers seem to think there are only two uses for a domain - to gain a profit from the sale of the name, or to look for advertising revenue. But there are other uses. You could use a name to help to to sell others in your portfolio, or you could use it to filter and amplify traffic to be sent to some of your other domains.

 

[toughdomains]

We have a service that would allow you to develop up to 500 domains at once with news content on each domain. You bulk add 500 names, pick a news provider like CNN or Techcrunch and hit create. After you bulk transfer the DNS all your names are hosted within a few minutes. We offer 20 names for free to test the tool you can host unlimited names for $20 per month.

https://www.toughdomains.com/instant-domain-development