Domainers Are Delusional

[sashas]

I've been away from active buying for quite some time now. I've been busy learning development and trying to make money off my "dead" domains.

Having developed some domains and taken them to $10/day from $0/year, I can say that I have gathered some knowledge about domains, and development.

A good domain name is a gem of a thing to have when you start off development.

But honestly, the domains that I've seen being sold here, and the prices people are asking for them are absolutely ridiculous. Thread after thread have no bids, with prices falling from $1000 to $100 within a span of two days until a final, desperate call for "$50 BIN, last price! Hurry!" sinks the thread. It's clear to me that domains, particularly at the ridiculous prices people are asking for them in the forums, aren't selling.

These prices are not even end user prices. They are beyond end user prices.

I'm not talking of highly brandable, or mega-keyword domains that can be developed into massive web properties, or can attract xxx,xxx monthly traffic. I'm talking of 3-4 word domains in micro niches that won't get more than 500 visitors a month even if you managed to get it ranked no.1 on Google. These 500 visitors would probably make me $5-10/month. If I have to pay $600 for a domain like that, it would take me 5 years to make a return on my investment. Even if that was a viable business choice (it isn't), domainers tend to forget that sites in most micro niches don't stay on top of Google for even 1 year, let alone 5.

I think every domainer ought to try his hand at development to really understand the value of domain names. Thread after thread resulting in no sales should have been enough of a wake up call, but it seems to me that not enough people are really listening.

Oh and one more thing. Although I've been guilty of doing it too, the practice of saying "xxx,xxx" Google results is downright stupid. Simply put, the more results a domain has in Google, the higher the competition. What would make a domain more attractive to me would be LOW Google results, not high, because it is damn easy to rank when you have 5000 competing pages as compared to 500,000

So sellers, before you sell a domain and beam with pride that your little pet has 1 million Google results (with quotes!), maybe try and understand that higher Google results is actually a deterrent. High numbers in the Google Adwords tool are certainly very, very attractive, but search results aren't. The ideal domain is one that has high searches per month as per the Adwords tool, but low competing pages in Google.

 

[Name Trader]

So Sashas, what can you tell us about turning our dead domains to $10/day. What have you learned which we can emulate? This is a serious, not tongue in cheek question

 

[sashas]

So Sashas, what can you tell us about turning our dead domains to $10/day. What have you learned which we can emulate? This is a serious, not tongue in cheek question

Just a few tips:

1. Pick low competition, high CPC keywords with at least 3000 EXACT searches per month (not Broad or Phrase) in the Google Adwords Keyword tool.
2. If you use Wordpress, use pages instead of posts (i.e., make the site static, not blog style).
3. Write at least 10 articles related to the keyword(s). Submit to EzineArticles, GoArticles, ArticleBase, and if possible, to ArticleSnatch, SearchWarp, ArticleAlley and ArticleDashboard. Make EzineArticles your top priority and submit your best work there first.
4. Create linkwheels for link juice.
5. Get multiple hosting accounts (or hosting accounts with multiple class-C IPs) and use your own PR domains for link juice. Don't make your site interlinking very obvious.
6. Always use a Whois guard if you do interlink your sites.
7. Bookmark, submit RSS feeds, create videos if possible, etc. All depends on the kind of niche you are in.
8. Experiment with themes until you get a 10-20% CTR.

Having the keyword your are pursuing in the domain itself can be a huge bonus, particularly if the domain is somewhat old or has some PR.

 

[Steven]

Thank you for the post in regards to tips for the development.

Development is the key.
However, some of us don't have the time to develop and constantly update.

How do you manage to get a good conversation rate for "decent" traffic /month?

 

[garptrader]

As Sashas states, a phrase with high-search volume can still have difficulty getting traffic if there are millions of Google results for that phrase. If your site isn't on the first two pages of Google for some search phrase, where is your traffic going to come from? (personal example of mine WeightTraining.tv) Well, you can do massive link building but that doesn't happen overnight. On the other hand in September someone bought a very brandable domain from me for $799 but the search volume for that exact phrase is practically zero.

 

[InsanerDomainer]

It's an extremely illiquid market. It's not like used cars where there are only thousands on the market in a given area. There are millions of domains for sale in a global market, and each of them are unique. So it's hard to find a buyer. I think that is the main problem, assuming you have good domains for sale. And then compound that with the fact that most domains are worthless. It's as if the biggest used car lot in the galaxy was overwhelmed with cars that are missing drivetrains, and it's completely up to the buyer to inspect each one before he can even think about buying.

I'm basically agreeing with you, in my roundabout way. And I like the advice.

 

[DnEbook]

I feel every domainer should at least have one site, even if its just a blog

 

[ThreeD]

.. the practice of saying "xxx,xxx" Google results is downright stupid. Simply put, the more results a domain has in Google, the higher the competition.

That proves you've taken the step from domainer to dev The average domainer likes big numbers and most of them don't realize when these numbers work against them. The google "search results" is a great example of that. (Note, we're not talking google exact keyword search results using the adsense keyword tool!)

If you're serious about making good money in the domain industry today (that goes for 90% of the people in the business) it should be all about developing sites. Why? Because all the top domains are long gone. I should probably mention that "good money" is not a $5 flip. Good money comes with sites that have good ranking + PR, keyword rich content, a solid # of backlinks etc.

Anyways, that's just my two cents. Been around for more than just a while myself and I've seen the changes that have taken place over the years.

Great post sashas, rep added!

 

[mwzd]

Having come into domaining from the other side of the divide, development, I'll offer a counterview, even though in essence what sashas has said is absolutely correct.

Not everyone can develop or is willing to learn. Though domaining as we see on the boards is probably not the best way to earn a decent revenue from domains, it allows a lot of smaller players a method to make a decent return from their investments which will far outstrip any other method they might know.

Also, even w/ development and substantial content, its not easy for people to even make $10/mo from a website, let alone $10/day - I know how tough that is and how much time it does take to reach the $10/day figure. Specially when adsense pays differential commissions to people from different locations. What might earn you 25c / click, might only earn me 1c for the same click. Sucks, but thats the way it is.

 

[tristanperry]

What sashas is referring to is just micro niche development. It's nothing new. It's getting more popular over at places like WarriorForum.com though. It's basically developing a mini-site around a bunch of low-competition keywords. Then having a good template which gives pretty good (low-mid xx%) AdSense CTRs. It's basically "mini-site development" as domainers know it... but with good keyword research before picking the domain since it's the keyword which matters, not the content or mini-site design. Traffic (which comes from the SEs which is based on a good keyword) is what's important.

Anywhoo, I know what you are saying and I agree with you in that micro niche development is a very good way to generate low $x per day revenue (per site) with a relatively small amount of work. Not all sites (even ones with good, solid keyword research) make low $x per day revenue though. But the idea is a good one for sure.

But remember that not everyone can develop, plus you seem to be saying that there's no profit in domaining.

Whilst I'm a good developer and am also into micro niche development, my biggest ROIs have still been from domaining.

There's still plently of money to be made from domaining. Just not as easily via hand regges.

That's why there's more rich domainers than rich micro niche marketers. I think that domaining is still easier to make a good ROI, but certainly micro niche development is a little easier to get into.

It's all about what works for individual people though. For some, domaining is best for them. For others, development is the way to do.

Domainers certainly aren't "delusional", though - such a statement seems silly since, as above, it's easier to make great profit with domaining.

To quantify this statement. My biggest domaining ROI was 650% in 3 weeks (crudely extrapolating that'd be over 11,000% ROI in a year; obviously I couldn't do that every 3 weeks, though!)

With micro niche development, my biggest ROI is a hand-regged .com which now gets me an average of £0.75 per day - which would be 5,375% ROI in a year.

Assuming my maths is correct there, I've still been able to make bigger profits from domaining. So I do think that your post is a little anti-domainer, but I do agree that MND has potential.



---------- Post added at 10:27 AM ---------- Previous post was at 10:09 AM ----------

So Sashas, what can you tell us about turning our dead domains to $10/day. What have you learned which we can emulate? This is a serious, not tongue in cheek question

It isn't that easy.

Micro niche marketing starts with researching for good, solid keywords.

This is the most important step.

You need to choose a good 2-4 word keyword domain. That keyword should be getting between (lets say) 3k to 8k exact monthly searches (which can be checked via Google Keywords Tool) AND have low competition - meaning when you search Google for the keyword, it should be easy to get towards the top of Google.

Obviously a keyword domain which has:

1) A low amount of searches

and/or

3) High competition

Wouldn't be worth it since the traffic potential just wouldn't be there.

Micro niche development starts with the right keyword and domain.

I'd say the person who bought micro niche development into the mainstream is a guy from WarriorForum.com called John or 'xFactor':

6 Months Later: $300 Daily w/Adsense (Lessons Learned)

Mods, apologies if that link isn't allowed. Please edit it out and allow members to PM me for the link instead

 

[MicroGuy]

Being delusional is a gift. :blink:

It beats the pants off being sane and realistic. Some of the happiest, most successful people in the World are delusional, take David Letterman for example. He's totally insane yet able to show up for work each and every day and make big $$$$.

Now who wants to buy vegasrooms.us. Taking offers in the low $xx,xxx range. Lol.

 

[Billy!]

You just never know, someone could bite, I have sold some high priced names here before at prices that may look to much to most domainers, but a good price to others.

I've been away from active buying for quite some time now. I've been busy learning development and trying to make money off my "dead" domains.

Having developed some domains and taken them to $10/day from $0/year, I can say that I have gathered some knowledge about domains, and development.

A good domain name is a gem of a thing to have when you start off development.

But honestly, the domains that I've seen being sold here, and the prices people are asking for them are absolutely ridiculous. Thread after thread has no bids, with prices falling from $1000 to $100 within a span of two days until a final, desperate call for "$50 BIN, last price! Hurry!" sinks the thread. It's clear to me that domains, particularly at the ridiculous prices people are asking for them in the forums, aren't selling.

These prices are not even end user prices. They are beyond end user prices.

I'm not talking of highly brandable, or mega-keyword domains that can be developed into massive web properties, or can attract xxx,xxx monthly traffic. I'm talking of 3-4 word domains in micro niches that won't get more than 500 visitors a month even if you managed to get it ranked no.1 on Google. These 500 visitors would probably make me $5-10/month. If I have to pay $600 for a domain like that, it would take me 5 years to make a return on my investment. Even if that was a viable business choice (it isn't), domainers tend to forget that sites in most micro niches don't stay on top of Google for even 1 year, let alone 5.

I think every domainer ought to try his hand at development to really understand the value of domain names. Thread after thread resulting in no sales should have been enough of a wake up call, but it seems to me that not enough people are really listening.

Oh and one more thing. Although I've been guilty of doing it too, the practice of saying "xxx,xxx" Google results is downright stupid. Simply put, the more results a domain has in Google, the higher the competition. What would make a domain more attractive to me would be LOW Google results, not high, because it is damn easy to rank when you have 5000 competing pages as compared to 500,000

So sellers, before you sell a domain and beam with pride that your little pet has 1 million Google results (with quotes!), maybe try and understand that higher Google results is actually a deterrent. High numbers in the Google Adwords tool are certainly very, very attractive, but search results aren't. The ideal domain is one that has high searches per month as per the Adwords tool, but low competing pages in Google.

 

[kev]

Ive recently got into development - mainly e-commerce. Selling sport clothing/fashion brands. One sale a day makes double the revenue that Id make on a $10 a day adsense site. Plus its a lot more fun receiving products and sending them out to your customers.

Just something else to consider :imho:

 

[InsanerDomainer]

Being delusional is a gift. :blink:

It beats the pants off being sane and realistic. Some of the happiest, most successful people in the World are delusional, take David Letterman for example. He's totally insane yet able to show up for work each and every day and make big $$$$.

Now who wants to buy vegasrooms.us. Taking offers in the low $xx,xxx range. Lol.

Good point. You can't make big bucks doing things "the right way", because then you're just doing the same thing everybody else is doing.

But I think there's a lot of wisdom on this forum. I just cherry pick the bits that make sense or the bits that seem like MAD GENIUS. :cy:

 

[Ross]

Oh and one more thing. Although I've been guilty of doing it too, the practice of saying "xxx,xxx" Google results is downright stupid. Simply put, the more results a domain has in Google, the higher the competition. What would make a domain more attractive to me would be LOW Google results, not high, because it is damn easy to rank when you have 5000 competing pages as compared to 500,000

Yes i agree that saying that as a selling point is stupid and anyone that knows domains will just brush it away with a nasty look on their face. Although one thing that signifies a niche is the search results. Obviously a keyword that produces millions of google results might be a crowded one but it obviously generates quite a bit of money, why else would there be so many pages? This is one of the first things you learn in affiliate marketing, keyword research.

So if you can secure a keyword domain in that "big" niche then it would be pretty easy to dominate the searches based on your site building techniques and explanation of how you build your sites. Take Candy.com for example. Yes they are not on page one of the results yet and i know they are a business and not just a domain name but they are proving that a GREAT domain helps. They are on page 2 by the way and their site was created this year.

So depending on what you are doing with the domain name is obviously going to correlate to how much you pay for the domain name. Obviously the people promoting the "crap" around here are overpricing their domains way over value but it really comes down to, you never know what people are going to pay. I sold a package of niche "resort" 2-3 word domains for a hefty price through this forum. The domains were horrible in my opinion but the new owner developed them right away and is now gaining quite a bit of traffic through that network.

 

[akcampbell]

There is alot of truth in what Sashas says. However, offering your domain at a high price and then cutting it is a logical way to sell. If you asked a group of enthusiasts to value a domain you would get a bell curve distribution of values. Therefore is doesn't necessarily make sense to offer it at the price most people would come up with, you should offer it at the price only one person is willing to pay. A good way of finding that price is to start high and work down. That's no delusional, it's just a selling strategy.

One good example of that strategy in action on NamePros was when one of the biggest .pro domainers, Vincent Liao, sold off his .pro collection. He started the sale thread at $8,000 each and dropped the price gradually. I paid $3,000 for Studio.pro, that's far more than anybody on NP would have paid pay but I wanted the domain and was willing to pay that rather than risk losing it. Vincent cut the prices several times more to $800 at which point I bought Diamond.pro. The domains didn't start selling fast until the price fell to $300. If Vincent had started the sale at $300 each, it would have cost him money, so it was better to start at $8,000 and cut the price.

Also, on the topic of returns, if you buy a domain for $600 and make $120 per year that's a 20% return on your capital which is relatively high. The present value of the $120 cash inflow per year into perpetuity is $2,400 assuming a 5% discount rate and less the $600 initial outlay gives a net present value of $1,800. That means that over time you are tripling your investment and that's assuming a discount factor over and above the current level of inflation and real falls in the cash inflow of $120 because it's becoming less and less valuable over time. I understand that there is some work to be done to make the $120 per year but if you buy a property, you might have to renovate it before renting it out at yield of 7%-8%.

The underlying dynamic of domaining is illiquidity and a very wide distribution of valuation opinion. Hence delusional pricing, at least at the outset, is a logical selling strategy. You may need to hold 100 domains to sell 1 per year, so you have to sell that 1 at an end user price or above otherwise you won't cover your reg fees. That's the pressure domainers are under, they don't necessarily value their domains at a price a minisite developer can get their full investment back on in 2-3 years.

 

[Jaco]

"Domainers" are indeed hilariously delusional. That's a large part of the reason I rarely transact with small-fry "domainers" anymore, save for the one-off purchase of something I need.

When I buy a domain, I predicate my entire decision on one of three things.

1) Earnings Potential
2) Earnings Potential
3) Earnings Potential

Assessing forward earnings potential calls on a confluence of skill that, I'm convinced, cannot be 'taught' and it goes WAAAAAAAAAAAAAAAAAAAAAAAAAAAAY beyond looking at search volume, competition and cpc. I don't give away any secrets and most people I know who succeed at this don't either, but safe to say, there's a whole lot more hashing out the underlying value of a name platform it than whatever volume and cpc is extant in the relevant keywords.

Excluding domains which are outright garbage, there is another category of lucid, desirable domains which I've come to term as 'hubris domains'. These are domains which have very little commercial viability or earnings potential, but are "impressive" in that they come straight from the old days when you could register names like Giraffes.com or any given LLL.com. Domainers transact in these domains almost as collectibles, in spite of the fact that they have very little value to business and commerce- business and commerce being the arena that puts money in your pocket. A hubris domain might cost 10X or 20X more than a name that has 10X superior earning potential...

As an aside, you people should feel blessed that Sashas made this post and was kind enough to actually follow it up with completely accurate advice for the strategy he's employing. Everything he said is 100% correct and the strategy he follows is one of the few left where "anyone can profit" , even in a cratering PPC world.

 

[wussadotcom]

Even if that was a viable business choice (it isn't), domainers tend to forget that sites in most micro niches don't stay on top of Google for even 1 year, let alone 5.

Was this proved? Or maybe from experience? Thanks

 

[tristanperry]

Was this proved? Or maybe from experience? Thanks

Domains, without fresh backlinks, will tend to fall down the rankings yes.

Of course, it can need as little as one new backlink per week (or fortnight, etc) to keep at the top (depending on the keyword, of course)

 

[bmugford]

Many domainers are delusional, I will agree with that. However I know plenty that are very skilled. The big money in domains is end users.

Flipping domains to other domainers is not the best business model.

Brad