NameSilo

How much would I need to invest to consider domaining seriously?

Labeled as question in General Domain Discussion started by Lord Antares, Nov 24, 2018.

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  1. Federer

    Federer Top Member VIP ★★★★★★★★★★

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    If you have an eagle eye for domains and know what you are doing, you can apply this formula:

    Investment x 2.5 = profits (after investment/acquisition costs and sales commissions).
    Ex. investing $50K in Jan 2018, would generate $125,000 in profits at end of Dec 2018.

    Even Investment x 2 = profits is classed as an excellent ROI.

    If you invest $5K-$6K at the start of the year, you can probably expect to make around $20K in passive sales over the course of a year - if you're buying the right types of names that appeal to end buyers.
     
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  2. Jv1999

    Jv1999 Spamming Exo: Dark Merc of the Exo-Tower VIP

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    Federer. Thank you for this. Your information is always very valuable.

    But it sort of makes me discouraged lol. Why is it only 2.5x? I hope you're only talking about short-term outbound domains (like GEO).

    Because, I had the impression that if you acquire good domains, like if you had RedZone.com for $100, then you could sail it for $3,000 - $7,000 within 10 years. That said, if you spend $6,000 acquiring similar domains, that comes out to 60 RedZones... and 3,000 x 60 x 50% (conservatively saying that you'll most likely sell minimum half of these names within 10 years) = $90,000.

    Anyway, I was just wondering... because then it would be sad if you spend $6,000 acquiring 60 RedZones and then selling only 1 or 2 of them within 10 years.

    But I'm assuming you mean that you're only going to sell 1 or 2 RedZones within the first year, which would actually only be 2.5x if you sail 2 (which would be 3.3% of your 60-domain portfolio) and for 6k each. . .. That's gonna be hard man lol. whoah.
     
  3. Federer

    Federer Top Member VIP ★★★★★★★★★★

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    The formula is based on investments spent/profits generated over the course of just any given year - and actually represents an excellent return on investment.

    Most large portfolio owners (BuyDomains, HugeDomains) sell between 1.5-2.5% per year in the $1.500-$2.500 sweet spot.

    Just a quick "very wide" example:

    1M domains (if at registration fee): cost $8M.
    15,000 sales/year (1.5% of 1M) at a reasonable $1750 = $26,250,000.
    Minus initial investment ($8M)
    = $18,250,000 = investment x 2.28 = profits (no commissions to pay in this case)

    There are way too many variables, conditions and circumstances to come up with a global formula. Each investor has different pricing/business models. But if you can come fairly close to doubling your investment (profit-wise) in the course of a year, and repeat - you're doing amazingly well. Better than 90% of domain investors - the majority are in the red (and don't keep track).
     
    Last edited: Nov 27, 2018
  4. Jv1999

    Jv1999 Spamming Exo: Dark Merc of the Exo-Tower VIP

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    Thanks so much for the clarification. I guess you're right that the 10-year stats is too hard to foresee...

    But does this 2x - 2.5x rule apply to smaller portfolios as well? What if you spend only $2,000 on good domains and acquire 20. Will you really make $4,000 by next December?

    Thanks so much :)
     
  5. Federer

    Federer Top Member VIP ★★★★★★★★★★

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    This formula does not apply to higher-range/premium domains. We're talking here about average, mediocre brandcentric .COM that can be acquired for under $8-$10 each.
     
  6. Jv1999

    Jv1999 Spamming Exo: Dark Merc of the Exo-Tower VIP

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    Oh okay :) thanks so much federer ! thank you for all the info you've provided us over the years!
     
  7. viniproject09

    viniproject09 Established Member

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    Once you are in business just keep rotating the value. Make sure you focus on incoming results not to many experiments.
     
  8. Want2learn

    Want2learn Top Member VIP

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    Dont quit your day job and find another hobby
     
  9. imadoer

    imadoer Top Member PRO VIP

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    Get the knowledge! then you can figure out what you need to succeed.
     
  10. Vivienne Mcgregor

    Vivienne Mcgregor New Member

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    42,800,000 USD
     
  11. JB Lions

    JB Lions Top Member VIP

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    I think too many times people are looking for some A B C formula (endless threads asking about the same thing), then thinking if they follow that, they'll get those exact results. That's just not how things work. Too many variables as people have pointed out. You can have 2 domainers both having an average of 500 domains a year, but one can have much better quality. You can try to estimate how much you will sell in a year, and 1 big sale can change that. Figure out what works for you, trial and error.
     
  12. AndrewSSD

    AndrewSSD Web Hosting Owner

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    Before you can do this easier today it needs $$ but there is still a chance if you smart enough to make the success with domain name.
     
  13. A partner and I did this for one venture in 2015. We invested about $5,500 each. Reinvested the profits and 2 years later it is at $1.5k per month. Over $26k in sales last year.
     
  14. Lord Antares

    Lord Antares Top Member VIP

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