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How to build a portfolio of 100 decent .com domains

Labeled as discuss in gTLD Discussion started by meslam479, Aug 28, 2018.

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  1. meslam479

    meslam479 Established Member

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    I thought many times of start building decent .com domains when having enough capital in the future, but I always struggled with a math in my mind, which kill off the idea, thought sharing this math, and let's see what are experienced dominers opinion?

    let see, I want to build a portfolio of 100 decent .com domains, cost from high xxx to low xxxx with average accusation cost of $1000, will be acquired in a time frame of approximately 12 months, count for 8-9 domains each month.

    Number of domains 100
    total accusation cost $100,000
    STR of %2 with 5-10x profit from each single sale with average 7x that's mean each year, I would sell 2 domains for $7000, which mean I will recap $14,000 in the first year, £11,150 in the second year after subtracting renewal cost of around $8.5 for each of 100 domains plus $2000 to compensate for the 2 previously sold domains, without even expanding the portfolio.

    So in this math, I will be able to recap my investment in 9 years without profits and even after all that, commissions not included in this math, that's what I would not consider as a viable business model for me to do.
    What do you think? - Please share your opinions, correct my math if possible thanks.
     
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  2. stub

    stub Top Member PRO VIP ★★★★★★★★★★

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    I think it's almost impossible to build 100 quality domains in 1 year at an average of 8.5 domains a month. You only need to make 1 slip up with your domain choices and it's no longer 100%. It's possible, but highly unlikely. You'd need to be a genius picker of domains also. IMHO.

    Also without knowing your strategy of purchasing and selling, it's also very difficult to answer your question. Is it possible? Yes. Is it probably? Nope.

    Does that answer you question? Well... Yes.... and No :)
     
  3. WatchDogue

    WatchDogue Active Member VIP

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    Just some thoughts re the overall plan as I understand your model, not soliciting your responses per se.

    Do you have a particular domain niche in mind and, enough experience in that niche to have faith in your model;

    Are you planning to speculate / invest " across the boards " wherever you find domains you deem decent and worthy of purchase;

    Are you reasonably certain you can market and sell the percentage of domains you require sold to pursue your sales model;

    Are you able to build that portfolio and maintain same should sales not conform to the model;

    Is the plan based on an existing successful plan;

    Would a " reduced / modified " trial plan for a year or so be advisable?

    Again, just thoughts re the proposed acquisition plan.
     
    Last edited: Aug 28, 2018
  4. meslam479

    meslam479 Established Member

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    it's all speculations, all my profits come from ccTLDs, so I don't consider myself as an expert in .com domains, also the entry barrier to .com domains is very high compared to other domain extensions and ccTLDs, but as I said before, when I reach adequate funds and good insight into the .com market, the next thing should be a good math that suit my investment goals. I will give you an example of my typical investment goal when I start catching or hand registering 100 domains in other extensions, it's very possible to recap my investment with slight profit in the first sale, now when I think about that in .com it's total failure O_o
     
    Last edited: Aug 28, 2018
  5. DeliDomains

    DeliDomains Oswin

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    Domaining is not always a number game, it is how you understand the subject and master the art of buying and selling.
    Building a portfolio of 100 good domains can make you some money or can get you bankrupt as well.
    But given the chance, a single domain in the right niche at the right time can get you returns unimaginable.
     
  6. biggie

    biggie Top Member VIP ★★★★★★★★★★

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    say you worked it backwards...…….

    used to have bout 2000 names in 2006, now down to around 300 or less

    12 years, still refining and making progress, finding less "unsellables", is best for the rest.

    even at that pace, in a domainers race to chase.... the drop and wait for the sale

    to do all of that in 12 months, not impossible, but would be hard as hell.

    Good Luck, though

    imo….
     
  7. stub

    stub Top Member PRO VIP ★★★★★★★★★★

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    I think another question to answer would be do you have the $100k to burn? OK. It's probably that you won't burn thru it all. Even though it's possible. But the follow up question might well be, at what point do you pull the plug? Suppose you don't sell any of the 8.5x6=51 domains at $7k each, in the first six months. Do you abandon the plan or keep investing. Of course there are always bargains to be had. But most domains don't jump from $1k to $7k overnight. It can take years.
     
    Last edited: Aug 29, 2018
  8. bmugford

    bmugford www.DataCube.com PRO ICA Member VIP ★★★★★★★★★★

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    It would be very hard to start investing in the market today. .COM auction prices have become far more competitive. With GDPR it is also harder to find direct domains to buy.

    End user demand has been pretty stable, it is just re-seller prices that have gone up.
    The average name that is going for say $1K now was probably going for $100-$350 (5) years ago.
    The math makes a lot more sense at those prices.

    I am still buying domains, but in general I am not really chasing names right now. Many are going for prices well above what I think makes sense financially. I don't see the potential ROI in general at most of these prices. If you have a 1-2% average turnover the math does not make sense.

    Brad
     
    Last edited: Aug 29, 2018
  9. Shuttlepro

    Shuttlepro Active Member VIP

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    Numbers guys can do it but guys like Rick Schwartz that hold them for ages until a mega offer comes also do it. Depends on which path you take, but numbers aren't always numero uno. Do a mix...test the waters...just don't go all in and hand reg 1000 names on some $2 special. Those fees will bite you in the @zz!
     
    Last edited: Aug 29, 2018
  10. urlurl

    urlurl Active Member VIP

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    it took me a year to find 150 quality names that fit my style, budget and have potential to sell....

    so to pick up 100 (quality) names in a quick short term is inadvisable and unrealistic....

    you are more likely to over spend or buy less quality names to fill the quota.

    my advice is take your time and get a feel for the market and the names.

    unless you buy a portfolio :)
     
    Last edited: Aug 29, 2018
  11. Foggy

    Foggy Upgraded Member Blue Account

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    No matter how much research you do, you will end up keeping five or six of your original 100 four or five years down the road, when your instincts become more finely honed.
     
  12. .X.

    .X. NameFeature.com Gold Account VIP ★★★★★★★★★★

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    Take the advice of the experienced domainers that have given you advice in this thread, It will save you a lot of time, money and heartache.

    First learn what domaing is actually about, what it has to offer with the different niches and ect. don't send PMs to people asking them to help you, help yourself, NamePros has years of indexed information that you can read and learn from. Take the time to learn the industry, you should be in no rush to attain 100 decent .coms right now, not if you have long term goals to stay within the industry.

    Best of luck to you.
     
  13. BrandVenue

    BrandVenue BrandVenue.com

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    I did similar thing but with much lower budget. I started a side project last year with $10k budget, bought 40-50 names with average price of $200-$300. So far I've managed to increase the inventory size to 100+ names with the profits of domains sold from this inventory and also withdrawn initial $10k investments.

    problem is domain name price at expiry auction has gone up significantly, a $200-$300 worth domain name last year now going to cost you $400-$500+ so you will end up overpaying.

    if I were to start with $100k budget today I wouldn't buy 100 names with average $1k/name. Rather I would aim for 10 X $10k name or 20 X $5k name or 5 X $20K name. CVCV , dictionary word, LLL will get my highest priority.

    At 6X profit if one $10k domain sells for $60k you will get 50% of your investments back or if one $20k domain sell for $120k you will get your original $100k back and you have $100k worth of inventory.

    This will take time and patience but ultimately you should able to grow your business and make money.
     
  14. meslam479

    meslam479 Established Member

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    Thanks, guys for the very useful information.

    I think that's the real treasure (y) but it will need extensive research with high experience for sure.


    thanks, that's a very good advice focus on high-quality names with high probability to sell seems a very healthy selection (y).

    @biggie @stub @bmugford @Shuttlepro @urlurl @Foggy @.X.

    very good points (y)

    1.building portfolio of high-quality names is not impossible but would be hard as hell.
    2.the re-seller prices have gone up and the possibility of overpaying is very high.
    3.it may take ages until a mega offer comes
    4.the possibility of overspend or buy fewer quality names in 12 months plan is very high.
    5.focusing in long-term goals is the way to stay within the industry.
    6.quality over quantity :xf.smile:.
     
    Last edited: Aug 29, 2018
  15. Kate

    Kate Domainosaurus Rex VIP ★★★★★★★★★★

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    100 is an arbitrary number.
    I would start small. Buy one domain, but a good one that leaves room for a profit. Sell it.
    Lather, rinse repeat. Reinvest. Scale up. Soon you'll have 100 domains and probably more. But 100 is a sweet number.
    Then you might want to scale down, trim down the portfolio, buy fewer domains but increase quality.

    It helps if you have money to invest, and you know what to buy. If you don't you could waste your money.

    Your math may look bleak, but I think domaining is a patience game and a long-term investment. I am willing to wait 9 years and even more...
     
  16. AbdulBasit.com

    AbdulBasit.com DomainsWeb.com AbdulBasit.com PRO VIP ★★★★★★★★★★

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    It would be interesting to know how many domains you currently own?
    Also if you think 1-2% average turnover is not enough so how much % turnover yearly make sense and how much % turnover you have it yearly?

    Thanks in advance!
     
  17. biggie

    biggie Top Member VIP ★★★★★★★★★★

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    not to answer for @bmugford , but the average turnover prolly depends on number of domains in portfolio.

    @ 100 domains and average renewal being $10, one would only have to sell one or two domains above $1k, to pay renewals for the rest.

    now with 99 names, 1% becomes less than one sale @1k, to cover renewals for 98 names.

    at this point, you may be sustaining the portfolio -
    but have yet to recover the acquisition cost to build it.

    and... if you want to continue domaining, then -
    sooner or later, you'll have to buy more domains.

    this is where the effect of rising costs and more competition in the market may affect the budget.

    so, you could sell out and get your roi from portfolio or put mo money in the budget to keep going.

    that's a very simplified scenario, excluding some if's and then's, to be taken only as an example.

    but if one has more than a few thousand names, just imagine how they would have to scale up.

    :)

    imo…..
     
    Last edited: Aug 30, 2018
  18. AbdulBasit.com

    AbdulBasit.com DomainsWeb.com AbdulBasit.com PRO VIP ★★★★★★★★★★

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    Rightly said and I agree with you.
    That's why I asked him how many domains does he own and what ideal % he thinks is good enough and acceptable for him... Just to have an idea from another successful domainer. I'm sure he has few thousand of domains.
     
  19. bmugford

    bmugford www.DataCube.com PRO ICA Member VIP ★★★★★★★★★★

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    I own a little under 6,000 domains. In general I would say my average turnover is around 2% give or take.

    Though in fairness I don't really make the max effort when it comes to sales. I have a limited amount of my domains actually priced and listed on venues like GD and Afternic. Most are sold via contact forms on my landers.

    That turnover rate is fine if you buy the right domains at the right prices. The quality of domains you could buy several years ago vs today for the same prices is the issue.

    I am seeing very average domains sell for $500 - $1,000 in the market now re-seller. Ones that will likely not sell in a reasonable time period, for a high enough price, for that turnover rate to make sense.

    Brad
     
    Last edited: Aug 30, 2018
  20. AbdulBasit.com

    AbdulBasit.com DomainsWeb.com AbdulBasit.com PRO VIP ★★★★★★★★★★

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    Thanks Brand!
    That's very impressive number of domains and the quality can be seen on your site (y)

    Very well said about the past and current market situations which has changed significantly in prices for the last few years.
     

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