question-answered I have $500 to invest in domains. Can I turn this into a $200-$300 per month income?

[twiki]

I just got this question from a fellow beginner domainer here. Good one, legitimate question. I believe not everyone here on NP might know the answer to this question, so here it is:

Absolutely not.

( Edit: or at least not at first, unless you're really lucky OR very good at it = native talent, OR you put a lot of sweat in, which is likely not happening for 95% of beginner domainers especially due to the odds at stake )

Domain investment is not a get rich quick scheme. And especially when starting up, you need time and efforts to get to some profit.

Also, 95% of people starting with domain investment will never make a single $ profit out of that (or maybe even more than 95%, I'd say that 99% non-profit-ers is a more appropiate percentage).

Anyway. If you're still unclear, here's some math that would explain it:


With $500, the best number of domains you can get for such amount are going to be handregs. Either drops or fresh regs. (Although you can theoretically spend $500 on just one good domain at auctions; but as a beginner, the truth is chances are that won't be a good domain but junk - because you lack experience.)

So let's say you hand reg or get some drops. You can register say 50-60 .com domains for one year (or a bit more depending on registrar and offers, but anyway). I'm gonna take the 50 names number as it's more easy to calculate.


The average sales ratio in our field is 1...2%. As a beginner, chances are you will be on the 1% side... or maybe even less. Will use the 1% ratio in this calculation below.

Let's say you register 50 .com domains with this $500 (note: per year). In this case, as per the ratio above, you have a chance at any profit whatsoever only if you are going to sell that domain ABOVE $1K. Then you subtract $500 x 2 = $1K from the sale (the cost of regs over the 2 years span), and here you have just a few hundreds profit - if the domain sells above $1K. But side note, renewals are usually more expensive so you might spend a bit more on the second year if you renew your names.

Say you are able to sell one domain in 2 years (again at the standard 1% ratio) for $1500.

This means you just earned $500 (over 2 years), which goes to an earning of ~$20 per month on average from that investment (you need to keep that $500 locked in for 2 years). Therefore you will still need to continue keeping that $500 invested in order to continue making $20 per month. (Or a bit more if you're good, but likely nothing in a larger order of magnitude.)

( Later edit: And if you want to grow your portfolio naturally, you might not be able to take any money home during the first years, as each of the $ you make will have to go into reinvestment. )

Not what you expected, may I ask?

But wait, there's more.

Since most beginners sell domains at xxx range, not at 4-fig (due to lack of experience and lower quality portfolio) making this 4-fig sale is even tougher; although the sales ratio increases somewhat as the price lowers. The lower the price, the bigger the renewal cost pressure. Which puts you in a risky terrain.

That's if you decide to stick with .coms. And I will repeat here the advice I got when beginning: If you want to start with domain investing, get .coms at first. Chances are you can have far less success with other TLDs although they might be easier to get. (Why: Because sales ratio decreases far below 1%, like 0.1% or even much less). I listened to this advice when starting and it really helped me get successful with domains. It really made a difference for me, listening to more seasoned domainers back then.

The gTLD path: Alternatively you can of course get, say some .xyz for cheap ($1 or less) or any other ngTLD, but I would not advise beginners to do that.

Again you probably won't know what you're doing and your xyz sales will not match the ones of top sellers here. And the same for other gTLDs not just xyz which I picked only as an example. Now since the sales ratio is terrible for most noncoms, unless you know exactly in advance who would buy that domain from you and why, you're going to be at a loss overall with gTLDs.

I need to also share with you here the results I got when starting with domains, a few years ago.

I banked a $14K loss in my first year starting with domains (spent $41K and made back $27k). But having business experience behind, I knew how to make this work.

I almost made it to zero in the second year ( still some minor loss) and I only banked a profit in the third year. Therefore, for most of you beginner domainers starting just now, I would not expect things to be any easier. It's simply not how domaining works. Yes there are some super investors here that show amazing sales, but those are few and talented, and maybe lucky. So i would not bet on similar results if I would be in the starting position.

Again, domaining is anything but a quick get rich scheme. It's hard work, financial risk and strained nerves when you wait months and nothing sells; or when you see your capital dwindling in the first years because you banked a loss. But if you're good at it, and if you put the sweat in you can be successful - like in any other field. Or not. It's entirely up to you to mitigate these rather tough odds in our field.

Final note: IMPORTANT: Please also note that economical tsunami is coming. It's already born and has just to reach us. It might be the worst moment to start now with domains.

Or not - if you are a super talent, so do you feel like you are one...? Otherwise, for most of us here (including myself) there's no such thing. I personally also have no talent whatsoever at domains BTW - all my results come from sheer hard work and plenty of sweat, and putting/risking a lot of money in. I made my "talent" by working my b*tt out - so it's not talent, but experience.

Anyway, I hope my reality check here is not going to depress you cause that ain't the point.

But rather help you make that call, whether to get in the cold water... or not. Expecting easy, nah, that's not going to happen. Just be careful.

Good luck ahead, and happy domaining!

(edited for clarity)

 

[biggie]

Hi

i'd say it depends on the person, and what they already know that's true, about domains.

it's not impossible, but it could take some years until they have built a sustainable model.

with a combination of marginal return on sales and some ppc income... increased growth in both sectors could yield $$$ a month.

gotta be on a mission though...

imo...

 

[twiki]

Hi

i'd say it depends on the person, and what they already know that's true, about domains.

it's not impossible, but it could take some years until they have built a sustainable model.

with a combination of marginal return on sales and some ppc income... increased growth in both sectors could yield $$$ a month.

gotta be on a mission though...

imo...

True. But.

I've also said above if you read between the lines: It depends on a combination of factors, such as personal skills (talent?), money at hand to invest in, luck, the right timing (maybe not right now...?) and especially hard work. That above everything else, but coming with no guarantees though.

Anyone can of course get successful at domaining.

Most, unfortunately, wont.

(as per the statistics)

 

[1Darko]

@twiki you gave a very sound advice. If a beginner invests $500 the odds to make any profit in the first year are very slim. In fact a make even situation should be rated as a big success. The reality is that the majority of beginner attempts will result in a big loss or even total loss.
We have a lot of threads here on namepros with many advice for beginners how to invest to be successful.
However like @twiki mentioned - from time to time we see some talented person who's absolutely kicking ass and proves that there are different paths to success. Therefor never give up because you could be that person to prove us wrong .

 

[twiki]

@twiki you gave a very sound advice. If a beginner invests $500 the odds to make any profit in the first year are very slim. In fact a make even situation should be rated as a big success. The reality is that the majority of beginner attempts will result in a big loss or even total loss.
We have a lot of threads here on namepros with many advice for beginners how to invest to be successful.
However like @twiki mentioned - from time to time we see some talented person who's absolutely kicking ass and proves that there are different paths to success. Therefor never give up because you could be that person to prove us wrong .

Well said.

Note: Never give up, but be smart enough to know when it is finally time to give up.

( Coming from decades of life / business experience I have behind... Failure and giving up are also part of the process of becoming successful )

 

[Bob Hawkes]

Thanks for the detailed and well expressed post @twiki. I think this part is particularly important:

Again, domaining is anything but a quick get rich scheme. It's hard work, financial risk and strained nerves when you wait months and nothing sells; or when you see your capital dwindling in the first years because you banked a loss. But if you're good at it, and if you put the sweat in you can be successful - like in any other field. Or not. It's entirely up to you to mitigate these rather tough odds in our field.

Too many come in with unrealistic expectations.

It is also helpful to share your own details. You are one of the most regular sellers, and to share that the first year you lost money, even though lots of sales, and marginally lost in the second year, prepares people that they need to think long term and hard work unless they are very lucky.

Thanks again,

Bob

 

[twiki]

Thanks for the detailed and well expressed post @twiki. I think this part is particularly important:

Too many come in with unrealistic expectations.

It is also helpful to share your own details. You are one of the most regular sellers, and to share that the first year you lost money, even though lots of sales, and marginally lost in the second year, prepares people that they need to think long term and hard work unless they are very lucky.

Thanks again,

Bob

Indeed my point here was not to discourage but to bring the needed reality check to beginner domainers.

Thanks @Bob Hawkes for this great comment (as usual), and pointing out to the essence/ intent of my post here.

Note, I am indeed one of the regular sellers, I know that some are inspired by my sales. Well this info here might hopefully help set the right expectations for beginners, about not just what you can get out, but what you firstly need to put in in order to get the good out.

 

[PurpleMan]

The thread title asked a question and you ended up answering it yourself

Thanks for the well-written article.

 

[bmugford]

I just got this question from a fellow beginner domainer here. Good one, legitimate question. I believe not everyone here on NP might know the answer to this question, so here it is:

Absolutely not.

( Edit: or at least not at first, unless you're really lucky OR very good at it = native talent, OR you put a lot of sweat in, which is likely not happening for 95% of beginner domainers especially due to the odds at stake )

Domain investment is not a get rich quick scheme. And especially when starting up, you need time and efforts to get to some profit.

Also, 95% of people starting with domain investment will never make a single $ profit out of that (or maybe even more than 95%, I'd say that 99% non-profit-ers is a more appropiate percentage).

Anyway. If you're still unclear, here's some math that would explain it:


With $500, the best number of domains you can get for such amount are going to be handregs. Either drops or fresh regs. (Although you can theoretically spend $500 on just one good domain at auctions; but as a beginner, the truth is chances are that won't be a good domain but junk - because you lack experience.)

So let's say you hand reg or get some drops. You can register say 50-60 .com domains for one year (or a bit more depending on registrar and offers, but anyway). I'm gonna take the 50 names number as it's more easy to calculate.


The average sales ratio in our field is 1...2%. As a beginner, chances are you will be on the 1% side... or maybe even less. Will use the 1% ratio in this calculation below.

Let's say you register 50 .com domains with this $500 (note: per year). In this case, as per the ratio above, you have a chance at any profit whatsoever only if you are going to sell that domain ABOVE $1K. Then you subtract $500 x 2 = $1K from the sale (the cost of regs over the 2 years span), and here you have just a few hundreds profit - if the domain sells above $1K. But side note, renewals are usually more expensive so you might spend a bit more on the second year if you renew your names.

Say you are able to sell one domain in 2 years (again at the standard 1% ratio) for $1500.

This means you just earned $500 (over 2 years), which goes to an earning of ~$20 per month on average from that investment (you need to keep that $500 locked in for 2 years). Therefore you will still need to continue keeping that $500 invested in order to continue making $20 per month. (Or a bit more if you're good, but likely nothing in a larger order of magnitude.)

( Later edit: And if you want to grow your portfolio naturally, you might not be able to take any money home during the first years, as each of the $ you make will have to go into reinvestment. )

Not what you expected, may I ask?

But wait, there's more.

Since most beginners sell domains at xxx range, not at 4-fig (due to lack of experience and lower quality portfolio) making this 4-fig sale is even tougher; although the sales ratio increases somewhat as the price lowers. The lower the price, the bigger the renewal cost pressure. Which puts you in a risky terrain.

That's if you decide to stick with .coms. And I will repeat here the advice I got when beginning: If you want to start with domain investing, get .coms at first. Chances are you can have far less success with other TLDs although they might be easier to get. (Why: Because sales ratio decreases far below 1%, like 0.1% or even much less). I listened to this advice when starting and it really helped me get successful with domains. It really made a difference for me, listening to more seasoned domainers back then.

The gTLD path: Alternatively you can of course get, say some .xyz for cheap ($1 or less) or any other ngTLD, but I would not advise beginners to do that.

Again you probably won't know what you're doing and your xyz sales will not match the ones of top sellers here. And the same for other gTLDs not just xyz which I picked only as an example. Now since the sales ratio is terrible for most noncoms, unless you know exactly in advance who would buy that domain from you and why, you're going to be at a loss overall with gTLDs.

I need to also share with you here the results I got when starting with domains, a few years ago.

I banked a $14K loss in my first year starting with domains (spent $41K and made back $27k). But having business experience behind, I knew how to make this work.

I almost made it to zero in the second year ( still some minor loss) and I only banked a profit in the third year. Therefore, for most of you beginner domainers starting just now, I would not expect things to be any easier. It's simply not how domaining works. Yes there are some super investors here that show amazing sales, but those are few and talented, and maybe lucky. So i would not bet on similar results if I would be in the starting position.

Again, domaining is anything but a quick get rich scheme. It's hard work, financial risk and strained nerves when you wait months and nothing sells; or when you see your capital dwindling in the first years because you banked a loss. But if you're good at it, and if you put the sweat in you can be successful - like in any other field. Or not. It's entirely up to you to mitigate these rather tough odds in our field.

Final note: IMPORTANT: Please also note that economical tsunami is coming. It's already born and has just to reach us. It might be the worst moment to start now with domains.

Or not - if you are a super talent, so do you feel like you are one...? Otherwise, for most of us here (including myself) there's no such thing. I personally also have no talent whatsoever at domains BTW - all my results come from sheer hard work and plenty of sweat, and putting/risking a lot of money in. I made my "talent" by working my b*tt out - so it's not talent, but experience.

Anyway, I hope my reality check here is not going to depress you cause that ain't the point.

But rather help you make that call, whether to get in the cold water... or not. Expecting easy, nah, that's not going to happen. Just be careful.

Good luck ahead, and happy domaining!

(edited for clarity)

Yep, this is not some get rich quick field. It is a field with more competition now than ever.

Anyone can make a fluke sale. Building a business based on good decisions and steady sales over a long period of time is far more difficult.

To have a realistic chance at succeeding you need -

1.) Realistic expectations.

This is a slow burn field. Buy, sell, reinvest, repeat. Your portfolio generally grows in size and quality over time.
The more quality domains you have the more sales you make.

Even unicorns like @DNGear are not overnight sensations. She took a chance and put in the work and capital years ago, which is paying off today.

2.) The right attitude.

So many people enter this field with closed minds, thinking they already know it all. Maybe they had success in another field, or are just general know-it-alls. Either way, it doesn't work.

You need to be open minded, realize you don't know everything, and be willing to learn.

I have been in this field for a long time and learn something new every day.

3.) You need to bring something to the table.

This is competitive field with no easy template to follow. You need to bring the right skills and/or business model to succeed over time.

Capital and capital management is a big part of it. You need the ability to buy the domains you find.
You need a good eye to find quality domains in a competitive field.

There are other skills that can help like negotiation, networking, and many more.

Brad

 

[damance]

Yes you can with outbound but... only if you know how to do it

 

[twiki]

Yep, this is not some get rich quick field. It is a field with more competition now than ever.

Anyone can make a fluke sale. Building a business based on good decisions and steady sales over a long period of time is far more difficult.

To have a realistic chance at succeeding you need -

1.) Realistic expectations.

This is a slow burn field. Buy, sell, reinvest, repeat. Your portfolio generally grows in size and quality over time.
The more quality domains you have the more sales you make.

Even unicorns like @DNGear are not overnight sensations. She took a chance and put in the work and capital years ago, which is paying off today.

2.) The right attitude.

So many people enter this field with closed minds, thinking they already know it all. Maybe they had success in another field, or are just general know-it-alls. Either way, it doesn't work.

You need to be open minded, realize you don't know everything, and be willing to learn.

I have been in this field for a long time and learn something new every day.

3.) You need to bring something to the table.

This is competitive field with no easy template to follow. You need to bring the right skills and/or business model to succeed over time.

Capital and capital management is a big part of it. You need the ability to buy the domains you find.
You need a good eye to find quality domains in a competitive field.

There are other skills that can help like negotiation, networking, and many more.

Brad

Excellent comments as usual, Brad. I one can't have enough of your posts. Thanks a lot for the value.

I'd add just that you also need an angle, something you do well and others don't. An edge. Some detail that you figured and others not.

There is so much competition in the field, both at sales and buys but so much the latter, that without this edge, starting today and being like the average beginner out there is not going to work.

 

[twiki]

The thread title asked a question and you ended up answering it yourself

Thanks for the well-written article.

True, i selected answered from the start For some reason it felt more appropriate, but it's a discussion.

 

[anunt]

People on here keep saying that if you are a beginner you won’t most likely make any money with that $500.

I am saying even if you are a domain pro expert, you can’t make $200/month with that $500 investment.

Heck, I say get 100 domain expert pros that have been in the domain game for over 20+ years and none of you guys out of 100 domain pro experts will make $200/month with that $500 investment.

 

[bmugford]

People on here keep saying that if you are a beginner you won’t most likely make any money with that $500.

I am saying even if you are a domain pro expert, you can’t make $200/month with that $500 investment.

Heck, I say get 100 domain expert pros that have been in the domain game for over 20+ years and none of you guys out of 100 domain pro experts will make $200/month with that $500 investment.

It would not be fast or predicable. It would have to scale over time.

There is no free lunch. If it was that easy everyone would do it.

Brad

 

[twiki]

People on here keep saying that if you are a beginner you won’t most likely make any money with that $500.

I am saying even if you are a domain pro expert, you can’t make $200/month with that $500 investment.

Heck, I say get 100 domain expert pros that have been in the domain game for over 20+ years and none of you guys out of 100 domain pro experts will make $200/month with that $500 investment.

There are enough top domainers here who can meet that performance (making 6x the investment amount in earnings and 5x in ROI approximately).

One of them is definitely @Lox who does no blanket investment like many of us do. He specialized in cherry picking special domains, doing a lot of research over each, waiting for the right moment then sell the domain to the exact targeted buyer for a solid 5-fig etc.

While I don't know exactly how many domains he has (never asked), the sheer ROI he's having definitely provides that.

Also any top domainers with old, strong domains like single-words definitely can meet this performance.

@DNGear (Swetha) also has a stellar performance and goes way past this criteria.

Also Abdul Basit has a limited amount of highly valuable domains, and is likely meeting this level of performance.

So you are wrong, there are many of the top investors who have this portfolio performance. Of course all have larger portfolios but if we take the % deriving from my example (5 x ROI per annum) then yes there is a number of domainers having that level of performance.

Edit: Need to mention though that anyone starting today might have tremendous difficulties reaching such performance, if ever. These solid top domainer portfolios have been generally acquired many years ago in a good proportion, and are already seasoned and have grown in price a lot until today.

 

[VadimK]

The answer to this question is very simple.
If you are a beginner - you can't.
If you are an experienced domainer (maybe you decide to run an experiment or creating a portfolio for somebody else from the scratch under this condition) - you can (doesn't mean you necessarily will, but you can).

 

[Lox]

Let's say you register 50 .com domains with this $500 (note: per year). In this case,

... in this case, the following % of people qualify for Hope-Domain Flippers

--------------
The first step:

Let's say that you want to know something about the car industry. And, there is a good chance that you will discover something new that you had never thought would interest you. (FlyCarLab .com announced plans to bring a new tech ... & without media coverage/attention. Look into each competition company and see what investment they take to keep up business /innovations running.)

Let's say you register 5 FlyLLLLL .com domains with this $500 (note: 10 years). In this case, you're investor - doing something or thinking in a way that will lead to success.

Let's say you know something about the eCars - f.e. Tesla... And you think there's a chance for FlyTesla com ... - accept that your thinking and knowledge needs adjusting.

Regards

Thx @twiki

 

[sellian]

It could happen if you handreg 55 unicorns and you sell 1 per year (2% STR) at around 5k$ each.

The likelihood of this happening is close to zero though. Especially if you are a beginner.

Technically, one can also play the lottery once and win it too.

 

[VaibhavA]

Well, I think the person who asked the question, "Can I turn 500$ investment into a $200-$300 per month income through domaining?" is asking if he could take this as a business opportunity and comparing it to trading in stocks or crypto or other businesses.

Its not the same thing in domaining. It takes time to mature and has a steep learning curve.

Its not like you have identified a few good coin/stock and you can do as much buying and selling in them.

Also, when I started domaining back in 2016, times were different. One could easily get reasonably good parking names, seo names, brandable domains, 2 word domains, 5 letter domains in closeouts.

Nowadays, similar quality domains are going in XXX range.

So, today a beginner would need anywhere in mid XXXX to start with to reach a decent level of income and about 5 years to reach a certain level of expertise in domaining.

 

[Creative Domainer]

@twiki
It's good that you've done a very careful analysis. However, you should not end here, but also tell how to invest these $ 500? So that the rest of the learners are not disappointed. There are many examples of investors who started with low investment and gradually got stronger.

 

[twiki]

@twiki
It's good that you've done a very careful analysis. However, you should not end here, but also tell how to invest these $ 500? So that the rest of the learners are not disappointed. There are many examples of investors who started with low investment and gradually got stronger.

There are so many paths in domaining. I know my path. I do not know all paths.

I've started based on volume. Obviously my own path can't be replicated with $500.

For these low capital beginners, I'd suggest the following. Not an exhaustive list, not applicable to all domain investment styles, it is just my view.

- Invest only in .COMs at first.

- First off read NP from start to end.

- Do a LOT of research before buying any domain. You can use ExpiredDomains.net to find domains and filter them.

- When you think you have understood what you need to do, buy some names. You need to have some skin in the game in order to learn. But don't invest a lot at once. Use a spear, not a net.

- I'd focus on expired domains and also on GoDaddy closeouts at first. Download the $5 closeouts list from GD, sort by value descending, look at short ones.

- Buy short domains at first. 2 words max. Don't ever buy any 3-words or more.

- 1-word modified .coms are great if you know what to pick.

- List on Afternic and park on Dan or whatever else marketplace. Alternatively also list on Sedo. I only use Afternic today, all my landers point there but that's a different story. Pick what you like for lander.

- Ask for appraisals here on NP in the appraisals section. Alternatively try the automated tools (Godaddy, Nameworth, Saw, Estibot). But domainers here could give you a better valuation in general.

- Avoid fresh handregs. Pre-owned domains is what you need. Drops are fine if you do the research well. (caveat of this advice: some new trends like meta are great for fresh handregs but not all trends are that strong; and you need to get in very early )

- With time, once you've sold something, reinvest the profit and get more names.

- if time passes and you don't sell, discount them gradually. In the last month try to clear them here on NP at wholesale pricing. Each domain sold to other domainers gives you chances to buy better names.

- Edit/Added: Tech and finance are the bread and butter of most domainers, also health etc.
There are also countless everyday niches (like for brick and mortar, e.g tools or handyman or whatnot) but these go for xxx range and it's harder to make a profit with these.

- If you sell xxx range at first, that's fine. Most beginners won't sell any 4-figs soon.

- Good luck!

(note, luck is a factor with small portfolios... if you sell one 4-fig it could be a game changer).

 

[Recons.Com]

It is possible. If you are willing to put in a lot of sweat both working and studying.

You'd need to get into outbounding (without spam). If your selection is good, you might get 6-10% STR at around $400 average. So, you buy 50 names, sell 3-5 of those and make 1.2k to 2k. The ones that did not sell, put for the passive sale. Reinvest the 1.2k-2k into another 100-200 names, repeat the above.

 

[bmugford]

It is possible. If you are willing to put in a lot of sweat both working and studying.

You'd need to get into outbounding (without spam). If your selection is good, you might get 6-10% STR at around $400 average. So, you buy 50 names, sell 3-5 of those and make 1.2k to 2k. The ones that did not sell, put for the passive sale. Reinvest the 1.2k-2k into another 100-200 names, repeat the above.

I am not really a fan of proactively pitching domains, but I have done it from time to time in the past especially when I first started out. It was a different world then though before the army of domain spammers arrived.

If you are just starting out it can at least teach you some valuable lessons like dealing with rejection, negotiation, and the actual logistics of a domain sale (payment, push, transfer, etc.).

I have no problem hustling for sales, but if you are going to do it at least be selective. A hand reg or low dollar domain likely does not have a large pool of end users. If you are sending emails out to dozens or hundreds of potential people on a low dollar domain, you probably need to be more selective when it comes to prospects.

Brad

 

[zomainhacks]

$500 are not that much, there's not much room for errors.

Making $200 dollars income per month in the first year is almost impossible (unless you're very lucky) if you consider income as profits.

By the way, making $200 dollars monthly in revenue is possible if you go for for the $X ---> mid $XX path + some $XXX BIN at Afternic. Reinvesting every $$ on repeat is obviously needed in this path.

This was pretty much possible with last year market environment, not sure now. Also following this path is useful since as a newbie you can gain understanding of what other domainers are looking for and so - in the end- what is valuable and what it is not (and you gain this information fast! ).

If you invest only $500 you'll have to invest tons on time studying the wholesale market and reading nP, but is some sense this is good becouse you are compelled to become a better domainer just to be able to survive. But if you survive probably you will thrive.

 

[denarizqi]

True. But.

I've also said above if you read between the lines: It depends on a combination of factors, such as personal skills (talent?), money at hand to invest in, luck, the right timing (maybe not right now...?) and especially hard work. That above everything else, but coming with no guarantees though.

Anyone can of course get successful at domaining.

Most, unfortunately, wont.

(as per the statistics)

agree