discuss Is a large portfolio necessary to be successful in domaining?

[Cdomains]

What is your opinion? Is having a large portfolio necessary to be successful in the domain business for the average domain investor?

For the purpose of this discussion leave out the ultra premium domains as most of us can not afford to invest in these.

Lets also assume we all know how to pick good domains and not crap. Also leave out the crazy trends like the recent chips for example.

We are talking average every day domaining.

I liken it to having a store with a lot of different merchandise so it increases the odds there will always be something someone wants to buy.

So what do you think? How large of a portfolio of decent names must the average domainer keep in order to sell enough every year to make a profit and still pay for renewals.

100 names?
200 names?
500 names?....more?

 

[Casey L]

No, there are a ton of factors in determining how big your portfolio should be, such as budget, risk tolerance, preference, experience, etc. But you can't ignore trends because that is half of domain investing in the first place. The .mobi bubble, chips, nTLD speculation, random ccTLDs becoming popular are all huge aspects of the market, and they impact everyone's portfolio.

But personally speaking, I keep a small portfolio (<50). It's common for domainers to make more profit on one domain in a year than the rest of their domains combined, but it's also common for others to buy and sell hundreds of domains a year and make great money as well.

 

[guilty]

I've always preferred quality over quantity. I think if your main goal is flipping domains then yes, maybe quantity is what you're looking for since you will buy domains and sell them in less than 3-6 months. However, if you're going to be patient and wait until you get the best offer for your domains, then quality is what you should look for.

 

[Cdomains]

It has been said that you can expect to sell about 1-2% of your portfolio per year. Do you agree with that idea?

 

[Casey L]

It depends on your portfolio size. Since last year I have been fortunate enough to have 100% turnover on my portfolio and for a gross profit, but I do keep a small portfolio. For those with large or illiquid portfolios, the math is different, but there are infinite ways to conduct yourself.

 

[Sukhvir-Singh]

A BIG NO............. If one is having 500 crap names or just very simple names and One person is having 1-5 names like Fund.com , I.com We.com etc etc then NO need of such large portfolio.

Quality names is the main factor to be successful in domaining.

Hope this answer your question!

 

[theSun]

Go big, get massive.
Get both quality and in quantity.

 

[markter]

where do you sell a premium name like background.net?

 

[markter]

I have 166 pure generic old names. Any guidance?

 

[theSun]

where do you sell a premium name like background.net?

background.com, background.biz, background.co, & background.info.

 

[theSun]

I have 166 pure generic old names. Any guidance?

Yes, put them all up for sale. Put them for sale at namepros. its very simple logic really.

 

[theSun]

Domaining 102 in tekz999's way:

Money tends to favor the bold.

Don't think, just buy.

Because if you hesitate, others will have already bought it.

If you think and hesitate, the future you will hate the present you.

If you just buy, and don't think, the future you will thank the present you.

History will repeats itself again, and you will regret again.

So.

Don't let history repeat and regret again.

Just buy.

In quantity and in quality.

 

[Casey L]

where do you sell a premium name like background.net?

you could list them on a "make offer" page here on namepros for free. It might be good to put them in the appraisals section to get an idea of their worth.

 

[ben pedri]

I think you dont need any domains,to start ,the so called trend stuff is where the money is to be made ,most domainers with a lot of domains ,including myself have a revolving door to deal with ,as we sell domains we have to pay for renewals,sometimes we sell a domain for 5-6 grand but all in all ,The middleman makes the most money,Not The Hoarders, and the money is really made on the buy. Why the buy? because if you can get a real good deal on something ,for example a triple repeating llll.com for example RRRU.com{which was featured on namepros} for about 2600-2700 ,you can probably hold it for a few months and triple your money. Use your money to buy and flip,not make these
registrars money. Carrying 2500 domains cost about 20 grand a year ,money that can be invested here and there,. So the answer to your question is 10-20 , even if you dont do anything with them ,Its chump change to renew,and you dont have to waste precious time.

 

[Cdomains]

Mike Mann, Berkins, etc all have or had large portfolios and seemed to have very good sales. Granted, they have really good names.

 

[ben pedri]

These guys are in for over 20 years ,they can sell one domain for a million and not have to worry about fees,infact a lot of them do that sell a couple ,renew thousands for a big expense end result NO TAXES. Thats why I laugh when they tell domainers hold out dont sell cheap. RRIIIIIGHHHHTt

 

[Asfas1000]

If the domains are good, the more you have, the better.
If they are ***not so good***, the smaller the portfolio, the better :P

 

[garptrader]

Whether you 50 domains or 5000, the few domains you do sell have to pay for the majority which you don't. Otherwise, you are operating with a negative cash flow which is not sustainable long-term. The more domains you have, the more likely you will run into periodic cash flow issues which must be funded or you face having to let names drop - a 100% loss. Domainers who focus on reg fee and backorder acquisitions tend to acquire more domains but do not have the same quality portfolio of those who focus on aftermarket acquisitions.

Which is better - buy a domain for $500 to sell for $1500 or acquire 50 reg fee domains for $500, face $500 in renewals every year (assuming all $10 each in five years the 50-domain portfolio is actually far more expensive) and hope to sell one or two to cover renewals. The domainer with more domains has more inventory to offer but may very well only have two or three domains worth more than reg fee.

 

[Kate]

It has been said that you can expect to sell about 1-2% of your portfolio per year. Do you agree with that idea?

That is an optimistic rate assuming you have a portfolio that is half-decent. For many domainers the turnover will just be zero...
Even a sale or two may not offset the registration and renewals costs. So the majority of domainers are still losing money even while making sales.

First of all, the size of the portfolio is just one parameter. The composition is more important. If it's 90% .com you'll probably make a few sales unless the domains are really poor. If it's 90% new TLDs you are probably going to struggle.

Also, there are many successful domainers who have small but premium portfolios, I mean players like Digimedia, Reflex, Anything but there are many others. A big portfolio is expensive to renew, so the average quality has to match or you'll be in trouble.

Quality > quantity.

Unfortunately the prevailing mindset among domainers is the lottery mentality: more domains = more chances of making a sale (that will hopefully pay for the rest).
The race to build up a large portfolio often turns out to be a waste of money, followed by a non-graceful exit.

Conclusion: some domainers like Mann have done well with large portfolios, but that is not a condition to succeed.

 

[Cdomains]

The race to build up a large portfolio often turns out to be a waste of money, followed by a non-graceful exit.

So what is the best way to be in this business and make it work? I seems like a huge gamble any way you slice it. I think luck plays a big role. Sure you can have a good portfolio of good names, but you never know how long you will have to wait before you sell one.

That makes this game an unpredictable gamble, and for most of us who got in late it makes it difficult to navigate.

Assuming you have good quality domains, if you have a large portfolio you have more of a chance of making a sale because you have more domains that might appeal to an end user. But then you have a larger renewal bill. Not a very practical plan.

Assuming you have good quality domains, if you have a small portfolio you have less domains out there and less of a chance that someone will want one sooner than later. Doesn't seem like a good way to go either.

What is the answer? Those one word premium domains are long gone or beyond the wallet of most.

Could it be that most people who get into domains quit after the first year because it is such a hard game to play?

It is difficult to get a true picture of this business and the real odds of success. I think many find out the hard way it is not what it seems.