debate Is domain investment really worth it? Does it work for small domain players?

[hn]

Ok I know this may be a controversial title / topic but I guess all are here to learn from past mistakes and understand if one is really on the right path or not. I am seriously considering liquidating all my domains as I really dont see investing in domains as a worthy option. I did a small comparative analysis (based on my total investments in purchasing domains + renewing them for almost 10 years now) to other investment forms and get a feeling that I may have lost a fair bit of earnings if I had invested them elsewhere.

I get a feeling that domaining works - but mostly for well connected large investors with deep pockets. They are able to keep purchasing (at very low rates) from sellers like us, activate their networks and sell the same domain at multiple times. So one will say well they also work and contacts are built over years. Yes I agree. But why cant we get the same leads / contacts directly? Like a user wants x domain why would they go through some such investor ask them to purchase rather than getting it directly through us who are the real owners?

I hold a very small portfolio of domains - average age of domains now is around 10+ years. Based on the various topics covered in this forum and across the web almost all domains are

• a) Aged average age is roughly 10+ years
• b) Have meaning/sense together
• c) mostly 2 word domains which can be product/service names or meaningful 2 dictionary words
• d) Can be brandable - to test had put a few domains in brandbucket and a couple are also listed one around the 4k mark.
• e) Appraisals on GD - ok say can divide this around 50% 1k-2k 25% 2-3k and remaining lower or higher
• f) Then came the wave of new gTLDs so got a few during the initial period one word small words, words that make sense together and kept renewing it but still no luck. So when I hear some random domain sale directly from the registrar or investors at amazingly high prices I again get the feeling which I have - if you have connections you can make a deal and exit.

Given the above one would assume - I can get atleast 50 or 100$ out of a domain. Right? Wrong. I have seen most try and get them for quite lower mostly offering low XX per domain. What most claim is oh I am a reseller so give me resale rates. Now I dont understand what a resale rate is? For me I am the owner of the domain and you are a buyer. I expect say a specific amount for my domain based on the type of domain. So if I can sell it for $XXXX but someone comes to me and says oh you know what as I have to resell it lets do it for $XX now as I cant pay you end user rates of $XXXX which I will sell for. This is for example if you have a real estate piece and the market rate is $1000/sqft and the consultant comes to you and says oh lets finalize it for $100 as I am not the end user but I will later sell it for $1000.

I will mention here that even I have taken part in many auctions on NamePros and got domains at a cheap price but the point I am trying to make is that even the seller would have invested quite a bit getting the domain and due to one reason or another has to liquidate. Hence a domain according to me becomes an illiquid asset. Another issue is there is no know benchmark for pricing. Like if its stocks or real estate you have some basic benchmarks - say if property is in specific area the appx rate you may fetch is $X or $Y and same for stocks. But for domains its like a jackpot - like I keep saying - price of a domain is only what someone is willing to pay for it. If you like the price you complete the deal or you keep holding the domain till its sold.

This creates what I would say a monopoly kind of situation where just a few top level traders or investors then control the market. Like today I may participate in a few auctions, get domains at a cheap price. Then what? I have to resell it to earn something out, which I find almost impossible.

In the past 10 years I have been able to sell exactly 3 domains - all end users and got decent $X,XXX per domain. But that took care of around 3 years of renewal fees. Then what? Nothing just sitting on around 100 domains with hardly any revenue as now most of us use ad blockers so no income from parking/ads unless I am missing something.

I also read quite a bit about sending emails and making calls. I would consider all this as spam. Any unsolicited email or call would be marked as spam and this may affect our domain ratings too if too many mark our email as spam.

I have listed on marketplaces like sedo, dan, afternic etc too - in all these years have got just 2 offers (which we took forward) other offers were like $XX or around that trying to get the domain cheap.

Developing domains is no easy task, as I run a couple of sites doing reasonable traffic and sales via affiliate income but it requires a lot of time which unfortunately for small investors like me is less as we also do other work to support this.

Hence, my ending note is I would really like to know if domaining works for small investors. And how do you market your domains so that we can get a reasonable amount out of it.

Hope this post is taken in a positive spirit and constructive criticism and suggestions are very much welcome.

 

[Reddstagg]

it boils down to what your financial needs are. this varies between people... location you live etc.. so there isn't a single formula for this.. because some people can make millions but have lifestyles costing millions per month.. so it still means they are in debt and have nothing.. wheras others can make few 1000s per monht from somehting like domains and be happy and cover all their needs and expenses.

Thank you for your reply.

I think that sometimes people try to project their plan onto yours as a means of trying to help in a well meaning manner but this won't work if there is only one thing different. What is that one thing you ask?

Attitude to risk. Two people with the same plan can end up with different results if their attitude to risk is different. One person might be to the point of reckless whilst the other could be ultra cautious.

I think that sometimes we need to be somewhere in the middle.

We can be brave but only with money we can afford to lose.

I've not lost anything until the day I quit as I still have digital assets. Some would argue that domain names can sometimes either be appreciating assets or depreciating assets reducing by paying renewals.

The smart people know the difference.

The rest of us make it up as we go along adapting as needs demand it.

History will state that I got into this business at just the wrong time but only my own skills, attributes and shere determination will decide whether I am successful or not.

 

[equity78]

Good question with so many views to have so few votes, only 34 tells little. It depends on who you talk to, I know people in this business 20 + years who believe most domainers all time have lost money.

In most anonymous conversations everyone is a superstar supposedly. As a small investor why did you become a domain investor? What is the goal? In my opinion it's the first thing to answer.

 

[BaileyUK]

Unfortunately domaining is a hot-bed of Collectomaniacs (easy to include myself of old). and a hoarder mentality Tie that in with the ease of the one-click purchase and an overwhelming sense of self belief.

Of course its a recipe for disaster. Most of us done better when we identified all the negative traits and set about putting them right. Then it worked for me.

And before somebody says they are the same traits of being successful. Let me just add - NOT when every property you own is empty, Or you have a warehouse full of stock you spend your time just admiring, recounting and reorganizing.

 

[s.g]

Thanks to all of you. NP and threads like this one are invaluable.

 

[lock]

To be honest from what i observe is the ones that are managing under 100 names are getting best percentage of sales and inquires as although they haven't enough names for the traffic to come to them they manage their time better and actually have enough turn over to keep up the enthusiasm.