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.

 

[Nametree]

In my fairly short (started late 2016) and humble experience, I would say domaining can work for the small player, but it's becoming increasingly difficult to build a viable portfolio that will bring consistent cash flow without a good chunk of change.

I started with ~$3k which I made back within a year mostly out of luck, because I was buying crappy extensions and .co names before they were cool. I had a job at the time that gave me a lot of free time and sufficient disposable income that I started "investing" - the quotes are because it was most gambling, really - in domains and crypto. Spent $50-60k in the next year mostly making GoDaddy happy and overpaying for their auctions, but I also spent a decent chunk buying pricier names that I was happy to own long term. I didn't really notice how much I was spending because by late 2017 crypto was doing great, and I sold enough near the top to offset my losses in domains. Then I also bought a name under $10k that I thought I would never own for less than $50-75k, so in my mind that was a big win, but the sales were still slow 2017-2018, so by late 2018 I had slowed down significantly.

But 2019 actually was a surprise, I sold $60k+ in domains and spent much less overall, so by the end of the year I was (barely) in the green on my domain investment overall.

Now this year is slow, but still not terrible, with $25k in sales in the first quarter. Buying much less, dropping much more, and generally stepping away from activity in domains because the ROI on my time doesn't seem to be worth it any more. I still have 500ish names in brandable marketplaces many of which I'll renew, 100 or so names I overpaid for at GD auctions and holding because it feels silly to drop names I spent $300 on, and about a dozen names I'm holding long term or developing.

This is a long story with perhaps not so much insight but my takeaways are:

- not worth it if you don't have $10k to start, at bare minimum;
- a gamble at best if you're buying brandables, but the ROI on time and money is the best in brandables;
- likely a worse investment than a night in Vegas if you're buying at auctions at today's prices before reading DNAcademy + DomainSherpa for 100 hours;
- maybe a slam dunk if you've got great sales skills, tons of time on your hand, and are a good enough sleuth to find names that are not on the market and convince unwitting owners to let you have them at great prices (and/or if you're great at outbounding).

Honestly this last part is where I've failed: the only "small investors" I know of who have been successful in the last few years are folks who are somehow buying great names that haven't been on the market and either outbounding well, or have developed great relationships with the big investors therefore have a set place in the supply chain.

TL;DR I have my regrets, wasted lots of time, but I haven't lost any money overall. I have a nice portfolio, and I now own a few buildable names I wouldn't have owned at the prices I got them if I hadn't been an active investor. I'm focusing on building the latter, and being hands off with the names I'm selling, letting brandable marketplaces have at it.

As far as marketing names, I've never done it actively, but my formula has been Dan.com landing pages, names available on Afternic and Sedo as well, Brandpa (mostly) for brandables, and ALWAYS have BIN pricing. Your mileage may vary, some will encourage you to shoot the moon or whatever, but if you want to sell names, do all of the above with BIN pricing $1-3k and look away for the rest of the year.

Best of luck!

 

[Bob Hawkes]

I get a feeling that domaining works - but mostly for well connected large investors with deep pockets.

Fantastic perceptive post @hn and follow up comments @Nametree.

I think, in general, those with deep investment pockets, and a big enough domain acquisition and selling operation, have definite advantages over the small investor. I suspect, but have not tried to get the numbers, that a higher percentage of dollar volume to the big players than was the case 15 years ago, but I might be wrong.

I think it is possible to make money as a small investor, but it is very challenging. Probably harder than most other ways to make money. I am pretty sure that the majority of small investors who have only acquired in last few years lose money, or at least don't make significant money, if they consider all costs involved.

Small investors may do best in niches in which the big players do not operate much, but of course basing a business on a narrow niche is risky.

I am glad you started the thread @hn. It is a topic I have wondered about almost since the first days of my semi-serious domain investing.

Bob

 

[bmugford]

It is harder now than ever. I would say the end user demand remains stable, but the reseller prices have really exploded in recent years.

Domains that 5-10 years ago might sell for High $XX - Low $XXX at auction are selling for mid $XXX+ now.

The math does not work at these resale prices, and a standard 1% - 2% sell through rate.

For it to make sense you need massive returns on the ones that do sell, to pay for all the ones that do not, or you need a way to acquire quality domains below the current resale value at competitive venues.

There has also been a lot of consolidation with higher quality domains in fewer hands.

I still buy domains, but it is less than in the past and having cash flow from domains I bought at lower prices in the past helps as well. It would be hard to enter today with a limited budget.

Brad

 

[bmugford]

I will also say you really need quality and quantity if you want to make passive sales consistently.

If you own all bad domains you are not going to make many sales.

If you own all good domains, but a small amount, you are likely to hit a dead end capital wise while waiting for the right buyer.

There is certainly a balance between quality and quantity that leads to steady cash flow.

Brad

 

[Bernard Wright]

It seems to me that those who are best-positioned in domain investing are true investors. If I were to buy Apple stock today, I'd have no intention of selling it within the current year. It would be a long-term hold. Those who bought quality domains in the 90s, or found (at least) reasonable prices on quality domains since then, are investors. And they are probably doing fine.

Find quality names for less than their future value, and sell them later at a profit. I think there is still much potential for this. This is my strategy. I've sold a couple, but I'm approaching this endeavor with a "long-term hold" mentality. I'm an investor. I think there are some on NP who think domain investing should be like day trading. I think that's the kind of "investing" that is becoming very difficult, because the markets are beyond efficient.

 

[E-Promote]

It is still possible to handreg a domain or two on each daily drop. If you someone has no $, that should be your strategy. What's actually required to be successful (in this or any other biz) is discipline & diligence.

 

[BrandAptly.com]

It boils down to 3 things: Learning aptitude, business acumen and work ethics.
Dare I say that most of the people who are failing at domaining will fail at just about any other business. Your learning must extend far beyond the domaining industry. You need a strong foundation in sales, marketing, psychology and business in order to excel at any venture...cash or no cash, period!

Your excuse is that you don't have a lot of cash. What stops you from building relationships with deep-pocketed people? What stops you from acquiring an investor? have you put together a sound business plan that is comparable to what the big players use to win big? Have you presented it to prospective investors?

Right now, I'm aggressively doing a lot of testing and experimenting so I can device a repeatable strategy and a profitable method. I have log book in which I document all my findings. Once I have this in order and I am satisfied with my proven formula, I will put it in a business plan and raise funding to scale.

If I got you $1M cash right now to invest in domaining, show me how you would establish a profitable business in domaining? Most domainers are just dabblers hoping for a miracle. They don't have a plan. Without a solid game plan, you will fail miserably at anything no matter how much working capital you have.

 

[karmaco]

Just like any business, domaining is nuanced and can be complex. For me, it always comes down to obtaining the very best names you can afford. One could argue the smaller investors need to have an even better portfolio and names to see a consistent STR. Even with a great portfolio, great sales can take a very long time.

If you are not seeing results after however many years you either need better names, better prices, more patience or a combo of these. Better to have 100 great names than 1000 mediocre names. Don’t be afraid to reinvent your domaining plan if the current one isn’t working,

 

[BrandAptly.com]

Better to have 100 great names than 1000 mediocre names. Don’t be afraid to reinvent your domaining plan if the current one isn’t working,

This is tantamount to saying that it is better to sell 100 Bentley GTCs than 1,000 Honda Civics. There's a market for both vehicles. What if you don't yet have access to Bentley clients but have a ton of Honda customers at your disposal? What if you're better at connecting with Honda customers than you are with Bentley customers? I know of domainers with huge portfolios of what would be considered modest names who are making a killing in the business.

It appears a lot of people operate under the hypothesis that the domain names are supposed to sell themselves. You have to be more proactive with your selling. Test, test, test. Measure results. Do more of what works and less of what doesn't.

 

[karmaco]

This is tantamount to saying that it is better to sell 100 Bentley GTCs than 1,000 Honda Civics. There's a market for both vehicles. What if you don't yet have access to Bentley clients but have a ton of Honda customers at your disposal? What if you're better at connecting with Honda customers than you are with Bentley customers? I know of domainers with huge portfolios of what would be considered modest names who are making a killing in the business.

It appears a lot of people operate under the hypothesis that the domain names are supposed to sell themselves. You have to be more proactive with your selling. Test, test, test. Measure results. Do more of what works and less of what doesn't.

Honestly what is debateable about better to have great names than mediocre ones? The mediocre ones are less desirable and harder to sell even with lower prices. Unless your desire is to sell super low to other domainers or drop a ton of names while “experimenting” you are going to waste alot more money on 1000 mediocre than you will on 100 great. Quality is what makes for consistent sales not large volume of low caliber crap.

And yes great names do sell themselves.

 

[BrandAptly.com]

Honestly what is debateable about better to have great names than mediocre ones? The mediocre ones are less desirable and harder to sell even with lower prices. Unless your desire is to sell super low to other domainers or drop a ton of names while “experimenting” you are going to waste alot more money on 1000 mediocre than you will on 100 great. Quality is what makes for consistent sales not large volume of low caliber crap.

And yes great names do sell themselves.

Alas, you missed the point completely. The argument was that not having deep pockets for premium domains by industry standards should not prevent you from making a decent living in the domain business.
With business acumen, solid work ethics and great learning aptitude, you can do well with or without premium names. The average joe who's starting a business has no clue what a premium domain looks like. THAT is your advantage. Don't take my word for it. Just take the phonebook and look at some of the business URLs in your area.

I highly recommend two books: 'The Lean Startup' by Eric Ries and 'The hard thing about hard things' by Ben Horowitz. They will shed more light on my thought process.

FYI, Steve Jobs built a much better computer; Bill Gates built a much better business.

All the domain names I have sold would be considered crappy by veterans. The first one was to my pet groomer, the second to my dentist, the third to a small coffee shop down my street...you get the picture?
https://www.namepros.com/threads/are-newbies-increasing-the-competition.1177428/#post-7639530

 

[Cmon wilson]

Just like any business, domaining is nuanced and can be complex. For me, it always comes down to obtaining the very best names you can afford. One could argue the smaller investors need to have an even better portfolio and names to see a consistent STR. Even with a great portfolio, great sales can take a very long time.

If you are not seeing results after however many years you either need better names, better prices, more patience or a combo of these. Better to have 100 great names than 1000 mediocre names. Don’t be afraid to reinvent your domaining plan if the current one isn’t working,

hi, ok so i invest in 100 domains in the first year .. none sell then theres the renewal .
if none are selling i am paying $1000's + a year just to renew..this happens 3 years in a row then with even a ffew sales i would be losing untill i finally had enough though! ?.. of course this isnt me i have only just started a ffew weeks ago with £40 registering domain names from scratch with the like of go daddy and others.
so atm i have 7 domains witch i have spent roughly the last of my £40 on till m next pay haha being honest by here!!. Now it a waiting game of course but im sure there are hidden strategies that are kept among a small minority thats making sales profitable/successful !?
is it still a good idea to be registering names although i know most also the best are taken but with the average person with little money is this a good way to start or should i be spending a little more on expired domains and then flipping them on sites or to reach out to potential buyers.? thanks wil$on

 

[bmugford]

hi, ok so i invest in 100 domains in the first year .. none sell then theres the renewal .
if none are selling i am paying $1000's + a year just to renew..this happens 3 years in a row then with even a ffew sales i would be losing untill i finally had enough though! ?.. of course this isnt me i have only just started a ffew weeks ago with £40 registering domain names from scratch with the like of go daddy and others.
so atm i have 7 domains witch i have spent roughly the last of my £40 on till m next pay haha being honest by here!!. Now it a waiting game of course but im sure there are hidden strategies that are kept among a small minority thats making sales profitable/successful !?
is it still a good idea to be registering names although i know most also the best are taken but with the average person with little money is this a good way to start or should i be spending a little more on expired domains and then flipping them on sites or to reach out to potential buyers.? thanks wil$on

The biggest issue with many new domain investors is realistic expectations.

How many businesses in the world can you enter with under $50 and make a lot of money?

The average passive sell through rate is around 1-2% at standard end user pricing.
Let's say that range is high $XXX to Mid $X,XXX for most domains.

If you only have 7 domains, on average it would take around 10 years to sell one domain passively.

That is also with quality domains. Bad domains, or overpriced domains are going to have a far lower sell through rate.

I sold a domain last week for $25K. However, you have to account for all the domains you don't sell in a given year, not just the ones you do.

Brad

 

[karmaco]

hi, ok so i invest in 100 domains in the first year .. none sell then theres the renewal .
if none are selling i am paying $1000's + a year just to renew..this happens 3 years in a row then with even a ffew sales i would be losing untill i finally had enough though! ?.. of course this isnt me i have only just started a ffew weeks ago with £40 registering domain names from scratch with the like of go daddy and others.
so atm i have 7 domains witch i have spent roughly the last of my £40 on till m next pay haha being honest by here!!. Now it a waiting game of course but im sure there are hidden strategies that are kept among a small minority thats making sales profitable/successful !?
is it still a good idea to be registering names although i know most also the best are taken but with the average person with little money is this a good way to start or should i be spending a little more on expired domains and then flipping them on sites or to reach out to potential buyers.? thanks wil$on

Most of what you described is the business of domaining. You register or buy, you pay renewals, you wait and hopefully you sell. It never becomes 100% profit because you have to pay renewals.

A real problem I see here is people register many names with the intent to drop Or sell to another domainer after a year. Names rarely sell after one year unless your names are relatively good and you price very low. Either way, its a poor business plan to register names you do not intend to or cannot afford to keep.

My advice to anyone is get only what you can afford to and really to research like crazy and know what a good name is before you invest heavily. There are seasoned domainers who routinely try to pedal garbage here. After 3,4,5 and more years you should know what is worth having and what is not. You will make mistakes no doubt, the first two years you hopefully do all the learning and mistakes and acquire skills and some good names There is no fast track or get rich quick. You have to walk through it and learn along the way.

 

[Cmon wilson]

Most of what you described is the business of domaining. You register or buy, you pay renewals, you wait and hopefully you sell. It never becomes 100% profit because you have to pay renewals.

A real problem I see here is people register many names with the intent to drop Or sell to another domainer after a year. Names rarely sell after one year unless your names are relatively good and you price very low. Either way, its a poor business plan to register names you do not intend to or cannot afford to keep.

My advice to anyone is get only what you can afford to and really to research like crazy and know what a good name is before you invest heavily. There are seasoned domainers who routinely try to pedal garbage here. After 3,4,5 and more years you should know what is worth having and what is not. You will make mistakes no doubt, the first two years you hopefully do all the learning and mistakes and acquire skills and some good names There is no fast track or get rich quick. You have to walk through it and learn along the way.

thanks for your time that made a lot of sense

 

[hn]

Thank you @Nametree @Bob Hawkes @bmugford @Bernard Wright @E-Promote @BrandAptly.com @karmaco @Cmon wilson for your follow up posts.

Yes so from what most in this thread have mentioned, its possible to make profits but you need some basic investment. Maybe we can compare this to real estate rather than stocks or mutual funds where you can make small investments. But like I pointed out earlier, in all other cases you have a benchmark pricing like if its such and such a stock or if you invest in say this area - the rough rate you may get is between X and Y. But incase of domaining I dont find any such thing. For this I think there should be some kind of benchmark pricing. Like we could have minimum base rate say 5% or 10% of GD or Estibot pricing? That could give some basic confidence to stay invested in domaining and one is aware of the approximate price one could get.

So like one of you pointed out how many businesses you can enter with $50 - stock market is definitely one of them. But the point is different. For example if you invest in stock or fixed deposits or mutual funds - once you invest you dont need to keep "renewing" it each year. So say you invest $1000 the first year - next year from your savings you can invest another $1000 so your assets increase to $2000. But in domaining, till a domain is sold you need to keep renewing. Like I mentioned renewing cost is a major cost in domaining. So if you purchase 100 domains for $1000 and if none sell - next year another cost of $1000 and so on till its sold. Now if you sell after 5 years at say $50 a domain you are still at a loss - because even basic investment in any other asset would have given returns in form of dividend, interest, etc. Let me give you a simple example. if you invest just in simple FD at 5% / year and rather than renewal cost you keep adding to your investment at same rate .
First Year : $1000 - Interest $50
Second Year : $2000 - Interest $100
Third Year : $3000 - Interest $150
Fourth Year : $4000 - Interest $200
Fifth Year : $5000 - Interest $250.

So at the end of 5 years you have a guaranteed amount of $5000 + Interest of $750

Now if its domaining - at the end of 5 Years just to make money as much as a fixed deposit you need to get atleast $57.5/domain and all domains need to sell.

Is that really possible? No based on my experience.

The ideal scenario is that we need to sell say atleast 20% domains each year at $50 so that we can recover the renewal costs.

Hence I think there should be something like an index - like we have property index, stock index and rated by agencies on appx value the domain we hold. I think that would create more trustworthy environment among smaller domain investors. My feeling is if there are more smaller investors you get a healthier market condition rather than if there are few big players who command the market. This never gives smaller investors the scope to grow which is possible in many other investment forms.

And like one member posted all domain values are subjective, but I think we need to create some sort of a base pricing if everyone has to survive and profit in the market or what will happen is that small investors keep renewing domains for decades and one fine morning a big investor comes and says buying portfolios at $X or $XX a domain and then already has contacts to whom he sells it at $XXXX which creates an unhealthy environment. Just my views but I feel that small investors need to be protected.

 

[Bob Hawkes]

Some great points in your well written post, @hn.

While this was done a couple of years ago, and I may refine it based on my longer experience now (a greater effort to separate retails sales, both in prices and sell-through), I had a look at different models in this post Is Domain Investing Profitable that may interest you.

I think most people that have found it profitable in addition to working hard and being disciplined, have an outstanding sixth sense of domain value. Also, despite my recent look at diversification, I think many of the most successful investors do one thing well - e.g. they are masters at brandables, or really understand the .io or .co market, etc.

But, as you point out, it is not like picking some stocks, mutual funds or ETFs after doing your research, and then sitting on them without further ongoing significant costs.

Thanks again for a great post.

Bob

 

[bmugford]

Thank you @Nametree @Bob Hawkes @bmugford @Bernard Wright @E-Promote @BrandAptly.com @karmaco @Cmon wilson for your follow up posts.

Yes so from what most in this thread have mentioned, its possible to make profits but you need some basic investment. Maybe we can compare this to real estate rather than stocks or mutual funds where you can make small investments. But like I pointed out earlier, in all other cases you have a benchmark pricing like if its such and such a stock or if you invest in say this area - the rough rate you may get is between X and Y. But incase of domaining I dont find any such thing. For this I think there should be some kind of benchmark pricing. Like we could have minimum base rate say 5% or 10% of GD or Estibot pricing? That could give some basic confidence to stay invested in domaining and one is aware of the approximate price one could get.

So like one of you pointed out how many businesses you can enter with $50 - stock market is definitely one of them. But the point is different. For example if you invest in stock or fixed deposits or mutual funds - once you invest you dont need to keep "renewing" it each year. So say you invest $1000 the first year - next year from your savings you can invest another $1000 so your assets increase to $2000. But in domaining, till a domain is sold you need to keep renewing. Like I mentioned renewing cost is a major cost in domaining. So if you purchase 100 domains for $1000 and if none sell - next year another cost of $1000 and so on till its sold. Now if you sell after 5 years at say $50 a domain you are still at a loss - because even basic investment in any other asset would have given returns in form of dividend, interest, etc. Let me give you a simple example. if you invest just in simple FD at 5% / year and rather than renewal cost you keep adding to your investment at same rate .
First Year : $1000 - Interest $50
Second Year : $2000 - Interest $100
Third Year : $3000 - Interest $150
Fourth Year : $4000 - Interest $200
Fifth Year : $5000 - Interest $250.

So at the end of 5 years you have a guaranteed amount of $5000 + Interest of $750

Now if its domaining - at the end of 5 Years just to make money as much as a fixed deposit you need to get atleast $57.5/domain and all domains need to sell.

Is that really possible? No based on my experience.

The ideal scenario is that we need to sell say atleast 20% domains each year at $50 so that we can recover the renewal costs.

Yeah, well then you sell one domain for $10K and it blows all the math above away.

You can't really compare the fields. The subjective nature of domain valuation is how you make money.
The same opportunity is not really there with more liquid investments like stock or real estate.

If I had $5K right now I am very confident I could turn that into a larger profit long term.

I would not be buying 100 hand regs though. I would probably buy 20 - 25 $200 - $250 quality domains on the aftermarket, and lower my carrying costs.

With that said, I also own liquid investments as well. It is good to have both.

Brad

 

[hn]

@Bob Hawkes Thanks for the link. Will go through it in detail. Ya unfortunately for the lesser mortals like us who are small time investors we don't have the 6th sense. In domaining I consider 6th sense as contacts and leads who are directly connected with the end user. I think the bigger domain investors would be the intermediaries who would purchase from smaller investors like us and sell it to the end user.

@bmugford - right if that happens. Same can happen with investments like stocks too. One good stock and you can get multifold returns. And like I said for most other investments you can do different cross checks, history, forecast etc before investing. Cant say the same about domaining.

Ya hand reg was just an example whatever you purchase - you feel it has value but others may feel like there is no value. Like I purchased some domains at $100-200-400 too but did they sell? No. Still holding hoping one day it may sell. The market I think is highly subjective and I may find value but may end up holding on to it or dropping it without any returns.

Yes even I have investments in other areas so was doing a comparative analysis of the finances as found that only this part of the investment was negative return - other investments have grown multifold and no pressure on yearly basis.

 

[Reddstagg]

Good morning,

The main thing that I take away from the original post is that you have fallen out of love with domain investing. There is no spar, no passion or it seems any fun.

Don't worry, I get the same sense from other domain investors. Maybe because I am fairly new into this business with somewhat limited funds I am still getting a buzz from every domain name that I register. I'm probably 95% hand regging so maybe there is just more excitement and fun in this rather TV than just buying and selling domains.

It is a business, but who said it cannot be both professional and fun.

There are 7.7billion people on this planet of ours and anyone of them could register my next hand reg but if they don't and I get lucky I will have great satisfaction knowing that as long as I keep paying the renewals no on can take it away from me no matter how much money they have. This is my buzz, my excitement.

Sure, the sceptics will say (and there are many) that no one wants my hand regs as they are of no value, but my view is that just because it is cheap and no one has registered it for a while or ever, doesn't mean it doesn't have more value than what I paid for it. Even if I reg it for 5 bucks and sell it for six bucks that equates to a 20% ROI which I don't think would be turned down by anyone in any other business.

If you equate your domain investing as a relationship maybe it is time to admit that the honeymoon period is over, the fun has left the room and it is time to call it a day and move on.

If you don't enjoy doing anything in life then what is the point of doing it in the first place. Know when to hold and when to fold. If the only reason that you are doing this is to make money maybe you are doing it for the wrong reason.

As annoying as I can be sometimes I'm not going anywhere soon so you're kinda stuck with me for now.

I'm still enjoying my journey so the lesson I take from that is do what makes you happy. Will I ever be rich? Does that even matter?

I only need to be lucky once right?

Now, does anyone want to buy a hand registered domain name with numbers, 3 hyphens and in a new tld?

Regards,

Reddstagg

 

[bmugford]

Sure, the sceptics will say (and there are many) that no one wants my hand regs as they are of no value, but my view is that just because it is cheap and no one has registered it for a while or ever, doesn't mean it doesn't have more value than what I paid for it. Even if I reg it for 5 bucks and sell it for six bucks that equates to a 20% ROI which I don't think would be turned down by anyone in any other business.

The problem is that math will never work unless you sell 100% of your domains and have zero carrying costs after the initial registration. You have to account for all the domains you don't sell, not just the ones you do.

Brad

 

[alcy]

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.

 

[Reddstagg]

The problem is that math will never work unless you sell 100% of your domains and have zero carrying costs after the initial registration. You have to account for all the domains you don't sell, not just the ones you do.

Brad

Thank you for your response and your comments.

There cannot be many people operating on the formula you describe.

Basic economics will always apply whether we are buying domain names or stamps, antiques or vintage cars.

Sure, the preferred model is probably drop a million on a limited edition vintage porche but there are so few people who can actually do that.

The rest of us mere mortals must be content with buying a rust bucket which costs us very little but with a lot of love and attention will make us a profit.

What should we enjoy more? The profit we make or the journey we go on doing the restoration?

I had a plan when I started just over a year ago and a budget to get me started. Maybe I should have spent $500 on just one domain which at that time would probably have bern a second rate 4L.com. How much would that be worth today? I would almost certainly be looking at a tangible loss already and I would probably took the hit and quit the business.

At least with my model I am still in the game and I am still enjoying the ducking and diving of being a domain investor.

Many people told me to quit the business as I seemingly didn't have a clue and they warned me that I would lose all my money when it came to the first year of renewals, but guess what? I weathered the storm and I'm still standing. I still don't need to make one single sale to continue my journey so I will continue to grow, learn and have fun as I go along on my journey.

The world is changing and we need to change with it and my balanced well spread portfolio allows me to do that.

Regards,

Reddstagg

 

[bmugford]

Thank you for your response and your comments.

There cannot be many people operating on the formula you describe.

Basic economics will always apply whether we are buying domain names or stamps, antiques or vintage cars.

Sure, the preferred model is probably drop a million on a limited edition vintage porche but there are so few people who can actually do that.

The rest of us mere mortals must be content with buying a rust bucket which costs us very little but with a lot of love and attention will make us a profit.

A lot of assets don't have carrying costs like domains do.

The math is the math. Whether your budget is $100 a year or $10M a year is largely irrelevant.
Every domain investor still has to account for domains that don't sell as well as carrying costs in a given year.

The math you described simply does not work unless you have a 100% sell through rate and $0 carrying costs.
Otherwise, you need much higher margins on the individual domains that do sell.

The long accepted industry standard is about 1-2% end user sales per year for a quality, reasonably priced portfolio. You can do the math and see what individual sale prices need to be to cover that.

Brad