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Is domaining a portfolio game?

Labeled as discuss in General Domain Discussion, started by Arpit131, Jan 11, 2020

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  1. Arpit131

    Arpit131 Top Member Epik.com Staff VIP

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    I have been thinking and reviewing things and I realised that a lot of times, domaining looks like a portfolio game to me - of course, a decent one.

    Even a hand registered portfolio of say, a 250 domain name portfolio with 3% sale at $6 a name would have an investment of $1500 and 8 domain sale of say $700 each amounting to $5,600
    Accordingly, the numbers may adjust as we scale up. But when I look at appraisals section with individual domains, a single domain may not make sense a lot of times.

    Like say, a single decent .CO domain may not have value individually but if you own 200 of them, price it in $1000 range and expect a 2% sale, that may make more sense.

    A portfolio game looks like a decent game in domaining.
    What is your thought on this?
     
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  2. bmugford

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

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    There are many different business models, but there is certainly merit to the power of a portfolio.

    Having a lot of quality domains can certainly help overcome a low turnover rate.

    Brad
     
  3. twiki

    twiki Top Contributor VIP Gold Account

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    Yes, it's definitely a numbers game. But it's actually (sort of a rough formula):

    Profitability= P x (V-C) x S =

    = Portfolio size x (Domain Avg. Sales Value - Domain Avg. Cost) x Sales%

    Each factor matters. The last two are critical. Sales% is that 1% or 2% sales factor per annum mentioned by every domainer. It is very much a composite variable, influenced by several factors, such as the quality of domains primarily.

    But I'd say that the most important sub-factor in this formula is often disregarded: Trends. It really matters if the domain you have are on top of the current trend wave. Which also means that many names in portfolio might go out of fashion in a couple years.

    It is also critical that you have a varied, multi-niche portfolio where every niche has money to be made in. In this way you don't put all eggs in one basket, it's a sane profile.

    Edit: Newbies ask this question often, how much money you need to have to become a successful domainer. It obviously depends. However sort of a common answer is, as much as needed to hold > 1K domains. Guess that's sort of an indicator of size that might make it a business instead of a hit and miss thing. Personally I'm at 2.5K names today, and intend to grow to 25K as there is the earning level I aim for.
     
    Last edited: Jan 11, 2020
  4. mAd MaX

    mAd MaX Account Closed (Requested)

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    No.

    "A single Domain can change your Life!" - Frank Schilling
     
  5. twiki

    twiki Top Contributor VIP Gold Account

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    True, such an event is definitely possible, however domains of this kind are not easy to get ahold of. On the other hand, there is plenty of sale material to go around in the scalable model I'm describing.

    The biggest companies in this field, such as BuyDomains are built on this kind of scalable model.

    Let's not forget that.

     
  6. MapleDots

    MapleDots Top Contributor VIP

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    Two words

    Huge Domains
     
  7. boker

    boker Top Contributor VIP

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    You are quoting somebody who own tens of thousands of domains. So, the correct quote will be- a single domain can change your life, if you own tens of thousands of domains, to make sure the life changer domain will be among the one's you own.
     
  8. Furquah

    Furquah Brand Ambassador INDIA Epik.com Staff VIP

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    Personally, I think it's not a number game but a rather quality game. The better name you have chances of a sale grow.
     
  9. twiki

    twiki Top Contributor VIP Gold Account

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    Both.
     
  10. frank-germany

    frank-germany domainer since 2001 / musician VIP

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    he is talking to end-users
    and try to convince them by that phrase
     
  11. wizard

    wizard Domain Wizard PRO VIP ★★★★★★★★★★

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    Every one has a different model its what works best for you some people hold thousands and some people only hold a few domains but what counts is selling domains not hoarding them....
     
  12. frank-germany

    frank-germany domainer since 2001 / musician VIP

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    that is an interesting question.
    I would to see some sample calculations.

    but thinking you will get 2% sell-through
    on a numbers-game portfolio, it's a little out of the world
    try 0.5 %
     
  13. hawkeye

    hawkeye Top Member PRO VIP ★★★★★★★★★★

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    At this point in the game, unless you plan to buy some established portfolios, this could be a bottomless money pit plan.
     
  14. wallet2it

    wallet2it Deep Thinker @ DeepThink.org @ Learning.cc VIP

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    There is a diminishing marginal return at certain number of domains ...just run some simulations to optimize the number of domains versus profit assuming some business models
     
  15. Lox

    Lox _____ VIP Gold Account

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    An understanding of business culture (country, region, city, industry, niche, innovation, etc) is essential for effective sales (1000 dn, 50-100 prospects, 10 sales). Once you understand that, you can start reg. names and build an impressive (for end-users) portfolio.

    Regards
     
  16. garptrader

    garptrader Top Contributor VIP ★★★★★★★★★★

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    While pricing will affect the sales ratio, at some point a buyer has to have some use case for your domain and be willing to pay a premium price for it rather than use a made up reg fee domain with some extra characters, an additional word, a different extension(of the five hundred plus available options) or opting for a free social media handle.
     
  17. Chacha Wixard

    Chacha Wixard Established Member

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    Correct. The change is higher than buying lottery tickets.
     
  18. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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    I agree with Brad's view. Most prefer to hold a reasonable sized portfolio of quality names to keep a slow but steady stream of sales.

    That is not to say that you could not take the approach instead of a portfolio just have several domains at a time and work on selling them before you get others. That is perhaps more a flipper than an investor.

    There are as Brad says many different models, so I don't see a single "right" answer to the question posed in this thread.

    Bob
     
  19. oldtimer

    oldtimer Do some good for humanity and the environment VIP ★★★★★★★★★★

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    For small portfolios of less than 250 domains quality is the most important factor, as the portfolio gets larger then it becomes more of a numbers game as it is close to impossible to maintain high quality across a very large portfolio.

    IMO
     
  20. twiki

    twiki Top Contributor VIP Gold Account

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    What do you mean? I guess you're making some assumptions there.
     
  21. twiki

    twiki Top Contributor VIP Gold Account

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    Correct twice.

    First, it is not worth growing the portfolio faster than sales. That's a strong chance to derail in heavy losses.

    Second, yes - there are different models. But you know, the more you have, the better they are, the more you'll make. Kind of a no-brainer.

    Surely, some will stick with just a few names and some big score from that. It ain't wrong.
     
  22. hawkeye

    hawkeye Top Member PRO VIP ★★★★★★★★★★

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    No, I'm not assuming anything and it's not a deep question. I mean 'how' do you plan to acquire 25000 'worthwhile' domains from this point on? You think there are that many to yet be regged? Or are you going to buy 25000 aftermarket domains at minimum $200-300+ ea? Or are you going to buy portfolios from others to get there?
     
  23. biggie

    biggie GreenFriendly.com VIP ★★★★★★★★★★

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    the cost to replace a portfolio (assuming they are quality names) ...
    will be much higher, than the offers to purchase it.

    meaning, it will cost you much more to re-buy those same domains, than the offer buy them.

    if the cost to renew the portfolio, is greater than any offers to purchase it...
    then it's not a portfolio.
    :)

    imo….
     
  24. twiki

    twiki Top Contributor VIP Gold Account

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    Gotcha. So you are basically thinking there's not enough supply.

    There is plenty of supply. In fact a hell lot of supply. If there wasn't, BuyDomains would be out of business right now.

    (edited)
     
    Last edited: Jan 11, 2020
  25. NVDomain

    NVDomain New Member

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    It's also about establishing the right channels and connections to sell your domains since 99% of this market is littered with cheap skates, time wasters and clowns.
     

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