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discuss Is domaining a portfolio game?

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Arpit131

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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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The views expressed on this page by users and staff are their own, not those of NamePros.
I see some talk of "Hold Time" which is a very important factor in the end result of having a large portfolio, I have 212 LLLL.com that i have held since 2006 to date, so you look at total investment, I currently have around $100 invested in each LLLL.com, some of the LLLL.coms may be matured out to average sales current pricing of LLLL.com , so i may be in a sink or swim situation with those??? it all depends on how you look at, the volatility of the market for LLLL.com is always a factor, but if i liquidate out i am folding on liquid assets, Not good IMO. hold and wait for less industry trading IMO.

The same can be said for tier 1 and 2 domain names, as they become harder to purchase at pricing that will substantiate the purchase for immediate good profit, they will gain traction in the end user market as more holding continues with industry trading.

The domain name industry is no different that any other industry in the fact. supply and demand along with industry trading vs end user purchase, there is no absolute calculation of being right, Investing vs capital is the equation each individual person has to measure on their own best interests IMO
 
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Thank you very much! I am impressed that you figured out the implicit strategy. Not sure 3%+ in 2020, as there is so much ground work to take care off. Probably 100+ of small/large details to take care of. RB has not formally launched yet, still ironing out the kinks and prepping to upload the portfolio, but already gets hundreds of visitors a day that I was sending elsewhere before. Now the matter is making it smooth experience for them to find, buy, succeed )

That is what stopped me from developing a full scale market place with my portfolio over the years, the process of creating it is very tedious to me lol, I probably shouldn't rely so much on other market places for my sales and try and absorb the 9% to 20% into my own pocket, but the market places fit my needs because i work full time outside of domaining, I plan to retire this year late in 2020 and put the family business into my sons hands, maybe i will consider venturing full time into the domain name industry, we'll see i guess
 
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That is what stopped me from developing a full scale market place with my portfolio over the years, the process of creating it is very tedious to me lol, I probably shouldn't rely so much on other market places for my sales and try and absorb the 9% to 20% into my own pocket, but the market places fit my needs because i work full time outside of domaining, I plan to retire this year late in 2020 and put the family business into my sons hands, maybe i will consider venturing full time into the domain name industry, we'll see i guess

Good luck! You certainly feel the names, so it is good fit. That is the part that cannot really be taught without having a talent for. How many names are there currently in your portfolio?
 
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Good luck! You certainly feel the names, so it is good fit. That is the part that cannot really be taught without having a talent for. How many names are there currently in your portfolio?

I currently have 432 names , 83.9% .com 16.1% .org , anything outside those two TLDs is outside my comfort zone lol, I did make a good sale of Gear.us and flipped many many LLL.in and LLL.us some years back. but no more dabbling outside .com .org for me.
 
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I believe everything you tell me, Rich:
  • "I don't share sales information."
  • "I don't share details of my plans."
  • "I think I'm revolutionizing all industries just by participating in them."
The issue is not your believability, it's your lack of ability to provide even a shred of empirical evidence to suggest that your methods work.

Check out @boker and his posts. @bmugford and I both challenged his suggested method, and he provided us with:
  • Additional details on where to get cheap registrations
  • Data from his own experience using this method on a smaller scale
  • Confirmation that he knows people in the industry who apply the strategy with success, and some indication as to how they do it.
Can I personally confirm what he's telling me? Maybe to some degree, if I wanted to... but at least he shows credibility by willingly sharing this knowledge.

You contend that your methods are blowing the roof off the whole domain industry, and that you personally are proving to everyone how well they work. Please elaborate. Or fall back on the elementary schoolyard method of getting attention: "I have a big secret, but I can't tell anyone."
"You contend that your methods are blowing the roof off the whole domain industry" Seriously Joe Nichols....why the BALD-FACED LIE? You think I was going to let you get away with that? Again, you owe me an apology sir, and you don't deserve any answers from me. Not ONCE have I insinuated I'm blowing the roof off the domain industry.
 
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Thank you very much! I am impressed that you figured out the implicit strategy. Not sure 3%+ in 2020, as there is so much ground work to take care off. Probably 100+ of small/large details to take care of. RB has not formally launched yet, still ironing out the kinks and prepping to upload the portfolio, but already gets hundreds of visitors a day that I was sending elsewhere before. Now the matter is making it smooth experience for them to find, buy, succeed )
Out of curiosity, do you know how you've been generating that much traffic already? Are all your names currently pointed to the site, or have you been using some promotional techniques leading up to your launch?
 
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Quality over Quantity any time.
Mamprit...i've had a lot of experience in service type industries and even the real estate industry.
I've also experienced making and losing money with both quantity and quality. Bottom line, portfolio management determines success or failure. Some people can manage both for a profit, but they're the exception. There are lots of books written on the theory of quantity vs. quality and profitability...i'd suggest you read them. Fortunately, I've experienced both:xf.wink:
 
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Out of curiosity, do you know how you've been generating that much traffic already? Are all your names currently pointed to the site, or have you been using some promotional techniques leading up to your launch?

What I did is set up /your-future-business-name

where I wrote that if they landed there, it means the domain is being prepared for listing not to confuse them further, as they won't be able to find the name in the search yet. In the meanwhile, they can contact by phone/email if they need it urgently.

And then I redirected about 2000 names to that page. Roughly, 4/5 domains give me 1 visitor a day just from type-ins.

Then once listed those names should bring more from Google search. By the end of 2020, I should be getting 2000+ visitors daily organically, plus social media, promos, ads etc.
 
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No but entrepreneurs, self employed, researches and adventurists.
99% of this market is littered with cheap skates, time wasters and clowns.
 
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I could be wrong in my calculation, correct me if I'm wrong. If somebody will start now to build a portfolio of 25k, at least medium quality domains, it should be either closeouts or cheaper auctions, so a $30 on average could do it? So that means a 750k investment upfront+ 1st year renewal, 225k+2 year renewal, 225k +3rd year renewal, 225k, so that means something like a 1.75 million investment in the first 3 years without making any money or maybe just a small %. With the forth year, let's say you will make 1% STR , with 2k average, that means 500k minus 225k renewal, so 275K profit just for year 4, but overall over 1 million less, after 4 years. If you go ahead, the first year that you break even will be the 8th year and after 12 years or so you could double your money, not counting your time spent. I don't have 1.3 million $, but I don't think that I will be happy to double it in 12 years.

@boker .. No .. if you aren't hitting your target STR (1% in this case) on the portion of your domains that you've held at least one year, then you're getting the wrong domains. If your target is 1% STR, and you're you're growing your portfolio at an steady pace (more or less same number of domains per month), then even your first year you should have a 0.5% STR because in theory you'd have held all your domains an average of 6 months (1% STR x 0.5 years = 0.5% STR/Yr).

That being said .. obviously the domains you acquire during your first year will be weaker than your latest year, but if you blow your $$ and you've acquired 25k domains in your first year and not getting your needed STR by the end of the following year, then you're in serious serious trouble.


Here's more reasonable math for you using the same expectations that you gave. Let's say you're want to hit 25k domains in 5 years with mostly closeout and low bid expired domains .. acquiring a steady 5k domains per year.


Assuming avg $30 cost (including y0 renewal if applicable) and average STR of 1% and avg sale of $2k.

Every year you acq 5k domains @ $30 avg acq = $150k cost, w/ STR or 0.5% = $50k in sales

For there every year all existing domains get 1% STR with a $10 average cost (renewal). With these domains your costs are $50k * # of years and your profits are $100k * # of years.

This would be what your annual profits would be:

Y1) -$100k
Y2) -$50k
Y3) +$0k
Y4) +$50k
Y5) +$100k

So in theory you should have broken even by the end of your 5th year.

Then at the end of your 6th year you'll have profited $150k (for a running total of also $150k)

At the end of your 7th year you'd have a running total of $350k, Y8 a running total of $600k.

By the end of your 10th full year you'd now have 50k domains and running total profit of $1.25M, and you'd have profited $350k that year.


That being said, I think acquiring 5k domains per year is a little aggressive, but at $30 acq, it's not impossible. The real key is to maintain the 1% STR quality. Which is easier said than done. *IF* you know what you're doing, then it's doable. If you're prepared to acquire fewer domains, then your avg acquisition price will likely go down and your avg sales price will go up a bit because in theory you'd acquire the best of the 5000.

So basically if you halved those numbers, you'd actually have a much higher chance of getting half the results.

The real number you want to hit is a combined 100x your acquisition cost when you factor both STR and Avg Markup together.

So if your average acquisition price is $25, then you're hopefully selling 1% of your domains a year at $2,500. But if you sell them higher then you're ok with a lower sell-through. Like if your average sale was $5k, then you're fine with a 0.5% sell-through.

As long as you're hitting that magic 100x, then you're never really losing money after a year on the domains you bought 1 or more years before. More importantly, with your renewals costing 40% of acquisitions, this is where you'll find your long term profits as more and more of your portfolio has been held by you for over a year.


Keep in mind .. there's no interest or inflation in my calculations.

Also, I use $10 for average renewal because it's an easy number, and most domainers should not be paying more than $8.5 renewals for .com domains. So at $10/domain it's a pretty typical domainer portfolio with mostly .com domains, and a handful of .co, .io or .tv (etc) with renewals well above $10.


MOST IMPORTANTLY .. remember that most new domainers do NOT succeed in hitting 1%. Yes there's a noticeable portion of people here on NamePros who do .. but remember that the average "active NamePros poster" is losing money .. and even worse .. the average "active NamePros poster" actually does better than the industry average when considering the majority of people who quit domaining by the time their first renewal cycle hits.


Hope that all made sense! :)
 
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@boker .. No .. if you aren't hitting your target STR (1% in this case) on the portion of your domains that you've held at least one year, then you're getting the wrong domains. If your target is 1% STR, and you're you're growing your portfolio at an steady pace (more or less same number of domains per month), then even your first year you should have a 0.5% STR because in theory you'd have held all your domains an average of 6 months (1% STR x 0.5 years = 0.5% STR/Yr).

That being said .. obviously the domains you acquire during your first year will be weaker than your latest year, but if you blow your $$ and you've acquired 25k domains in your first year and not getting your needed STR by the end of the following year, then you're in serious serious trouble.


Here's more reasonable math for you using the same expectations that you gave. Let's say you're want to hit 25k domains in 5 years with mostly closeout and low bid expired domains .. acquiring a steady 5k domains per year.


Assuming avg $30 cost (including y0 renewal if applicable) and average STR of 1% and avg sale of $2k.

Every year you acq 5k domains @ $30 avg acq = $150k cost, w/ STR or 0.5% = $50k in sales

For there every year all existing domains get 1% STR with a $10 average cost (renewal). With these domains your costs are $50k * # of years and your profits are $100k * # of years.

This would be what your annual profits would be:

Y1) -$100k
Y2) -$50k
Y3) +$0k
Y4) +$50k
Y5) +$100k

So in theory you should have broken even by the end of your 5th year.

Then at the end of your 6th year you'll have profited $150k (for a running total of also $150k)

At the end of your 7th year you'd have a running total of $350k, Y8 a running total of $600k.

By the end of your 10th full year you'd now have 50k domains and running total profit of $1.25M, and you'd have profited $350k that year.


That being said, I think acquiring 5k domains per year is a little aggressive, but at $30 acq, it's not impossible. The real key is to maintain the 1% STR quality. Which is easier said than done. *IF* you know what you're doing, then it's doable. If you're prepared to acquire fewer domains, then your avg acquisition price will likely go down and your avg sales price will go up a bit because in theory you'd acquire the best of the 5000.

So basically if you halved those numbers, you'd actually have a much higher chance of getting half the results.

The real number you want to hit is a combined 100x your acquisition cost when you factor both STR and Avg Markup together.

So if your average acquisition price is $25, then you're hopefully selling 1% of your domains a year at $2,500. But if you sell them higher then you're ok with a lower sell-through. Like if your average sale was $5k, then you're fine with a 0.5% sell-through.

As long as you're hitting that magic 100x, then you're never really losing money after a year on the domains you bought 1 or more years before. More importantly, with your renewals costing 40% of acquisitions, this is where you'll find your long term profits as more and more of your portfolio has been held by you for over a year.


Keep in mind .. there's no interest or inflation in my calculations.

Also, I use $10 for average renewal because it's an easy number, and most domainers should not be paying more than $8.5 renewals for .com domains. So at $10/domain it's a pretty typical domainer portfolio with mostly .com domains, and a handful of .co, .io or .tv (etc) with renewals well above $10.


MOST IMPORTANTLY .. remember that most new domainers do NOT succeed in hitting 1%. Yes there's a noticeable portion of people here on NamePros who do .. but remember that the average "active NamePros poster" is losing money .. and even worse .. the average "active NamePros poster" actually does better than the industry average when considering the majority of people who quit domaining by the time their first renewal cycle hits.


Hope that all made sense! :)
This looks ok, but the big thing is that this is in theory, in practice you have the learning curve, the mistakes, the market/economy with ups and downs and lots of other variables. You need to count that the one starting to build a portfolio, will be a beginner, no matter how smart he will be. Also, if you listen to namepros experts, most names will sell for end user prices after 3-4 years, others are saying 5-10, so probably it will be hard to break even in 5 years. If you count your spent time in your math, that will take you again close to 10 years for break even. Also, if the trends will continue, in 4-5 years, you will have much more competition and a fraction of the same quality closeouts available, compared with your first year.
 
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most names will sell for end user prices after 3-4 years, others are saying 5-10,

Who is saying that? You've very likely misinterpreted what somebody said, because those numbers are very VERY wrong.

A 1% STR means each domain sells on average every 100 years! Certainly not 3 or even 10!
(ADDED: Actually, the average would be 50 years. But it means that if you have 100 domains, you'll sell one a year for 100 years)

If you're selling most of your domains after 3-4 years then you're hitting close to 25% STR (Sell-Through Rate). Even in the 5-10 year threshold you're looking at 10% STR.

If you get more expensive domains then YES .. a significantly higher STR is possible (even 10%) .. but you'd be dealing with significantly lower sales multiples.

It ends up being the same thing. Buy domains for $250 and resell at $2500 .. then you could get 10% STR because in theory your average quality of domain would be much higher. But your profits are the same after Y1. They would be higher in future years because your relative costs would be lower because of less domains to renew. but that being said, I'm doubtful you'd get that 10%. But either way that's a very different business model.
 
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Who is saying that? You've very likely misinterpreted what somebody said, because those numbers are very VERY wrong.

A 1% STR means each domain sells on average every 100 years! Certainly not 3 or even 10!
(ADDED: Actually, the average would be 50 years. But it means that if you have 100 domains, you'll sell one a year for 100 years)

If you're selling most of your domains after 3-4 years then you're hitting close to 25% STR (Sell-Through Rate). Even in the 5-10 year threshold you're looking at 10% STR.

If you get more expensive domains then YES .. a significantly higher STR is possible (even 10%) .. but you'd be dealing with significantly lower sales multiples.

It ends up being the same thing. Buy domains for $250 and resell at $2500 .. then you could get 10% STR because in theory your average quality of domain would be much higher. But your profits are the same after Y1. They would be higher in future years because your relative costs would be lower because of less domains to renew. but that being said, I'm doubtful you'd get that 10%. But either way that's a very different business model.
Misinterpreted? Not likely. It's easy to ask 10 experienced namepros members what's the average holding time for their names. So, if you acquire today 100 names you are certain that you will sell at least one of them for over 2k in the first year. You can easily count the same, compared to your experience. Did you sold at least one name for each 100 acquired, in each year, for over 2k? I'm talking with lots of domainers in private and it's in my habit to ask lots of questions, so trust me I know what I'm talking about.
Edit: I'm not saying that you will sell most of your names after 3-4 years, I's saying that the STR of 1% and over will be valid only starting with year 3-4, not in your first years.
 
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So, if you acquire today 100 names you are certain that you will sell at least one of them for over 2k in the first year.

Yes .. but this is completely different from this ...

Also, if you listen to namepros experts, most names will sell for end user prices after 3-4 years, others are saying 5-10,

More importantly, there is no certainty when you're starting. In fact, chances are much stronger that people will get 100 domains that sell far below 1%. It's the unfortunate truth that most new domainers simply don't get good enough domains to ever reach even 1%.
 
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Yes .. but this is completely different from this ...



More importantly, there is no certainty when you're starting. In fact, chances are much stronger that people will get 100 domains that sell far below 1%. It's the unfortunate truth that most new domainers simply don't get good enough domains to ever reach even 1%.
It's exactly what I was saying, that most names will start selling after 3-4, in some cases 5-10 years, not in your first year's. That means that you can use your 1% STR or higher only starting with year 4 and not from the first year, to be more accurate. For the years 1-3 probably a STR of 0.25 or 0.50 will be more accurate, if you count the learning curve and the mistakes.
 
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lol .. ok .. yeah .. that makes more sense. I thought some people were telling you that they sell most of their domains after only 3-4 or even 10 years! That would be amazing when talking about sub $30 acquisitions! lol

However .. that being said there's no reason to start buying right away until someone figures out what makes for a "1% domain". Everybody should really take their time. However .. the unfortunate truth is that someone will never know if they are good at finding 100x domains until they actually start buying. But definitely everyone should start slow and learn learn learn as much as possible before spending too much.

I just finished my 3rd domaining. I've been very disorganised and most of my domains have no landers, aren't priced, most weren't even listed anywhere. So as a result last year I did not hit 1%. But it really didn't matter because for the domains that I did sell, I averaged well over 100x .. so I ended the year with a nice little profit. (I actually just sold my first 4-figure 2020 domain earlier today .. still waiting for $$ to hit my account before I get too excited though .. lol)
 
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I see some talk of "Hold Time" which is a very important factor in the end result of having a large portfolio, I have 212 LLLL.com that i have held since 2006 to date, so you look at total investment, I currently have around $100 invested in each LLLL.com, some of the LLLL.coms may be matured out to average sales current pricing of LLLL.com , so i may be in a sink or swim situation with those??? it all depends on how you look at, the volatility of the market for LLLL.com is always a factor, but if i liquidate out i am folding on liquid assets, Not good IMO. hold and wait for less industry trading IMO.

The same can be said for tier 1 and 2 domain names, as they become harder to purchase at pricing that will substantiate the purchase for immediate good profit, they will gain traction in the end user market as more holding continues with industry trading.

The domain name industry is no different that any other industry in the fact. supply and demand along with industry trading vs end user purchase, there is no absolute calculation of being right, Investing vs capital is the equation each individual person has to measure on their own best interests IMO
"The domain name industry is no different than any other industry"....yet somehow or other, "domainers" seem to think so:xf.rolleyes:.
 
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I think that there are a few who are doing this at a pretty big scale, something like 30k domains or so. They use $1-2 to reg them, priced low xxx to low xxxx for fast sale and renew around 20% or so, just the ones with more views/inquiries or which could be more valuable in the future and drop the rest of them, sometimes even hand regging them again after couple of months. Like this you cut the expenses with acquisitions and renewals sell as much as you can in the first 13 months. It can be profitable if you know what are you doing and you are doing it at scale...over 5k-10k domains.

Actually, it can be done on a lower scale too. Whether or not it’s worth the hustle is a different subject.

In 2019 I tried the following strategy:

I acquired 230 non .com domains for a total cost of $4,000 (each under $20). And I listed them for sale in 288-750 range.

In less than 9 months I sold 16 names for $7,200 NET. So my current profit on this list is $3,200 and the first batch of around 50 names approaches renewal in March-April 2020. I will decide by then whether I should renew some domains or drop them.

I should mention that I tried to sell some at higher prices (750-900) for about a month but I didn’t sell anything and so I reduced the prices back to 499, 599, 699.
 
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Actually, it can be done on a lower scale too. Whether or not it’s worth the hustle is a different subject.

In 2019 I tried the following strategy:

I acquired 230 non .com domains for a total cost of $4,000 (each under $20). And I listed them for sale in 288-750 range.

In less than 9 months I sold 16 names for $7,200 NET. So my current profit on this list is $3,200 and the first batch of around 50 names approaches renewal in March-April 2020. I will decide by then whether I should renew some domains or drop them.

I should mention that I tried to sell some at higher prices (750-900) for about a month but I didn’t sell anything and so I reduced the prices back to 499, 599, 699.

Thanks for mentioning what became your "sweet spot" (500-700). That obviously made the difference between success and failure. I've been giving a lot of thought to the "sweet spot" for my portfolio, and I believe it's near the same range as yours. Thanks(y)
 
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Thanks for mentioning what became your "sweet spot" (500-700). That obviously made the difference between success and failure. I've been giving a lot of thought to the "sweet spot" for my portfolio, and I believe it's near the same range as yours. Thanks(y)

You're welcome :xf.wink: The lower the better, naturally (but then time spend vs profit comes into play)
 
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That is what stopped me from developing a full scale market place with my portfolio over the years, the process of creating it is very tedious to me lol, I probably shouldn't rely so much on other market places for my sales and try and absorb the 9% to 20% into my own pocket, but the market places fit my needs because i work full time outside of domaining, I plan to retire this year late in 2020 and put the family business into my sons hands, maybe i will consider venturing full time into the domain name industry, we'll see i guess
I seem to recall you're in the Music business in Texas...is that right? If so, Good Luck, and I hope you do transition into the domain industry. I think I just agreed with a statement of yours that the domain industry is really no different than any other industry, and I believe that from the bottom of my heart. If I couldn't point to a business I started from scratch, Credit Control Corporation back in 1973 that's still in business today and generating 10M in annual fee revenue, I wouldn't be speaking so boldly.

While I may be a little bolder than you (i just hand reg'd DomainPontiff.com), I do think we have way more in common than not. If you're interested in talking, send me a DM. Thanks
 
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I seem to recall you're in the Music business in Texas...is that right? If so, Good Luck, and I hope you do transition into the domain industry. I think I just agreed with a statement of yours that the domain industry is really no different than any other industry, and I believe that from the bottom of my heart. If I couldn't point to a business I started from scratch, Credit Control Corporation back in 1973 that's still in business today and generating 10M in annual fee revenue, I wouldn't be speaking so boldly.

While I may be a little bolder than you (i just hand reg'd DomainPontiff.com), I do think we have way more in common than not. If you're interested in talking, send me a DM. Thanks

Yes Sir, We have a musical instrument store, i am looking to retire and let my son take it late this year, if i can walk away from it lol, I agree, I find the domain name industry is much like any other business, that is why i will most likely really put a lot of thought into it before i consider domaining full time, their are many intangibles involved, stress, hours worked per day and all that.
 
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I am able to pick up 20 names from gd auctions with limited time, money spent. No hand regs. I at 4000+ names, more than doubled in a year, with str over 1% and price after commission over 2k

Wow, this is a huge contrast with my strategy and portfolio. To be honest, I wouldn't have the bottle to hold a portfolio of 4,000 with the renewal fee of $30,000 or so per year hanging over my head. However, you obviously have a good eye to grab some decent names if you're making a healthy profit every year. I guess it takes guts to take the plunge in year 1 and see the results, once proven you have the confidence to scale up.

Just out of curiosity, how long did it take you to build up a portfolio of 1,000., then 2,000 and finally 4,000 names? Also, how many premium domains (liquid reseller value in the $XX,XXX range) do you have in your portfolio if any?

Arfy
 
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@Ategy your financial and statistical calculations are highly nonconventional ))) 1/100 chance to sell annually is certainly not the same as each name selling in 100 years on average. That is not how probabilities work.
 
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