Is Domaining basically one giant pyramid scheme?

[domainsoup]

Been in the domain game for a while now.
People are sold the idea that getting the right domain can make them a lot of money. This idea is largely false as the majority of good domains have already been registered. People get lucky very rarely with a handregistration. The success stories are told over and over. But for each one there are hundreds of thousands of ones that go nowhere.

OK now on to how else to get a good domain. Drops and expired auctions. Entire industries have been setup for this. But guess who makes the most money on this? The companies that sell peoples expired domains after collecting renewal fees (double dipping). The auctions are either inflated or not representative of the actual price. There have been many times I've purchased at auction at domain with like 200 bids and sold for 800+. Then you list it on Sedo. And you get people offering maximum $100 paid. Most times these people cancel the negotiations even if you price it at 1000. So 20 bidders bid a domain up to 800 at auction. And the most you are offered is 1/8th of it? Companies like Godaddy are making a killing. I don't know if they are shill bidding but someone is willing to pay 790 at auction. But no one is willing to pay more after?

Domaining is largely a pyramid scheme. Why? Because the people that make the money have largely all been decided. There will always be success stories. But the majority of people who enter it fail. The big companies make all the money. And they sucker the average joe into believing a dream that doesn't exist.

It's like a lottery. The guy with the winning numbers is happy. But everyone else loses. Yet people get hope because of the story of the guy who won.

 

[NetworkPearl]

I smell illuminati

 

[JB Lions]

Been in the domain game for a while now.
People are sold the idea that getting the right domain can make them a lot of money. This idea is largely false as the majority of good domains have already been registered. People get lucky very rarely with a handregistration. The success stories are told over and over. But for each one there are hundreds of thousands of ones that go nowhere.

OK now on to how else to get a good domain. Drops and expired auctions. Entire industries have been setup for this. But guess who makes the most money on this? The companies that sell peoples expired domains after collecting renewal fees (double dipping). The auctions are either inflated or not representative of the actual price. There have been many times I've purchased at auction at domain with like 200 bids and sold for 800+. Then you list it on Sedo. And you get people offering maximum $100 paid. Most times these people cancel the negotiations even if you price it at 1000. So 20 bidders bid a domain up to 800 at auction. And the most you are offered is 1/8th of it? Companies like Godaddy are making a killing. I don't know if they are shill bidding but someone is willing to pay 790 at auction. But no one is willing to pay more after?

Domaining is largely a pyramid scheme. Why? Because the people that make the money have largely all been decided. There will always be success stories. But the majority of people who enter it fail. The big companies make all the money. And they sucker the average joe into believing a dream that doesn't exist.

It's like a lottery. The guy with the winning numbers is happy. But everyone else loses. Yet people get hope because of the story of the guy who won.

It's not like a lottery. Just because you aren't doing good with it, doesn't mean everybody else is as well. It reminds me of affiliate marketing is dying threads on forums, when it's usually just dying for the thread starter. People do make money with this, many do this for a living. The majority fail because they just pick bad domains or don't study the market. Just buy better domains.

 

[vicky4712]

No,this is not a pyramid scheme.Pyramid/ponzi schemes are completely different,which generally exist in network marketing businesses.This is a type of investment business where you're the owner of a digital property i.e. the Domains.Just like you invest in other commodities such as real estate,stocks,mutual funds,gold,silver etc. The value of your domain names depend upon the quality of domain names you own.

 

[LaunchUp.com]

I don't base a domains worth off what someone payed for it at an auction or how many bids it received; I value domains based on it's brandability; how solid or realistic is it to be used as a company name/idea. That's why when I get sales it often ends up being used by a company or non profit like Classbook.org or ClassTag.com(Brands I hand registered and sold). Names that might not have even been given a good appraisal hereon NP.
For auctions, If I see a name with 20 bids and I can't envision it being used as a company then I could care less. So that is why you are disappointed, you don't buy names with a vision in mind. You assumed it's worth based on someone else's bid. You have to develop your own eye for value. I don't get a ton of sales but i believe in the names I buy, because there is a clear idea behind every name and when i do get a sale it's usually a startup.
And of course they are some names meant for only trading between domainers. And they are flaws that I see too but that's a whole other topic.
So don't give up. Yes food.com is gone but new ideas and companies are birthed every day. You might just have the name for that new idea or company. It can take patience though. And I am still learning. Learn from other domainers but don't be boxed in by anyone. @domainsoup

 

[domainsoup]

You may need to rethink your game.
If you have good names, you will make money. If your names are lousy, you will make nothing.

As for keyword domains, if you have bankloans.com, vegashotels.com, dogtraining.com, you will make money, good money.

VegasHotels - Reg 1997
BankLoans - Reg 1997
DogTraining - Reg 1996

"Re-think your game" meaning a time machine?

 

[Dondomainer]

If you have not made some money with domains is because :

1 ) You own garbage domains.

or

2 ) You have very bad luck.

 

[dordomai]

if you are conservative and patient you can make some money but it's not easy. The real money is in investing in a big future trend before it happens. That's not easy and you might need some luck. Also few opportunities like this in the past decade. Numerics, exatch match, type-ins,chips, 3L etc. would have all made you a fortune if you got in early.

Some established brokers make a lot of money too. I think some folks with experience make a good living doing it but they got in much earlier than you.

If you don't like domaining and you are doing it to earn money there are probably better ways to spend your time. If you work very hard you might do well but then you might do equally well in other fields too.

The advantage of domaining is that the barrier of entry is very low and in theory there is no limit how much you can earn but that also means that there is a lot of competition and there is no minimum income that is guaranteed. Many lose money domaining. It's not getting easier.

 

[Templr]

Hello, welcome to planet earth. A place where achieving success takes knowledge, determination, focus, and a lot of hard work.

lol Yes, but it is off topic.

 

[domainsoup]

If you have not made some money with domains is because :

1 ) You own garbage domains.

or

2 ) You have very bad luck.

How much is 'some money' to you?

Everyone can make 'some money'. But the bulk of the domain names that are fetching XX,XXX+ were registered a loooooooong time ago.

Yet people are sold on the dream of getting those sales. Which is simply not a reality for most domains today. Early adopters for some single word+GTLD might make something but once you consider how much premium they paid to get it, or how many people they had to outbid, they might never make their money back.

GTLD's are sold on these boards as boosting the .com values but that is incorrect. It gives people so many options it is no longer possible to justify premiums being paid on very decent .coms. The value of superb catergory killer .coms might go up slightly but those are all long gone. Therefore the majority of people participating in domains lose.

 

[dordomai]

How much is 'some money' to you?

Everyone can make 'some money'. But the bulk of the domain names that are fetching XX,XXX+ were registered a loooooooong time ago.

Yet people are sold on the dream of getting those sales. Which is simply not a reality for most domains today. Early adopters for some single word+GTLD might make something but once you consider how much premium they paid to get it, or how many people they had to outbid, they might never make their money back.

GTLD's are sold on these boards as boosting the .com values but that is incorrect. It gives people so many options it is no longer possible to justify premiums being paid on very decent .coms. The value of superb catergory killer .coms might go up slightly but those are all long gone. Therefore the majority of people participating in domains lose.

according to escrow.com domain values increased 7% over the past years. So they do in increase but not that much to justify investing in them. You would have to invest a large amount of money and take somewhat high risks to make a living from price apprecation alone.

 

[Recons.Com]

I sometimes go into the two threads here on forum, hand reg of the day, snap of the day. Those two topics demonstrate that most will never make any decent profit from doing this, as regardless of time passed and registration deals garbage in is always garbage out...

And, yes, somebody already should sue Estibot for misleading thousands of people to think that most of that trashy misspellings and unmatchable word+words or word combos with no real commercial use have values in x,xxx or higher.

 

[Ali]

lol Yes, but it is off topic.

Is it though?

The OP states:

There will always be success stories. But the majority of people who enter it fail.

Failure is not a random act of the universe, or some big pyramid scheme.

If you fail, that means you came across an obstacle... one which you couldn't find the will within yourself to overcome. Period. It's nobody else's fault.

 

[Recons.Com]

Failure is not a random act of the universe, or some big pyramid scheme.

If you fail, that means you came across an obstacle... one which you couldn't find the will within yourself to overcome. Period. It's nobody else's fault.

From now on, I suggest that Zenmaster and Zandmaster are used interchangeably ))

 

[Ali]

From now on, I suggest that Zenmaster and Zandmaster are used interchangeably ))

Haha!

 

[Templr]

Is it though?

The OP states:


Failure is not a random act of the universe, or some big pyramid scheme.

If you fail, that means you came across an obstacle... one which you couldn't find the will within yourself to overcome. Period. It's nobody else's fault.

True that Op has a few points being raised, you're right. You need those walls in life to keep climbing

 

[Dondomainer]

How much is 'some money' to you?

Everyone can make 'some money'. But the bulk of the domain names that are fetching XX,XXX+ were registered a loooooooong time ago.
.

How much is 'some money ?

Each loss is for me a source of knowledge, It's like when you pay for a online course, but ..


Earnings are in proportion to :

1 ) Ability to obtain information, process and react, but especially be creative. ( 50% )

( Only applies to generic names )

You do not create a word, you create a business ( even before they happen ) according to very little information and a lot of creativity.



2 ) Money invested ( 45% )

If you have the above ( 1 ) and money, then your odds are high, note that :

money + creativity = success

you need creativity even if you want to capture "premium" domains, because you run the risk of freezing a lot of money.


3 ) Lucky. ( 5% )

Luck is always involved.

 

[tomcarl]

eh, tough racket, you win a set of steak knives.

 

[frank-germany]

domains that are "crap" today maybe valuable tomorrow
most domains I sold made no parking income
most domains I sold I had registered from drops
6 or 10 years ago or handregeged them

just recently I started to pay money for domains

so when you got a LLL.com in 1997
when did you sell it?

at $200 - double your money?
at $2000
or did you reject the 10k offer?


then you made money by now
but only then

and in 1997 they would have told you it's crap

don't listen
think

 

[Cdomains]

I sometimes go into the two threads here on forum, hand reg of the day, snap of the day. Those two topics demonstrate that most will never make any decent profit from doing this, as regardless of time passed and registration deals garbage in is always garbage out...

I think that every time I look at those threads. Seems no matter what you write about the subject on this forum or how much excellent advice can be found here, people still don't get it. It truly amazes me.

 

[168]

@imadoer - Yes some people do make money out of domaining and thats great. But to the rest of us in the industry - when we try to sell it - we dont find any users and its usually through some intermediate - who wants to get the domain cheap and then earn money by reselling it at a higher price. I have posted numerous keyword domains - aged domains - but most are interested in paying you say low rates - say $1~$10. Once in a while you may be lucky enough to get some rare offer at a higher price but all these are reseller rates. So in the end say me having around 100 domains each year am just paying renewal fees and developing a domain at a time. Have tried listing on @FlippaDomains / @NamePros and each time its all low low offers in the above range I mentioned. And suddenly you hear some odd domain being sold at XXXX rates makes me really wonder if really domains sell! Actually I even have my signature with the same line - Do Domains Sell? I don't think so! When users here talk of big numbers my only message has been - I have many keyword domains - sell me one domain I have and take a percentage out of it - and you wont believe no one has ever responded to that!

we dont find any users and its usually through some intermediate - who wants to get the domain cheap and then earn money by reselling it at a higher price. I have posted numerous keyword domains - aged domains - but most are interested in paying you say low rates - say $1~$10. Once in a while you may be lucky enough to get some rare offer at a higher price but all these are reseller rates. Have tried listing on @FlippaDomains / @NamePros and each time its all low low offers in the above range I mentioned

hn, I see 2 locations here. NamePros and Flippa.
No mention of outbound efforts to end users.
Each platform has it's strengths and weaknesses. Could be for the type of names you have your in the wrong platform for the value your looking to get. Research more platforms to see if they are selling your type and for how much. Do any near comps meet your bottom line ? If not be prepared to hold. It's part of some of the big payoffs your seeing. 3-5+ years. If hold just isn't in your strategy then sell, cut your loss or drop.
List the types of companies that would use your name and email them! Worst case no response. Then follow up. Then move on. Then follow up again. You could even get a call weeks or months later you'll never know until you try and keep trying again and again and again. They will sell. Discipline (daily investment of time). Patience (lots of it) Consistent effort.