Is it possible to be a profitable domainer with a very small portfolio?

I’ve dabbled around with domains for about a decade, on and off. I treat it as a hobby and, like many here, have a professional life outside of the domain industry. As such, I can be very relaxed about my frequency of sales and even my profit margins – I simply treat it as a modest, second income.

As a result, my “portfolio” of domains is tiny by most domainer’s standards. I rarely have more than 15 domains, peaking at about 20 from time to time. At the moment I think I have 9.

However, the domains I do have tend to be of a relatively high quality (previous sale history, aged, common, positive one worders or 4L brandables, limited to only the most popular extensions).

But is this a viable model if domaining was any more than a hobby? If I wanted to derive a more meaningful income from domains, is the only option a large portfolio with a wider array of names, working on the seemingly standard basis of only selling a tiny percentage every year (reg and veg 🤣)? Or do some of you make a living from domains with a very tight portfolio focused on promoting and selling a few domains at a time?

 

Generally speaking, domaining is number game. The more domains you have, the higher the probability of have a sale. On the average.

 

I find its better to have a smaller portfolio of quality names, rather than loads of average names. The profits are higher too with smaller portfolios because you spend less yearly on renewals.

People think the more names I have, the more I will sell. It doesn't work like that, unless of course you have deep enough pockets to buy 100's of quality names which 99% of people here dont.

 

It's possible but you have to own consider able number of quality name which constantly receive offer and you also need to sit on names for longer than usual domainer.

 

It does work like that. Law of probability. The law of large numbers.

I don't have large portfolio, so I can only base my judgment on what I've read, heard and seen. And the verdict is that most successful domainers have large portfolio. By large I mean from 1000 domains upward.
I will believe you if you can show me at least one successful domainer with tiny portfolio - regardless of the quality of the domains.

 

In terms of the title, I would answer that it is certainly possible to be profitable with a very small portfolio, especially one with sound acquisition choices. The idea of profit as in making more than your costs does not scale with portfolio size to me, and there are advantages staying small in terms of lower annual costs and knowing your portfolio really well.

Now I notice that your post also mentions that domaining has been a hobby for years, but now you are now wanting it to be more than a hobby and generate income. You could still stay very small, but if you are depending on it to generate regular income, the long holding times of most domain names, may make the income too irregular if your portfolio is very small. I think that is why most who depend on it for income do have usually thousands of names.

That said, some highly successful domain investors don't have many I think. If I recall correctly, I think Michael Cyger indicated in one of his presentations at NamesCon that he has about 40 names and he has had a number of significant sales. So to me it depends on how much income and how regular you need. If you sell on payment plans, the income could be regular even if the sales are only every now and then.

Best wishes whatever you decide @whenpillarsfall . It is a very good question.

Bob

 

For example?

 

I gave one in the next line after the one you quoted . Anyway, you are probably right that I should not have speculated on that. Thanks.

I suspect there are not many with less than 50, but many at less than 500 I would guess. But it depends on what you mean by highly successful. I define that as a profit, not an absolute amount. Others might view it as an amount per year. But as you suggest, I am not really sure.

Bob

 

A lot is going to depend on what kind of seller you are. From my experience when holding 2000 domains all my sales were passive. I really didn't have the time to outbound. so virtually all sales came from inbound (No domain privacy back then) or from Sedo. Now I'm at just 130 domains, I actually enjoy selective and targeted outbound.

A small portfolio does allow (almost requires) you to put in that extra work to keep sales turning over. I'm sorry but I personally can't even think of less than 50 domains as a workable amount even for outbound. Just as a comparison I once collected good second hand gold watches but even at 10 or 12 watches I didn't consider myself a collector, just a side-interest. And to be honest that is where you are with domains. You'd need to hold 10 to 20 really good top notch domains to consider yourself in this business in a serious way, 200+ for above average domains. And at least 1000+ for a mixed bag of holdings to be hitting that 5 to 10 or so sales (passive) each year you probably require to cover your costs, Any additional sales being a bonus.

Obviously this is just from my own experiences. The nice thing about holding around a 100 there's no pressure. My sales tend to more relaxed and often more fruitful and of course easier to hold-out on price

 

@BaileyUK with 130 domains are you making living out of domaining and you're in to full time domaining?

 

A lot of great sense in @BaileyUK response in my opinion. I found this insight resonated in particular.

I think in this an other ways if you really know your portfolio, it makes a difference in how you can and will interact with it. To me his idea that with a number of the order of a few hundred allows you to do that makes perfect sense.

I am not disputing that larger portfolios are necessary for most investors depending on domains for a large part of their salary, but it seems to me that the majority of NamePros members fall somewhere in the side-gig category.

Thanks for well-written contribution.

Bob

 

I love this topic. Keep the responses coming.

A question on my mind: for newbies, what number of domains can one say is a good enough to maintain a lean portfolio but still have some sales?

 

No not at-all these days. I've been well Stripped (mostly sold, some dropped) of all my best domains over the years. I started in domains in 1999 , actually had been thinking about it for years before then but, the cost was a fixed $70 for a .com registration back in 1996/7 (a hell of a lot of money) .I peaked at around 2100 domains in 2007. Obviously with hindsight I wish I had taken the plunge earlier and got my hands on some category killers.

My experience has taught me just how 'Scaleable' The whole domain thing can become. By that all the key elements of domaining become exponential. Everything can get a bit out of hand. For me the income isn't there any more but neither are the pressures and above all I have free time back in my life. When your managing a large portfolio, trust me it follows you everywhere - Vacations the whole lot, and of course your next domaining moves are in your head from daybreak till bed, and even in your dreams

Time and management, costs, offers and sales, Yes it did become a full-time job and income to an extent that my wife had recently died (2007)This left me financially secure but with No direction (My Sue had handled all the paperwork)

I knew around 2013/14 I had to take things back to a hobby stage. It just takes a lot of time to scale things UP. And from my experience it takes equally as long to scale things Down. I don't particulary regreat anything I done with Domains - Apart that is from some of my own domain sales that are now at the top- of-the-tree as far as websites go . Can I go back and reprice them Please .

The income element becomes quite fragmented as well, some years I was well-up. and I do mean big numbers but, other years especially when I sat back dropped to just managing renewal costs and some years not even that

 

PS to above - had a couple of really good domains stolen out of my Netsol account in the early 2000's But, that's another story. Yep they were finding their way to China even back then, never did get them back. Netsol didn't give a damn.

Silly me paid their $70 fees thinking they would be more secure. It does cross my mind from time-to-time to expose the domains , but I'm not so sure.

 

It all depends on your focus. If you do your research well to pick only quality domains in high demand probability, then it won't matter if your portfolio is small or large.

 

I'm thinking ones ability to acquire the domains cheaply(auctions, coupon tricks etc) also plays a part

Research as Oskaaay said and in my opinion creativity and individuality in choosing original names helps