I'm seeing a lot of back and forth in this thread about how domain investors not only shouldn't develop, but that they are no longer domain investors if they did develop, which, in my opinion is simply not true.
I'm a domain investor and an end user. I've developed domains off and on since 2004 into revenue streams, micro-businesses, splash pages, landing pages, etc... (My primary end-user business model (Currently an LLC) has been an online developed service for 2+ decades) Even though some of my business models change over the years, it doesn't make me any less of a domain investor than anyone else.
For perspective, here's how I like to break it down:
- Reseller: This is a domain investor with no intention of developing. They generally park or use a landing page of their own to resell a blank canvased domain for a profit, either to other resellers, hobbyists, or end-users. These investors hand register, pay wholesale, or aftermarket pricing to lower the risk and increase profit potential. (Smallest budget)
- Hobbyist: This is a domain investor with intent to develop an asset themselves to increase value and provide a means for a domain to pay it's own renewals each year, eliminating renewal overhead expenses. This type of investor tests different markets with developments until they find a sweet spot, in which they expand development, optimize monetization efforts in a few different verticals, resell domains or domains + websites with verifiable traffic/revenue/etc., monitors the aftermarket, and pushes forward into entrepreneurship. (Mid-Budget)
- End-user: Contrary to popular belief, this is also a domain investor (They can be independents, partners, entrepreneurs, small businesses, large corporations, non-profits, or even government agencies). They invest in a domain name asset to develop for the purpose of generating revenue or delivering an important message to an online audience/customer base. Every hour and penny they put into that domain names development is still an investment into their digital asset (property), increasing the value, and potential. Most end-users have no intention of reselling a domain asset, however, it does still happen as part of company takeovers and acquisitions. (Biggest Budget)
All three categories above are still domain investors, each with a different budget, business model initiative, and end game goal.
I still stand by my previous comment and assessment that while a domain investor doesn't need to develop, understanding the core elements of business development and how an end-user can generate revenue from a domain name you are considering investing into (Or already own) can help assist with evaluating and pricing domains more effectively.
There's nothing wrong with taking a domain sitting in your portfolio collecting dust and developing into something to try and generate revenue while it sits. (That doesn't make you less of a domain investor, but it does make you more of a domain investing entrepreneur.)
Could it deflect a few potential buyers thinking the domain may not be for sale? sure, but most the buyers being deflected have smaller budgets or going to kick your tires. A serious buyer, will still contact the owner of a developed business to make a genuine, higher budget offer.
We see acquisitions like that all the time in this industry, where an established business buys a domain and business model + branding of a smaller business, then strips all the branding and redevelops the domain into something else.
In short, I think it's more probable that a developed domain scares away tire kickers and smaller budgets, but has no effect on start-ups and existing corporate with the capital to build or expand a brand overnight. (This is where your domain really needs to be higher quality to attract those types of bigger budget buyers)
I feel like this industry should have more open minded entrepreneurs than it does. (E.g. those that invest in domains for resale and for development, both still technically being domain investors, just with different overhead costs and end game goals)
To each their own.
What works for one may not work for another and vice versa,
What ever everyone decides to do and how they invest into domains names, I wish them the best of luck. We all do it differently.
