discuss Should a domainer develop part of their portfolio?

[garptrader]

Domain investors acquire domain portfolios with the goal of selling them at an attractive ROI. Given that most end users are not willing to pay premium prices for a domain name and supply greatly exceeds demand, industry portfolio turnover tends to be around 1%. Thus, a 300-domain portfolio over eight years might result in 25 sales. Most domains that are worth renewing for eight years are generally not acquired for $10. They are normally acquired via research plus backorder or a domain auction or via aftermarket purchases. So after renewing nearly 300 domains for eight years, the investor has a considerable sum invested in their remaining portfolio.

Could portfolio returns be enhanced via development? How does the risk / reward of development compare to domain acquisition and resale?

 

[namezest]

IMHO it is a recipe for disaster if you do not develop the best names you have.
In doing so you may find a site makes more than you could have ever hoped for from (re-selling) domains alone. It is all a risk but if you take none you will never know. Trying just with domain names alone is doomed to fail Unless you are extremely lucky.

 

[Justin Matmor]

Given that most end users are not willing to pay premium prices for a domain name

I disagree.

End uses will pay anything for the right domain...however you need to find them. Other domainers are looking for bargains, not end uses.

 

[Impaler The Vlad]

IMHO it is a recipe for disaster if you do not develop the best names you have.
In doing so you may find a site makes more than you could have ever hoped for from (re-selling) domains alone. It is all a risk but if you take none you will never know. Trying just with domain names alone is doomed to fail Unless you are extremely lucky.

OP is correct. The cost of holding on to an expensive large portfolio can remove any profit from one or two great sales.

Likewise even "developing" your best names most likely result in failure. These days the competition and saturation for a popular search term is too great. It would consume anyone's time and money even for just one name much less several to develop.

Best senerio; spend the most money you can afford on getting a great deal on a one word killer .com

Then develop it with the least amount of cash but spend the most of your time keeping it updated and relevant "every day".

A great name will hold its value especially if it's the best name/brand. If you can find a revenue stream from it, it will only become more valuable and maybe even pay for your livelihood.

 

[Kate]

Developing names is a totally different business. While many domainers must have some webdesign background/knowledge, not everybody has the right skills. Of course, everybody can throw up a wordpress template and you're ready to go. But you still need quality contents.
It's true that the effort involved will not always reap the expect benefits.
Also, if you depend on advertising for monetization, this is still PPC and not much different than parking. Unless you run a popular, high-traffic website, you are just going to get a handful of $0.20 clicks here and there. That makes no difference to your bottom line. How many bloggers are making a living blogging ?

What you should be doing is running a real business on top of a website, not a crappy wordpress site among billions of others, hoping it will blossom into a business by magic.

PS: I myself develop less than I used to do, because I lack the time, and I have a 'real' day job (not domaining).

 

[garptrader]

Serious development (not static minisites) can involve considerable time and resources - not something which can be done with hundreds of domains. But there does seem to be more willingness among end users to pay for website development than there is to pay for aftermarket domain names.

 

[DU]

Serious development (not static minisites) can involve considerable time and resources - not something which can be done with hundreds of domains. But there does seem to be more willingness among end users to pay for website development than there is to pay for aftermarket domain names.

There is a willingness for people to spend more money at a restaurant eating a well cooked meal than for a recipe too.

As I say over and over and over and over. Most businesses do not need expensive names, or even relatively cheap names. A good functional website is useful. Some of the biggest companies in multi-billion industries have terrible domain names but it doesn't matter because they've done the rest of their marketing right.