If I started off again I would probably focus on fewer domains but better, had a decent logo designed for each (i.e. make it a brand) with stationery designed too and probably formed a limited company for them. You know, less domain, more ready-to-trade brand off the shelf. Then create a small marketplace website where people can buy them. Would it have worked better? Who knows. Back then it was less about brands.
What I think are some of the big mistakes newbies make are (whether to develop or not..):
1) Get worked up at auctions. You know, happen to find a listing with only a few hours remaining some times only 30 minutes or less... sometimes if you overbid and win on ebay, you just need to fail to pay for it, make some story up and agree to pay the seller for costs to relist (usually free now anyhow). Following through is bad. Sometimes you just need to let it slip through the net if you are a newbie. Also, not to forget you are not bidding up to the value the domain is worth... but trying to get it much cheaper so you have a margin... the domain price can easily go up as well as down...
2) Buy concepts. Don't take suggestions of what the domain could be used for, don't let someone sell you potential usage and assume value by it.
3) Buy market share. Don't let it affect your judgement of getting just 0.1% of a multi-billion dollar industry. Its not as simple as it might seem. Besides buying a domain name for a business is just a single expense and not one of turnover let alone profit.
4) Buy domain, get bespoke script, get free hosting. I actually made this mistake myself once. It was in effect an early paypal clone... I searched a while finding out whether its just a script or fully bespoke... seemed to be bespoke... obviously intended to transfer out once up and running.. as needed dedicated hosting for it not 6 months free on a reseller server quite expensive after the 6 months, had full control over the domain... gave it a month to setup so I can transfer with little downtime... was conscious that perhaps the seller could pull the plug in a few months... but in the third week the site and seller vanished... never got round to backing it up to port across. He didn't send me the script as he said he would at the time of purchase.
I obviously paid about double what the domain name was worth to get the script to save the hassle... and of course the dedicated server... in the end it ended up costing me! I remember letting the domain expire, didn't bother selling it just wanted to wash my hands of it and move on and used the server for something else which did well and balanced out the loss.
It was a very good domain name but really don't pay more than the domain name itself is worth - even if you get the script/files... as you would have to put time and money to make it a success anyhow.
5) Buy flipped websites. Don't bother buying domains with silly websites hosted on them to give them a chance of being sold. There are a few exceptions, but even with the "bespoke" websites, its usually an open source script or "nulled" premium script, and nothing is all what it seems. For instance, simply importing the same database of quality data again (duplicate issues) or cloning forum communities where overnight everyone appears to stop using the website.
There is value in buying a genuine established website but in a similar way to a business, when people have put so much hard work into it they will be asking top dollar for it usually overpriced at first.
6) Buy the wrong singular/plural domain. Tricky one, don't buy the wrong version! Some plurals are worse than the singular version - and others vice versa. The inclusion of or absence of an 's' can affect value significantly.
7) Buy trademarked names. Buying a domain of company name + word ... or company name of an unregistered extension isn't going to make you rich. Any company would rather give all their money to a lawyer than pay you handsomely for the privilege of you holding on to your domain with their company name in it for a registration fee. Many companies wont even pay you for it with goodwill (i.e. reg fee plus $1000).
8) Domains are like consumer electronics, easy to sell. Domains are easy to buy when available but harder to sell. If you want top dollar you must be prepared to hold out. If you have cash flow issues and need to sell a domain you will need to compromise of letting it go cheap.
9) New domain name extensions are opportunities. Don't attempt to waste good money on pointless domain extensions that wont ever become popular and typically expensive to register.
10) Once you have a domain, its yours for life. Don't forget domains expire! You should always add a few years on your really good domains... encourages people to buy rather than try to back order. All registrars have auto renew now on an opt-out basis so less of an issue, but likewise, make sure you don't renew weak domains (especially expensive extensions, or those you purchased on offer in bulk!)
