When I tell people my company owns around 500 domain names, some people think this is a huge number and others are surprised my company owns so few domain names. Compared to other pros in the domain investment space, this is a relatively small number. This number is actually higher than it was a couple of years ago, as I began an attempt to alter my business by increasing the size of its domain portfolio. This hasn’t worked out as ideally as I thought.
After seeing several larger portfolios change hands during the last few years, I thought about growing the size of mine. The thought was that if I could turn my portfolio into one with 25,000 + domain names, I could sell it for tens of millions of dollars. I already had a good number of high value domain names (one worders and three letter .coms), and I could spend money earmarked for individual high value domain names to acquire tens of thousands of minimum bid expiring domain names at auction and hand registered domain names. That was a fleeting thought I had anyway.
This didn’t really work out for me though.
Buying thousands of domain names proved to be much more difficult than the model that has worked well for 10+ years. To alter my strategy, I would need to be somewhat less discriminating about the domain name I purchase. I would need to be more active in auctions and target far more domain names. I found that this was a major challenge as many names I thought I could buy for under $100 were selling for much more at auction. It was taking a great deal of time to find good values. At the rate I was going, bidding on auctions was not going to get me to 25k domain names very quickly and it would be very expensive.
Hand registering domain names that will have value to others is not an easy business. I would occasionally find pockets of names I liked, but the fact that there wasn’t going to be an immediate payoff was challenging. Perhaps I was buying good names that would sell in the future, but maybe I was buying junk that I convinced myself would sell in the future. Sure, they could be valuable to someone in the future, but I could also be throwing good money after bad money. I tip my hat at people who have the ability to consistently hand register and resell desirable domain names. Doing this repeatedly is not easy, and I have not had much luck.
One of my weaknesses is that I am impatient. I don’t love the idea of buying names knowing that I will be sitting on the vast majority for years (or forever) without selling them. That is part of the “numbers game.” Some people say that large portfolios have 5% or less turnover each year. For my business, I have been selling at a far higher percentage. I also like to buy names I know are worth something rather than speculating and hoping someone else will want to buy it. The numbers game doesn’t work for me, and it would be very difficult to grow my portfolio to the size it would take for a big portfolio sale.
Ultimately, I have decided to keep doing what has worked for me for 10+ years. I will continue to focus on buying higher value one and two word .com domain names along with the occasional 3 or 4 letter .com domain name. I will sell when fair offers are made and continue to grow my portfolio in strength not size. It was fun to see if I could grow my portfolio, but I have since realized that isn’t as enjoyable for me nor does it play to my strengths.