When people ask what I do and I tell them about my involvement in the domain business, many people ask me if it is similar to what GoDaddy does. I find the question interesting because it shows just how much name recognition the GoDaddy brand has. I also find it interesting because people seem to genuinely want to know what investing in domain names entails.
I thought I would share how I explain what I do to make it more simple for people to understand domain name investing. My explanation typically goes something like this:
I buy great domain names from people who didn’t want them or need them anymore. Sometimes I buy them directly from the former owner and sometimes I buy them at auction.
After buying these domain names, I either build a website on them, monetize them with advertising links, or I attempt to sell them. For the most part, I have ads on them with a “for sale” link at the top so people who want to buy a domain name from my company can easily inquire while others who visit can click on relevant links that will generate a small amount of revenue from my business.
The domain investment business is a bit like real estate without a MLS. My “edge” is having expert knowledge of the market value of domain names, which allows me to buy domain names for good prices. Unlike real estate, the holding costs of a domain name are minimal, especially when compared to their value and cost.
Although many of my investments are speculative, I am buying them with confidence because I know the market. I am generally confident that at the very least, I will be able to sell the domain name at auction or to another investor at cost.
Many people I buy domain names from have owned their domain names for a long time. They sell to me because they are happy to turn their domain names into cash. I pay quickly and I help guide them through the process. Essentially, I can turn an asset that is illiquid into cash that can help fund their business or some other aspect of their life.
People seem to find this business to be fascinating. It’s not necessarily an easy business, but like everything else, with good experience and knowledge, it can be a profitable endeavor.