For the past few years, my primary source of revenue has been domain sales. Lately, with domain sales lower for me in the last 10 months or so, I have turned to development to generate revenue. I’ve been building out websites, testing ways to monetize websites and domain names, and selling advertising space on my blog and my developed websites.
Although the “easy money” (if you could call it that) is no longer coming in via domain sales, I think this will turn out to be my most successful year. Sure, it was fun working less and enjoying life more last year and the prior year. However, it wasn’t nearly as fulfilling as doing what I am doing right now. I’ve used this past year as an opportunity to learn about web development, marketing, sales, social media, and a whole bunch of other things I hadn’t paid much attention to without a true need to do so.
Just about anyone can sell a good domain name if the price is right. The challenge is to be able to increase the value of your domain assets during difficult times. The most obvious way to do that is to increase revenue and traffic, and that is done with development (unless a big company names a product/service after your domain name and decides to pay you a bundle – much like winning the lottery, this happens infrequently).
If you are just getting involved with domain names, I hate to say it, but the easy money isn’t here right now. I do think we are still in the very early stage of this business and domain values haven’t peaked, but I caution anyone who is coming in here to make a quick buck. You need to have a longer term strategy carved out before you spend money aimlessly. Back in April of 2008, I posted my 5 year plan, which is always evolving depending on what deals come up, but I always do what I can to stay on track.
If you are just coming in to the domain industry, I recommend that you create some goals and write down how you will achieve them. The low hanging fruit isn’t really there to be picked any more, but there are plenty of ways to become financially independent from this business, but you need to stay focused.
Another great post, Elliot. You are a real role model for others. I especially like this part: “an opportunity to learn about web development, marketing, sales, social media, and a whole bunch of other things I hadn’t paid much attention to without a true need to do so.”
Keeping up with these practices is essential if you are growing a business online in an ever changing environment. As a marketing guy who has waited years for domainers to embrace marketing, it’s also great to see geo owners connecting with sports events, driving branded vehicles and using Twitter and Facebook to connect with communities. All of these efforts WILL pay off.
Investing in domains now requires a much more thorough analysis and long term strategy plan. It’s no longer a simple lazy man’s way to riches deal, unless you are fortunate enough to own extremely high end one word domains which have thousands of daily type-in visitors.
You have to understand how to grow traffic. You have to put the work into creating content. You have to deploy a variety of monetization platforms. You have to have the know how and closing skills to sell advertising directly to companies. You need a solid management system or team in place to effectively manage the logistics of operating hundreds or thousands of sites. You have to keep every component in the process as cost effective and logistics efficient as possible so you can generate profits.
It’s important to realize with every domain purchase you make going forward, there is going to be an additional cost to build out the domain. So even with a reg fee domain, it’s no longer just a $7 investment, it’s now going to be more like a several hundred dollar investment at the minimum, when you factor in the future dev costs.
It’s an unreal amount of work. You can’t even imagine how much work it is until you start doing it. And you have to stay on top of all the new things that come out daily related to every aspect of the dev and site management process. It literally never stops. And some new stuff is great, most of it sucks, but you have to experiment with all of it regardless to see the performance and capabilities first hand. Sometimes something new just needs additional engineering to make it a good thing for your network.
Much more knowledge, skill sets, and above all patience is required to be a successful domain investor in this new era we’ve entered this past year.
One more piece of advice and the most important of all is KEEP YOUR MOUTH SHUT & STAY STEALTHY with your ideas and sources! It’s fine to share some knowledge and help others. I do that as much as possible, and more than I probably should. But don’t give away your entire ship of knowledge, and none of your newest knowledge. Never forget how hard you worked to learn that knowledge.
If you don’t do this you will be devoured by the shark competitors in our industry. They will take your ideas, your methods, and anything else they can grab, exploit them for their own profit and not even say thank you.
“One more piece of advice and the most important of all is KEEP YOUR MOUTH SHUT & STAY STEALTHY with your ideas and sources! It’s fine to share some knowledge and help others. I do that as much as possible, and more than I probably should. But don’t give away your entire ship of knowledge, and none of your newest knowledge. Never forget how hard you worked to learn that knowledge.”
This is great advice, and something I have trouble doing 🙂
Have you guys even looked at the drop lists lately? They are FULL of great domains you can buy $100 to $500 that would have cost 2K to 4K a couple years ago.
If you really want to step up and spend 1,500 to 2,000 more or less you can find domains that will pay for themselves in two years.
Try that in real estate!
I’ve been dumping nonperforming domains and loading up on good ones.
I hate to say it, but I am still not sold on development. If you are developing you don’t have the time to correctly study domains you want to buy. That means someone else is getting the deals.
The power is IN the domains. Outside that, you have to “invent” it. That traffic can disappear, but if you OWN the traffic you don’t have to worry about development.
I’ll admit though, I don’t think a newbie could do what I do. I’ve just been at it for too many years.
Shhhh, don’t say that too loudly.
Quote – “I hate to say it, but I am still not sold on development. If you are developing you don’t have the time to correctly study domains you want to buy. That means someone else is getting the deals”
I think many of today’s developers got the names a long time ago through either registering them, the early drops and acquisition years ago…
I also don’t think development and catching names in the drops are mutually exclusive. If you can’t multi task in this business, it makes it a lot tougher. Also, in my opinion, the “gems’ in the drops are few and far between now and the past couple years. The cast majority of names of true value are spotted and chased by many.
I have caught names off the drop list, launched a site, and the next week we were top 5 on Google for the terms we were targeting. Don’t trash development.
El-Silver, if you “kept your mouth shut”, at the beginning of your reign of terror, these possibilities would have become fact:
1) I would have a lot more paying domain clients asking questions and paying me for the answers. (thanks bro, for taking food off my family’s table)
2) There wouldn’t be so many noobie domainers posting “brilliant, you’re the greatest” comments on Rick Schwartz’s blog
3) Your traffic would be 1/3 of what it is now
4) I wouldn’t be reading your blog to see what the noobs are up too, and learn a thing or two from you.
5) Get a chance to see Shaun’s pic on your blog! YO SHAUN!!
El-Silver, you are the voice of those who need guidance when they step onto the thin ice of domain investing. You are the canoe with the elk’s meat wrapped tightly and the dogsled waiting at the edge on the other side of the frozen lake.
(Oh, I heard that the karma angels were going to request you post a comment on my blog real soon… so be ready!)
Looking forward to seeing you develop out jobs.ca and forsale.ca – two category killers in the .ca ccTLD!
Looking forward to delicately sipping some 18 year old scotch with you at T-Vegas and DF Santa Moniker, I mean, Santa Monica.
@Stephen…..who the hell are you calling a newbie? Why do you always act like you are the keeper of all knowledge?
I had registered TONS of domains for FREE before they started charging for them in Sept. 1995.
I don’t like to flame, as I like to think I am past that now after 15 years on the Net, but you need to get your head out of your ass.
Also, quit putting down Rick Schwartz….he knows more than you ever will. It shows in your meaningless posts, many of which only attack other folks.
Jobs.ca is about 3 weeks from completion according to the company building it for us. (Holding site is there now). After we get it from them we will put it through the wringer for a couple of weeks and then launch.
As for forsale.ca, that is one of Robert Montgomery’s (my partner on jobs.ca and the geo stuff) many gems.
Is your Robert Montgomery the same one that
used to work as an assistant to a mayor in
Georgia back in the 80s ??
Georgia – in the USA…
~Patricia Kaehler – DomainBELL
Whoa there, cowboy! I never called you a noobie! I didn’t blanket all of El’s readers as noobies, because I’m a regular reader AND poster here, and think El is fantastic. If you can’t see the jester in me, you don’t know me yet. It’s basic domainer knowledge though that Elliot provides more helpful information than most other domainers, and he does it daily. This is a godsend for new domain investors, and tho I tease El about it, he has reached far beyond my voice and is appreciated by EVERYONE in this business. I don’t know why you came out and attacked me for my post…
Did you and I bump heads ever? Do I even know you? What’s your last name? What’s your website? I think most of my blog associates will agree that I rarely “post attacks on other folks” as you allege, unless they do something really lame.
As far as putting down Rick Schwartz, I don’t make comments about him unless I disagree with his blogposts, which are up for commentary since he publicizes them. I spent over two hours writing comments about some things he said on two of his latest blogposts (one in particular a few days ago about not wasting time with certain “people”:)
RICK SCHWARTZ: “You can’t be all things to all folks so you have to choose what and who to focus on. When I sold product at a tradeshow and I had 100 people in front of me, my job was to blow away the 95 that would waste my time and energy and get to the ones that wanted to do business and place an order right now. Weeding out the crap is the difference between success and failure.”
Do YOU agree with that statement? I didn’t. Although Rick wants people to attend TRAFFIC, he can’t “predict” which of his attendees will be “CRAP”. Does he know right away who are the lowkey big buyers, the big dealers, the big idea people, big breakout companies AND who COMES BACK to buy later? Of course not. Four years ago, Rick would have ignored Elliot, based on his comments here.
Even in spite of Rick’s success, think about how many MORE people he could have reached and sold to with a little more “Schwartz Graciousness”. Rick knows waaaay more than I ever will, no doubt, but that doesn’t mean I can’t question his comments, does it? And is any domainer perfect, and the “Keeper of All Knowledge”? Lastly, I’m sure Rick thinks a little bit about what I say… I’m nut thet doomb, i em shure. Seriously, I would be HONORED if Rick ever said he considered me a friend. Someday that might happen. Really!
About your request for me to “grow up”, now you’re asking too much of me.
Anyway, I don’t have anything against you. I’d like to talk to you further to make things right. Have a great holiday weekend, everyone!
@ Patricia Kaehler
Rob’s not much of a political guy, so I don’t think so. Rob grew up in Chicago, when to college at Purdue and was an Aeronautical Engineer by trade. He’s a pretty private guy, so that all I can say 😉