When I first started investing in domain names, I had very modest goals. I was in graduate school, and I primarily used the money I earned to buy dinners and drinks. I didn’t really set many financial goals, because there wasn’t any point to it. I registered new domain names for around $8/each and I quickly sold them for anywhere from $15 – $100/each.
On occasion, I found buyers who wanted to buy a large number of domain names, so instead of selling each name for $35, I would sell 10 at a time for $25/each. The profit on that type of deal would be somewhere in the ballpark of $170. I started doing those bulk deals more frequently, and I figured if I could do one of those deals a week, I could make $10,000.
For many people, I would imagine making $10,000 a year with domain investments is a lofty goal – it was for me when I started, and I am sure it’s the same these days. However, if you break it down into smaller, more surmountable chunks – say $200/week, it makes achieving your goals more realistic.
As I started to get more serious about domain investing, I set goals for myself and tried to figure out the best ways to achieve those goals. As the goals become more lofty, I began to buy higher value domain names, which I could sell for lower profit margins, but much more money. Instead of selling an $8 new registration at a 300% mark-up, I could sell a $1,000 domain name for $1,500. The profit margin shrunk from 300% to 50%, but the profit grew pretty rapidly.
Set goals for yourself and try to beat them. Continue to raise the bar and look at new ways to generate revenue. Don’t cut corners and do shady things. You might make some more money in the short run, but it could be very damaging to your reputation and business in the long run.
If you look at the big year-end number, you could become overwhelmed. As they say in baseball, you don’t need to hit a home run to make big things happen. Do what you can to slowly chip away at that big goal, and eventually you will hit your number.
Probably this is one of the most important pieces of information (and I’d say critical information) any new domain investor should get (and drill into his/her brain).
May new domainers get (got) into this business in a sort of what I named as: “lottery ticket domaining” which essentially is buying ANYTHING.COM or WHATEVER-STUFF-CROSSED-YOUR-MIND.ccTLD and thinking they will get herds of buyers willing to pay thousands, if not millions, for the purchased domain name(s).
In other words, maybe you’d better off buying a Florida Lotto ticket…perhaps there is a better chance of some return on your investment.
Welcome to the reality crash: This, is the fable side of the business; the “romantic” one; the “hopeful” one… nevertheless, also the unreal one. !
Sad to say, many people get caught in this dream some more and longer than others but many still do.
The domain investing business takes time to learn…it took time to me.. and I believe that (again, at least for me) there is still a lot to learn and apply (and adapt also).
Building a domain business slowly, with steady pace and specially, understanding every single step, every single piece of gear in the mechanics of the domain industry sector (ccTLDs, TLDs, GeoDomains, Adult, etc.) you are in is crucial to be successful.
I am glad you wrote about this topic. This post, in conjunction with some others from your site are part of a collective wisdom any new domainer should grab immediately.
Kind regards from Mexico City.
Great post and comment by FB. From where I’m sit it’s sad to see people drowning (because once you were drowning too) and throw them a life raft and only get flamed as a party pooper. It’s not a party when you don’t have money for food or gas while holding hundreds of domains you can liquidate even for a dime. Sometimes it’s a real business and other times it’s an addiction. As Reece said on his blog in these rough times, the cushion is gone so run as a business one can do very well, but run in denial as an addiction and you should seek help as fast as you can.
Thanks for your comment to Elliot’s post and my comment. !
You also make a great point stand out:
Yes, it is true that this business can get into an addiction if you don’t really know what you are doing…. Max-ing credit cards on registering domains can be so easily done…
There is a point in this business where a domainer has to sit, relax, analyze his/her situation, GRAB REALITY and then decide what to do.
This is not a game, but a serious business (which can somewhat intersect as your hobby, as well…maybe “weisure” as was said in this same board a few days ago), but at the end it is first and foremost BUSINESS !
Being flamed may be part of the “culture”… People don’t really like being told they are wrong…or even accepting suggestions; reality is hard, “Reality crash” I called it…
Oh well, but this business is great and will be great if done the right way.
Owen, will you be at TRAFFIC Amsterdam ? If so, it’d great to personally say “hello” to you over there.
Best regards from Mexico City.
Hi El Silver,
This is a great little article, which you should post on the BostonHerald.com, that did an article on SEDO today. The article focused on “selling domains” as an investment opp for the unemployed. Check out the article here:
Smart path Elliot. . . starting in the domain “mailroom” by flipping new regs for $100 and work your way up to the bigger deals. I’ve got some goals for this year and they are lofty even when broken down in to weekly #s . . 🙂 I’d rather fail my big goal than settle for succeeding a mediocre goal that I know I can meet.
Excellent comments all-around, guys. And thanks again Elliot, for providing a much-needed gut-check & template for success. Start small…