There are quite a few challenges with operating a domain name business, and I wanted to share thoughts on what I find to be my biggest challenge these days.
My business needs to regularly buy domain names in the aftermarket. These domain names can cost anywhere from $69 to five figures, although the majority are in the 3-4 figure range. I need to continually buy good domain names to increase the likelihood of a sale. I liken this business a bit to fishing. The more lines you cast, the greater the chance of catching fish.
On the other hand, I need to keep revenue flowing in order to fund these domain name acquisitions. For this, I rely mainly on domain name sales. My company has other revenue streams (thanks for reading this blog, BTW!), but selling domain names is what really funds the investments.
It can take a while to sell a great domain name for a price that is commensurate with its value. A domain name could be worth $50,000 all day in my eyes, but the right buyer with the right budget doesn’t come knocking every day and sometimes never. Nobody, myself included, likes selling their domain names for less than they are worth.
I think this is the biggest challenge with running a business like mine. There are ways to overcome this challenge (such as selling domain names at less than ideal prices via auction or to other people who buy domain names), but it can be frustrating to make a great acquisition only to sell it for much less than ideal price.
I think every type of business has a challenge like this. Companies can run various sales and special offers to drive revenue for their business when needed. With a domain name business, though, each domain name is unique. Underselling a one of a kind asset can be frustrating, especially if the person who buys it ends up selling it for significantly more money.
Many people have asked me about business challenges, and I think this is the greatest challenge to my business. Although this is probably not surprising, I figured I would share my biggest business challenge.