I feel pretty old saying this, but when I first started buying domain names in 2003-2005, it was purely a volume game for me. I hand registered large amounts of domain names with the hopes of quickly flipping them. Success, to me, at that point, was selling a group of 10+ names for $500, which would be somewhere around 5x profit.
Sometime between 2006 and 2007, the volume business turned into more of a value business. I was hand registering fewer domain names and focusing on higher value acquisitions. Instead of trying to sell many domain names, I would target my efforts on just a few high value domain names each month. There was greater risk with this strategy, but the payoff was far greater.
In today’s business, I think it’s more difficult to sell in volume, since most buyers aren’t all that interested in purchasing large groups of domain names. I haven’t really tried this approach in the last couple of years, so that is pure speculation on my part. I am interested in knowing if you have success selling names in volume.
The issue I see with focusing on value vs. volume is that in a time where cash is king, domain names aren’t as liquid as they once were. Yes, you can still sell many types of domain names quickly, but there isn’t as good of a market as there once was. For instance, if you need cash and want to sell a 2 letter .com domain name made up of any letters, you can almost certainly sell it for $100,000 today. A few years ago, you could have probably sold it for $150-200k. That’s a pretty significant spread, especially if the domain name cost 6 figures.
The purpose of this post is to generate some discussion on whether you are more focused on volume or value these days.
Value..No question…I have been eliminateing and concentrating on business development .NOT crap development
I think, valuable domain names in good volume should refelct your portfolio. But, since valuable names are expensive and having too much volume increases the inventory cost. A balanced approach is required which must be in tune with your investment and time availability.
I think for me and this is coming from a cash strapped newbie investor it really depends on how much money you have to invest. I started out thinking about volume but I am moving toward value with every passing day. I’d rather spend $2000 on a single word domain name and try to flip it for 3,000 or more than hand register 200 names and try to get lucky. I think the time of hand registering domain names are over inho.
Always been value, but value is a lot harder since ‘value’ in a word is pretty hard to pin down.
I do believe we crossed the threshold of peak domaining some years ago. Anyone who says otherwise is pretty dumb, probably relying on some isolated anecdote that isn’t representative of the big picture.
Another point of fact is the current inventory of ‘huge words’ still in domainer hands is pretty much beaten to death in terms of its most likely end user prospects. It’s become like a game of hot potato, spending five figures on a domain from some domainer who spent five figures on it from some other domainer, who spent four figures on it from some other domainer, etc.
I envision the domain game as a bunch of monkeys. At the base of the tree are the starving, loser monkeys. In the middle of the tree are the slightly smarter monkeys who’ve figure out the basics of hunting and copulating. At the very top of the tree are not the smartest monkeys, but rather monkeys just as dumb as those at the bottom of the tree, but who assumed their position because of being there the longest.
The secret to success in that environment is to forgo being a monkey and instead, be a python.
“I do believe we crossed the threshold of peak domaining some years ago. Anyone who says otherwise is pretty dumb, probably relying on some isolated anecdote that isn’t representative of the big picture.”
I’ve been in this business full time since the end of 2007, and last year was my best year in terms of revenue (and income). There were a few large sales, but not an anomalous number of them.
“It’s become like a game of hot potato, ”
Most of my sales this year and last year were to end user buyers. I’ve found the domainer to domainer sales channel pretty dead, and it’s been that way since late 2009 or so. That wasn’t the case a few years ago.
“I envision the domain game as a bunch of monkeys.”
Perhaps by thinking you’re superior to others intellectually, it will make you feel better about being inferior when it comes to generating income from domain investing?
There are a lot of smart people out there who aren’t happy 🙂
Elliot, you’re what’s called a ‘performer’. You could have been (or, being young enough, perhaps still could be) whatever strikes your fancy and do well. You could be a physician or a musician or an engineer and you’d do just fine.
Performers make up 1% of the population. There are a handful of performers in domaining. Schilling could’ve just as easily gone into equities, if Merlin Kauffman decided to design race cars tomorrow, he’d do well at it.
Sometimes, performers get sucked down non-contributory rabbit holes because of the money. We saw it during the poker boom when some of the best young minds imiginable- we’re talking kids who could’ve gone on to seriously innovate or cure shit- couldn’t resist the allure of sitting in front of a computer screen, clicking their way to $500 an hour.
I do absolutely fine with my income from domain speculating (I don’t bother to call it ‘investing’. I’m speculating). I’m not a loser at this but I have no problem seeing this niche for mostly what it is.
For every one of you, there are 100 people desprately trying to do the same thing but failing badly. Some of the greatest ‘success stories’ in this game are old shitbags who stumbled into one of the oddest opportunities in history during the 1990’s, fresh off their most recent cross-country trip peddling steak knives from the back of their 1977 Buick.
The domain industry is what it is, which is precisely why some of its most vocal proponents spend so much trying to convince anyone who will listen that it is something it isn’t.
I think if you owned and sold a one-word generic .com you probably changed your views imho
Winners speak alike, losers think alike
“I envision the domain game as a bunch of monkeys”
I told you so…it is all “BullS”
Smart monkey like me do the copulating and eating and leave the hunting to the rest, just like the lions.
Volume separates my time so much that less gets done than desired. I’m a developer. For me, money made in domains is largely dependent on websites I have created around them.
The less I have, that are of better quality, the more passion I have for them and the more capital can be invested in them.
Cutting through the B.S., Elliot was no doubt one of the few who entered this business late, yet early enough to really make his mark in this business. Back in the early to mid 2000’s there was still ample opportunity to slowly work your way up as a legit-full time domain investor, even if you didn’t have a lot of capital. However, in 2013, there’s really only a .0001% chance of starting in this business with no to little capital and expecting to succeed; at least not on the same level as Elliot. Hell, you might be better off buying lotto tickets. Or better yet, go work for a domain aftermarket firm brokering domains. IMO, if you have little to no money, you’re much better off saving enough funds to acquire a single, decent domain and then developing it into a real online business. I think we’re entering a buyer’s market, with many domain prices continuing to drop–especially with the confusion of the new gtld’s entering the market. Yes, dot com’s may hold their value over time, but again without significant capital, you can forget the notion of acquiring enough of these high value dot com’s purely for the sake of flipping them as your income. Just my 2 cents.
Always been value but I think domainers get confused because the big marketplaces focus on volume.
Unless you own over 100k, you cannot rely on mere volume. You should start a registrar instead because you will make more money.
It’s unbelievable that so many people register worthless domains and pay full price for them.
Maybe the registrars are the only people winning lol.