Despite the economy that seems to be on a roller coaster ride, good domain names are still fetching very good prices. This is important for me because selling domain names is how I make a majority of my income. However, development has become an integral part of my business, and I’ll tell you why.
Domain names aren’t selling as quickly as they once did. A few years ago, it was very common for me to buy a name and sell it within just a few days. Other domain investors had a great appetite for descriptive domain names, and it was far less common for me to hold a name for more than a couple of months than it was to flip it quickly.
From my perspective, the “hold” time on my personal domain investments seems to be longer. I am more focused on selling to end user buyers than relying on the once very quick flips. While the quick flips are still there (and still have the same excitement), they occur less frequently than previous years.
With my developed websites (dog sites, city .com sites, my blog, and a few miscellaneous sites) generating significant revenue, I have a greater ability to hold high value domain names without the pressure to sell them. I can be much more selective when it comes to selling my names, and I am in a far better negotiating position. For instance, if I receive a $10,000 offer on a name I think is worth $25,000, I can turn down the offer, even if I paid $5,000 for it and a sale would yield a profit.
From my perspective, I believe you should develop your best domain name into a revenue generating website rather than spreading yourself too thin and building many sites. Once that site is generating significant revenue, then you can branch out and build the next one. Don’t take on too much at once, but do build one revenue generating website.
Having another revenue stream that brings in consistent income will reduce the pressure on your domain sales/flipping business.
Fantastic points Elliot and very much the conclusion I’ve came to myself recently. I have been buying & selling domain names full-time for almost four years now. However it has slowed down and put pressure on my budget.
I’ve been trying to solve the problem by developing loads of minisites. However I’ve recently realised that I’m better off focusing my time on one or two major sites that I can build into authorities about their specific topics. By doing this I’ll be able to justify more time spent on them, be in a strong position to seek advertisers and then be able to expand once they are producing a nice profit. The first one I’m starting with and spending most of my time at the moment on is a site with information on Australian towns and attractions. It’s going to take a lot of time and work but I feel it will be well worth it.
Great post as always Elliot. Keep up the great work and all the best with your development and domain names.
What great advice, to slowly build out sites into revenue generators. When I started domain back when I was 14 I only tried to sell names and I have slowly moved away from that to developing sites.
Quick question; do you have a team that does most of the development or do you do it yourself? I’ve seen some of your sites and they seem like there’s a lot of work put into them. If you do do it yourself, how do you find the time to find end-users AND do the development work?! Great post by the way, first time poster, long time reader! 😉
I don’t do any of the design or coding… I do manage the articles that are written for the sites.
Finding domain names to buy takes a small amount of time, and once I buy them for good prices, it’s generally not too time consuming to sell them.. just a few Google searches, some emails and negotiations.
Thanks Elliot, always great advice!
Elliot – I agree with you. Personally, I only buy domains that I feel like I could build out into something. I pass on a lot of great domain because I don’t think I can make a profitable website out of it.
@David Good move, Google has really been cracking down on mini-sites with the Panda Update. I add a new blog post a week to one of my sites and traffic is now up 200% in 30 days.
Well put, Elliot.
Being new to the domain game, I’m amazed at how many good properties domainers own but how crappy the development is on most of them.
I understand that people bring different skills to the table, but domainers would be able to make a solid, passive income by learning basic development, copywriting and SEO.
It’s not hard. Just hard work 🙂
All you need is just one to make you a Domain Rock Star!!!
Take the t-shirt test—I wear the name of my domain “BullS” on the t-shirt and stickers on my pickup and make money.
Plain and simple!!
This is great advice and spot on, all I would personally add is this: After you build your revenue generating site its a mistake to sit back, go build another one in as short time as possible. It only takes a big order cancellation, frivolous lawsuit, some nasty chargebacks or worse for some – a google update, and a website’s revenue can be literally decimated overnight. Be the site/s that the google algo updates boost rather than bomb.
The most money in the business is usually made by those selling a going concern website rather than just a domain. Domains like diamonds, sure rough and uncut they definitely have value – but make a nice engagement ring with a label out of it and someone will be paying a whole bunch more to buy it.
Are you still working with Fred Mercado on your Geo’s? If so, are you happy with the results.
Keep up the great work!
Yes and Yes.
“just a few Google searches, some emails and negotiations.”
That is a misleading statement. People know it is not that easy to sell a domain. It doesn’t matter whether the domain is the end-user’s top service or product. You have industry contacts and a company to represent you. Selling domains is also based on trust.
Companies are too cheap and dumb to realize the value of a domain. Maybe they don’t need the domain. It may take you a few Google searches, a few few e-mails and negotiations for you to sell good domains, but others will find it to be a challenge even with highly generic domains that an end-user deems as too expensive.
You have to know what companies to contact. You are not going to present a $500K name to a company that doesn’t generate 10 percent of that revenue per year. Google searches are not always effective in leading a domainer to good leads.
It all boils down to the quality of the domain and if a company is intelligent enough to make a move. Thanks.
“That is a misleading statement. People know it is not that easy to sell a domain”
This is what I do for a living. Professional basketball players make it look easy to sink free throws, but I can assure you that I wouldn’t hit nearly as many.
I buy good domain names at good prices, and those are easier to sell.
“You have industry contacts and a company to represent you.”
Yes, those have been cultivated because I have good domain names for sale. Nobody represents me or my domain names but me. I think in the last 2 years, I’ve only sold 2 names at auction and had a broker sell 1 domain name on my behalf (earlier this month). I am personally involved with almost every single sale I make, and it is as easy as searching Google and connecting with the right person.
it’s so easy to famous name sellers like you Elliot.Most of us hardly to close a deal because now the rate is buyer: 1 /seller 100 ….
This is how I make my living… and I am certainly not famous.