About a month ago, I listed a group of domain names for auction on NameJet. The majority of the domain names I listed for sale were acquired within the last 18 months or so. The domain names came up for auction last week. Some of the names sold for more than I paid, and others sold for less. Overall, I lost a bit of money on the auctions.
My business model was built on buying and quickly selling domain names. This model has been altered over the last few years, and I have been buying more domain names for longer term holds. Domain names like Lilac.com, Embrace.com, Franks.com, and RightAway.com are either long term holds until the right buyer comes around or not for sale. This is partly by choice and partly a result of the market. Sales to other domain investors are more difficult these days, and great names are harder to find at reasonable prices. I would rather keep my better domain names until the right buyer makes the right offer.
Even though my model has shifted, I still like to move inventory. I have always kept my domain portfolio trim (under 500 domain names), and I always like to keep enough cash available to make several large acquisitions at any given time. One way to keep my business model moving is to put domain names for sale on an auction platform like NameJet and hopefully make a return on my investment.
Some of the domain names were good buys and sold profitably. Other domain names sold for less than I paid. It was a risk I was willing to take because I like to keep cash flowing.
Despite the fact that I didn’t make a profit on the deals, I did make back most of what I spent. A couple of domain names that didn’t hit reserve are back in my account, and one has subsequently been sold.
I am constantly on the hunt for new domain acquisition targets. I probably spend more time buying domain names (or trying) than I do on sales outreach. With most domain acquisitions, there is some level of risk. Unfortunately, I didn’t see a good return on that small batch of domain names but I didn’t lose my shirt either.
I am sure there is a lesson here, but at the end of the day, you win some and you lose some.
Rightly said. I like the way you share your experiences as you have the courage to share your win and losses.
Good luck Elliot 🙂
Thanks for the honesty. Most people only report their success stories. Good for others to know not every at bat is a hit or home run.
Imo this is still a very young industry.
Internet is extremely underdeveloped.
In this situation cash should stay within the domain environment as food for the still young Internet, which is still a baby that needs help to grow. Money should be lended and borrowed all the time within the industry to create more useful websites, more startups, etc., shortly a more densely used Internet. I see all the time webmasters doing extremely good websites, maybe partnering with end users, but being themselves, actually, the real entrepreneurs on the web: they are the end users…and some of them need “food” from the industry for the benefit of the entire domain industry, because an internet more and better exploited means more value for domains.
sure ideally but people have to pay back loans eventually and live life and pay for daycare put kids through school, etc, etc.
In a given year, you want to have better names than the previous year. Better yet, better names coupled with reduced renewals from the previous year.
I let $3000 worth of .ZONE registrations drop in 2015. The only chance of recovering was converting the quantity of $39 .ZONE drops to $10 .LINK registrations. Instead of walking away from the drops, create your opportunity to succeed by registering improved domains with lower renewals.
That is a good point.
I always look at the quality of inventory and cash in the bank vs. the prior year as something of a benchmark. If both of those things improve, there are no complaints.
Steve, This sounds like the exact same mistake at a lower price point. Just like you picked up some domainers .link’s probably picked up some of your .zone’s aswell.
I’m glad weed was legalized when GTLD’s came out. I needed everyone to stay high so I had enough time to
register the best domains.
Very true indeed. The best type of losses are the ones in which you learn a valuable lesson and break close to even as possible from what you spent. It is almost getting a fresh start to do things the right way this time around.
You were able to obtain the cash flow to move forward and make better purchases that will yield you an actual profit. Congrats on having the right mindset and attitude. Goes a long way not only in this industry but in life.
I can’t claim that I “needed” the cash for other purchases or business operations, but having cash on hand is always important.
I was willing to take a calculated risk with the auctions. Unfortunately, they didn’t pay off profitably as I had hoped, but I didn’t lose very much.
It’s not always champagne and profits when it comes to this business.
I think anything sold to domainers involves a pretty big loss rate, even names bought a decade ago. Then again it is often the “low potential” stuff that domainers will offload wholesale, i.e. names that sounds pretty good but might not get a good volume of inquiries or have much revenue.
I have run a couple of other auctions with better results this year.
Well done on sharing the ups and downs of domaining Elliot. I am sure your experience this year, even with a small loss on transactions, is still better than that of many, possibly most, every day domainers.
Flipping domains at under the $300 mark is very common and apart from the obviously “big” domain names that come along every now and again, there doesn’t seem to me, to be too much opportunity in selling names.
A day rarely goes by without me being offered names in my particular business niche, but they are almost always rubbish variations on what I already use successfully myself.
I stopped blogging about domains a while ago, as my focus moved. But, I still use domains to promote specific, often narrow niche aspects of my businesses.
This approach of using my own names to promote my own business continues to yield far more than domaining ever did for me.
For those sitting on what they consider to be valuable names, why not consider actually doing something with them if they’re that great?
Let’s all be honest here. Has anyone realistically made any money in this game?
I was a serious domainer for 10 years, never sold a thing and got sued for trademark violation.
Every year or 2 having to pay for renewals, just increased the loss and made it worse.
It’s an addiction, It’s a mug’s game and I’m getting out.
I am sorry to hear about your bad fortune and wish you the best in the future.
Yes, there are quite a few people in the domain investment space who make money.
Things I have learned:
“You make money on the buy”
“Don’t lie to yourself”
Buy a name if you know you its resale value. (Investors and End-users)
Don’t over pay for a name because of your emotions. Be honest with yourself and don’t bea crazy buyer.
This way you reduce your chance of lose money.
*phone typing 🙂