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Domain Investing Stats and Tips

What kind of domainer do you want to be ?

January 27, 2013 by Raymond Hackney

By: RH

Knowing what you are trying to accomplish and what kind of domain investor you are is certainly helpful in becoming successful. Having a business plan the same way any business would will help in the long run.

There are certainly differences of opinion on whether there are certain classifications of domainers, since anyone can purchase any domain if they have the budget for any domain.

I tend to agree with Toronto Domainer on his classification of a "reg fee" domainer. A lot of these guys are not looking to trade up, they are not going to reg a name for $8, sell for $500 and then buy a $500 domain and look to sell that for $2500 to purchase two $1250 domains.  The reason being that there are many that do not want to take that risk, one certainly can say owning 200 reg fee names that may have a limited resell market is riskier and that's fine.

I think its more psychological for a lot of reg fee domainers to not have that much invested in one domain. Some really don't believe in high valuations and while they certainly would not mind getting lucky on a reg fee domain as a seller, they don't share that same enthusiasm as a buyer.

The point that Toronto Domainer made about buy low, sell low is a good one and I have shared that opinion for many small domainers who are mostly hobbyists. Many sales do not get done that would get done if the pricing was realistic. There are many people interested in buying a decent domain for their business. A small and even mid sized business does not need the category killer domain, nor do they have the budget. They would buy a domain for $500, and if you purchased that domain for $8 that is a great return. You have to know what you own and be realistic. Of course there are outlier sales, a name that any domain forum would appraise at reg fee that sells for $5000.

You have to realize these sales are unique, you more than likely don't know how the sale took place, the sales ability of the seller and how motivated they were to sell. Never underestimate the advantage someone who does not need to sell has over someone who does need to sell.

You want to keep buying and selling and making your money on volume. You can probably have a higher sell through rate if you are willing to move domains at a lower price and keep cash flowing. The average sell through rate from most of the bigger domainers comes in at somewhere in the 1 to 2 percent range.

If you are not going to own thousands of domains you are most likely not going to get many offers each month. You need to be more active in selling as opposed to being passive. You should have a budget for what you are going to spend each month, and always stay on top of what renewals will be each year. You want to look at what you have done with your sales tactics at the the 6 month mark, reassess what you think of the names 6 months into the registration. The names you realize you don't care for you can look to liquidate in a wholesale fashion. You can run auctions or sales threads on Namepros or DN Forum. Also if you are not looking for much try selling them to Buy Domains, they may not pay a lot but getting $20 for $8 is much better than getting 0. Most importantly it keeps sales churning and that one name can now buy you 2, maybe 3 with a coupon deal.

There will be plenty of people that will say that focusing on reg fee domains is foolish and that you need to buy better domains to really make it in the domain business. There certainly are greater opportunities and taking the next step can become much more fruitful. But it is a big world and not all domainers are from first world countries, on top of that success is defined differently by everyone. Most don't want to be full time domainers, they just want to make some money in their spare time and have a little fun doing it with something that interests them. That's the beauty of domaining, you can register domains as broad or as specific as you like, your knowledge of some specific topic or field may bring you some money while expanding your mind and staying relevant on a topic that interests you.

The next level brings the potential for a lot more money and also requires adding things to your tool belt that requires spending a little money. The domainer that wants to move from being a reg fee domainer to being active in the drop market and selling names for four and five figures consistently is going to spend a lot more time going through data. The toolbox will include a paid membership to domain tools, dropping.com is certainly another tool to have and at $150 a month one needs to be sure they are ready to move up the domaining ladder.

The buying budget needs to be larger as this domainer will be competing with many established domainers on NameJet, Snapnames and Go Daddy. The ability to pick off the names that fly under the radar is key here. While everyone is looking at the top 20 most active on NameJet they need to be finding the name that has 0 to 5 bidders on NameJet or sub $200 on Go Daddy.

Knowing what kind of domainer you want to be and having a plan and sticking to it should increase your level of success in the industry.

Best of luck to everyone.

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Filed Under: Domaining 101, Opinion

About Raymond Hackney

Raymond Hackney has been involved with domain names since 1997. One of the most prolific writers in the domain industry and founder of TLDinvestors.com and 3Character.com

Comments

  1. Dman says

    January 27, 2013 at 10:05 am

    good read thx.

  2. DM. says

    January 27, 2013 at 11:54 am

    really liked this – cheers

  3. Arseny Kardash says

    January 28, 2013 at 12:05 am

    I also think that on the beginning stage of the game most of the revenue should be reinvested in the right tools and new domains to sell on the higher level.
    I’m considering adding LinkedIn Premium package (“Sales Navigator”) to my “domaining toolbox”. The package includes 10 monthly “inmails”. Which would allow contacting potential decision makers ten times faster and more effectively (avoiding “gate keepers” and “SEO consultants” :). Did you have any experience with contacting potential end users through LinkedIn?

  4. RH says

    January 28, 2013 at 2:15 am

    Thanks for the comment, I have not used LinkedIn to contact end users.

  5. domainer says

    January 28, 2013 at 7:52 am

    Good post. I had re read this post and one of the best posts for 2013.
    Hey, I think its ok to hand reg names and flip them. Nothing wrong with that. Part timers do this, heck even Elliot done this and bootstrapped his operation when he first begun. Now hes traded up on a bunch of names and after market purchases.
    I agree on 8 bucks and flipping quickly for 100, or even 500. The amount of return on investment is amazing as long as your carrying costs are not to bad and u know what your doing. Keeps some cash rolling in. I do this still and going on 6 years. Not as much as I used too but made some cash in buying a .tv domain name for 20 bucks for 2 years, selling for 80. or 10 bucks into 50 bucks. Did this on about 200 .tv domains roughly to some of my buyers. Did this last year on sold probably a new customer of mine in a a different sector and knew what he was buying. Probably flipped 60 .tv domains to him and a good portion were hand regs. I did buy one name for 250 and sold at 600.
    I will say this and disagree on the cheap shots against frank schilling by Toronto Domainer. Dont like his paypal min amount, park elsewhere. Voodoo requires 20 bucks payout and they still payout well. You have a choice, you either park with frank or you dont. I’m also amazed by how many Toronto Domainers or smaller domainers that do not get direct navigation or cash flow. Like Rick, disagree with Rick, hate rick, whatever your feelings are you should read between the noise and see what Rick is talking about cash flow and direct navigation.
    The missing puzzle for me was direct navigation last year. Since April of last year, I really focused in adding to my portfolio and direct navigation. While I am not earning a living on ppc income, its a diversified approach in case sales are soft for any given month. Lets say you do 2k sales, costs for the month is 700. Ok, not bad. 1300 profit. A lot of people would be jumping of joy off this and developing countries. Heck even me I get same thrill on this and dont need that 5k sale each month. But then you next 3 months are soft. You keep busting your ass and no sales. I been there. But today I have some direct navigation, some income and takes the pressure off on flipping.
    Thats where the small domainer, middle tear domainer is in trouble. Remember 08, 09 periods and how many domainers disappeared off the boards? I sure do. Where are they now and the part timers. If they have a diversified game plan, they would probably be in the game still. This is coming from a domainer who lost money in his first 2 years even.
    Be very careful who you listen too and bloggers will have there hidden agendas this year and many years to come. They will be pleasing to the gtld advertiser and not write from there heart.
    Going get pretty ugly. Fuck the noise I call it and try to stay focused. Don’t forget the direct navigation side of things and auctions.
    Great post!

  6. Arvin says

    January 28, 2013 at 2:50 pm

    Very good post, you have to define goals. Thx for posting you have become my favorite domain blog.

  7. Tommy Craig says

    January 29, 2013 at 1:20 am

    The title wants me to reflect on something. And this made me realize that I should also help those who are in buy and sell domain business to succeed, just like what happened to me. I was once an ordinary buyer and seller of domains, tried many strategies but failed. We know that it is very competitive in the internet world and we should excel in any way by our guts and determination. And then I came up with this site and buy a domain from them, then sell it and buy again and sell again. After that time, I’ve noticed that the domains from http://www.domainka.com is easy to sell than what I bought from another company. I’ve also noticed that in http://www.domainka.com they have secured all their domains with high PR and with a variety of TLDs to satisfy those who buy. And now, I’m still on this field and still purchasing domains from them, so if you are tired of what you have right now then better go and ask for help at http://www.domainka.com for sure you ‘ll be like me soon.

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