What kind of domainer do you want to be ?

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.