Domaining Schism

By: Raymond Hackney

There is a schism in the domaining community which seems to center around what one owns and how one goes about acquiring domains. On one hand you have those that believe people should focus on quality .coms only as that is the only path to riches. Then you have those that are reg fee domainers, they are not buying your inventory, they will find a hand reg and search out potential end users and that's how they will make their money. There are a few other philosophies mixed in but those are the two most prevalent.

The Quality .com Path

Many who got into domaining in the early days circa 1995 – 1997 had all the best domains there ripe for the picking, they have experience that most new to the business do not. They have seen what a quality .com can do for a business, what it can do from a monetization standpoint and from a just pure "WOW" factor. Some preach their philosophy in a very straight forward way and respect all paths that are chosen even if it does not align with their beliefs.

Then there are those that like to be a bit more boisterous, who make fun of the reg fee domainer or those they believe just have a lottery ticket mentality. This usually leads to flame wars on blog comments and domain forums.

Some do it simply because they can, ego, or maybe there is an agenda that you need to convert more people to your way of thinking so they will buy what you have to sell.

Reg Fee Domainers

The reg fee domainer in many cases gets into the business with limited capital. That is not 100 % of the time, sometimes there are those that do have a decent chunk to get started with but will not make one purchase for say $5,000 because of a myriad of things:

• They don't want their eggs all in one basket
• They believe in their ability to pick winners over and over
• They really don't have 100 % faith in domains and want to spread risk

Reg Fee domainers for the most part are not spending $3000 to attend a domain conference, they are not trading up, if they hand reg a domain for $8 and sell it for $500 they are going back to the reg fee list and analyze their next hand regs.

There is a good discussion at Namepros today that kind of highlights this schism. In a thread where a member wants to know what new trends will be hot ? There is the normal posting of what will be the next big thing.

Then the heat gets turned up,

First there is member Fonzie who has a knack for getting a lot of people riled up, his posts are usually intelligent but they can get too critical of those that disagree.

He writes: Of course they have. Watching those 'trend domain' threads would be
tragic if it weren't so hilarious. Its like watching 8 year olds doing
their best in the 90 mph batting cages. Part of you wants to say
something, but you're too busy laughing.

They're too stupid to realize that success at this isn't 'getting ahead of the curve'. It's 'getting behind the money'.

Problem is, the money wants domains that you're not going to hand
register with Godaddy coupon codes and they just. don't. get. it. The
majority of people participating in those pathetic, spastic 'trend
domain' fails probably aren't liquid to five thousand us dollars in
their lives, never mind five thousand dollars disposable income to
invest in a speculative domain.

Rule #1- success in domaining isn't adjudged on hope, intentions or 'the future'. Its judged by income.

None of those people live up to that simple rule.

That is followed up by an articulate reply by Gifted Domains

While i agree with part of what you said about the so called "trend
domains" and some funny things going on,,,,,,, remember, a coin always
has 2 sides:

I have 5 thousand and more, but i don't want to participate in spastic
and pathetic SN and Godaddy auctions driven by herd instinct of some
rich but stupid "domainers" or pay unrealistic prices to some wannabe
Rick Schwartz domainers, just because the label says "5000",,,, it
doesn't mean anything.

If you have the tools and skills to get good dropped domains, cheap
domains, etc. you can make nice cash and you don't have to play the "buy
expensive domains from me, otherwise you can't make money" game of some
domainers who are hording and hording and dreaming to sell their
domains for enduser prices to other domainers or dropcatchers who let
the entire planet know about the auction so that the price is driven to
astronomical levels so that you almost pay more than endusers would pay
and end up selling the domain 2 years later for half of what you paid
(as seen regurarly).

I made more money from those "laughable" reg fee domains than those domains i paid serious money for. The ROI is not comparable.

This business is not about "showing off" and let everyone know that you
paid $5000 for one domain and laugh about others who don't do that so
easily. Its about making wise decisions and wise investments and hard
work and research.

If you pay $5000 for one domain, you must be 100% sure to get $10.000
otherwise the risk is too high. Unless you just like to gamble. Todays
domain market doesn't allow to risk much, thats why people are working
hard and searching for alternatives.

Not because nobody has money, but because most try to minimize risks and maximize profit.

Then Kate from SDSINC replied: Personally I actually think that domainers do not have money because of:

a. the cheap lottery ticket (aka handreg) mentality prevailing

b. not making enough sales to reinvest and they have to pay bills too

c. it's not totally their fault, this business is fundamentally illiquid

d. they are not really confident about their strategy (for good reason).
In practice minimize risks and maximize profit is a diplomatic way of
saying lack of funding.

Predictive domaining is one trade where a handreg can be turned into a really nice sale but that is in theory. Being early is not enough, a bad domain is a bad domain.

The bare minimum is to understand (and research) the particular niche of interest.

For example, I see the 'big data domains' that are registered daily and
the vast majority are quite horrible. It's clear that domainers are not
getting it. Delusional. I know that some will point at the sales that
they or others have made to prove me wrong but I'm more interested in
the full picture (the balance sheet that also shows how much they lost
in other fads and massive registrations).

If anybody thinks I'm being harsh or negative (that must be true )
see for yourself – make your own compilation of the many 'next big
thing' threads at NP. That should put things in perspective.

Now I'm not saying I am good at predictive domaining, I prefer to stick
to the things that work today. Perhaps it would be good for some people
to admit their ability to predict the future is sketchy.

The problem with the next trends is that they do not mechanically translate to domain sales, many of which are unpredictable.

Three interesting posts that have a lot of truth in them but also show the disconnect between domainers. I thought both Gifted Domains and SDS Inc put together stellar posts.

I don't agree with Kate on D, plenty of big businesses with funding look to minimize risk and maximize profits. I do agree with the part that many don't fully believe in what they are doing.

Hand Reg domains get painted with too broad a brushstroke imo. There are domainers who research and work hard and turn hand regs into excellent ROI. Then there are the people who certainly are not really domainers, they are the get rich quick crowd that don't understand branding or trademarks and register bad domains that most would agree on. Then someone else who has a great portfolio comes along and says hand regs are for idiots. Well if you know what you are doing and can take an $8 investment and turn it into $500, most people want to be that kind of idiot.

I will be the first to say I read all the trend pages but I don't register trend names, not because I think its stupid or not worth taking a chance, but because I always think that the trend will be called something else or branded something else by a big company. 

The other part about domaining that gets all thrown in together is what the overall group has done. Well if I got and 88 on the exam and most of the class failed, no offense I don't care. I scored an excellent mark on the test and that's that.

No sales and constant drops should teach some that they are not a good student and need to get a tutor or do extra credit, it does not always work that way.

Let's look at the Restaurant industry, many fail, most actually. If new would be restaurant owners looked at everyone failing, they would never open a restaurant. Its the same with domaining, its an individual sport where each domainer thinks I can make this strategy work. Its that self belief that carries them, some will make it and some will not but that's just life.

Of course there is going to be greater liquidity in the high quality .coms than in that brandable .tv someone may be fond of. The quality .com will also hold burn down value that no other .com or alt extension can match.

It does not matter which philosophy you subscribe to, you need to stay focused on today imo with an eye on tomorrow, and make sure you from time to time read the history of what has worked and what hasn't to formulate the best domaining strategy for you.