Today’s post is based on a recent interview with domain investor Ping Jing (平静 = tranquility, a nickname) published on eName. Ping Jing works in the internet advertising space and domain investment is only his hobby. He started domain investment in 2007 when he was working as a webmaster, so his exposure to domain names was obvious. The first domain name he bought was H5.com.cn for US$ 450.
A while ago he bought XJD.com for $9k and then sold it for 6 figures to an end user company, giving him a multiple of 33 in terms of return. The end user has trademarked XJD, so the domain name + trademark combo will be worth even much more in the future. XJD.com is most profitable in terms of dollar amount, but in terms of ROI 99down.com is the best because he bought it for $8.25 and then sold it for $1,050, giving him a multiple of 127.
One of the domain names he owns is 5134.com. This is a domain name that particularly interests me because it shows you the addition of Chinese meaning can make a domain name more valuable. For investors using the Chip rule, 5134.com does not look like a very good domain name because it contains “4” in its name.
However, if you come from Wuyishan city, the domain name will mean a lot to you. This is because 5134 rhymes with 武夷山市 (Wuyishan city), an ancient city located in Fujian province. Wuyishan city is an important tourist destination which is also listed by UNESCO as part of the world’s natural and cultural heritage. The city’s official website is WYS.gov.cn but I think 5134.com will make it stand out among other Chinese cities.
His advice to new domain investors is to start with LLL or LLLL .cn/.com because their values stay relatively stable. These domain names have meanings and potential for value growth, even though their prices are a bit high. He recommends to focus on cash flow but not too much on the return. In other words, you sell if you can make a good profit. Don’t try to wait for the maximum price, thus tying up your capital. Move in and out of deals fast, leaving some money on the table so that everyone is profitable and happy and the market stays active.
Figures in this story has been converted from Chinese yuan to US$ for convenience.