Bad week here. I had two sales fall through. I would like to know how many people make money selling domain names? Do you break even or make some money?

Before I spend more money I would like to hear from others.

I don't sell domains, although I'll add my 2 cents here anyways. :)

Unless you have a lot of capital (6 figures at least), or got into the domain business about 8 years back, the quality of your domains will be poor, imo. I see a lot of domain traders with poor quality domains as their inventory. That's a hard business model to function within, perid. :erm:

I have done ok with resales but nothing beats developing a site. I park most at sedo to see if they get any traffic and maybe make some coffee money :)

Unless you have a lot of capital (6 figures at least), or got into the domain business about 8 years back, the quality of your domains will be poor, imo. I see a lot of domain traders with poor quality domains as their inventory. That's a hard business model to function within, perid. :erm:

You just described me Aussie Bob :) I've been buying/selling/parking domains for only 6 months now. I'm a bottom feeder. The quality of my domains in general is very poor. I've made 10% on my total investment in that six months from ppc income and domain resales. I'm not an agressive seller. I made many mistakes in the begining but you learn real fast :). In another six months the quality of domains in my portfolio will improve from very poor to poor, when I don't renew about half of them :) I'll be taking some losses (and cutting my losses) on most of the domains I cull. I've no problem with that because I look at it as a total business, amount received/amount investedx100=return%, If my first six months is anything to go by, thats 20% return per annum. Not bad, but high risk. The quality is improving all the time. I buy much better domains now, than six months ago (but still bottom feeding). So, in theory, I'd expect my returns to increase also. If I can get my capital back within 2-3 years, I'll be very happy camper. Of course, most of those funds will be ploughed back into the business. Hopefully, one day, I'll be able to stop swimming in the mud and pay $1000 for a domain :) Who knows?

You just described me Aussie Bob . . . Hopefully, one day, I'll be able to stop swimming in the mud and pay $1000 for a domain :) Who knows?
I hope you get there. It's an uphill battle if you don't have the massive capital to invest into some fantastic revenue generating domains.

Just curious, if you had $100k to invest, how much revenue/mth could you expect to generate (with parking pages etc) as a return from that $100k investment into a domain portfolio?

I am too poor to spend any real money :)

Sell domain can buy coffee ?
I always drink water : )

I just answered you in your new thread. I'm making 20%pa from ppc parking with the odd domain sale (averaging just under 2 a month). As I say, crap portfolio. I'd expect to make at least 30% if I were to do it all over again, but high risk/reward. I also am expecting to make at least 30% in my second year (still only at this for 6 months).

Sorry to hear about your experience, technanny. Just like any other business, sales sometimes fall through. It just seems like when you're hot you're hot and when you're cold... well, things will hopefully warm up. ;)

I'm one of these people who buy domains, not for investment, but because I have quiet and secret plans to dominate the world in specific industries. I could tell you more... but then I would have to kill you. :D

Seriously, my philosophy on domains is two fold: long-term and specialization.

I think the best opportunities to make money on domains is by specializing in industries that you already know. No one can keep up-to-date on every industry. So, if you focus on one or just a few industries that you are hopefully already familar with, then you will instantly recognize a true opportunity when you see it.

In addition, you should be willing to hold onto guality domain names for an "extended" period of time until you find the right "motivated" buyer. You will always get offers from timewasters and other investors. But what you are looking for, just like an antique or collectible dealer, is "THAT" customer who absolutely falls in love with what your have. Then, they will pay your price on your terms... and thank you for the opportunity to do so.

In other words... part of this business is having FAITH that what you have in your portfolio IS valuable and saleable... and then having the PATIENCE to hold onto it until the right buyer is found.

Your ultimate success is dependent upon your ability to choose quality domain names, find THE best buyers of those names, and your patience in waiting until those "motivated" buyers come along.

If it was easy then we would ALL be retired by now. ;)

You're advice is good 4solutions. But i have a few questions...

How long do you advise hanging onto a domain and when do you decide to sell? 6 months, 1 year, 2 years, 5 years, 10 years, never? Of course I believe your "you gotta have faith" principal, but if it doesn't sell or even get any enquiries, you might just have a lemon.

Let's say you had the domain bananas.com. A very desireable name. Let's say you get a few offers from people who like the name but of course they're relatively low-ball and maybe could go as high as 2 or even $5000. You still don't sell because you think Del Monte might sometime or other make you a killer offer. The killer offer never comes. What do you do? Just hang on forever?

I'm a great believer that cash in hand is worth four in the bush. I can't help that, but it's probably how I'm growing up in this business. I, like every other business, need cash flow. Without cash flow, you're just digging a giant hole and shovelling a lot of cash into it. Just like sailing for a hobby :) I'm trying to recoup my investment and make a profit. No sale, no profit. I probably sell at a lower price than you, but I've turned over the domain and invested it in other domain(s). The trader principal as opposed to the investor principal, if you like.

You don't really have to go out and find the buyers, a good domain name will sell itself and the buyers will find you. An alternative strategy is to develop the domain. This is way too hard work and takes years. Your shovelling more money at the domain in developing and building a brand, but I do hear that it can be very profitable.

I'm retired already. It wasn't thru the domain business tho :) That's how I can spend so much time as a domainer :)

I think 4solutions may have alluded in his/her post to the answer to your question, stu2. And I'm in complete agreement.

Faith in what you've got, and patience to wait for the motivated buyer. If that means forever, then so be it. I'd rather hold on to a domain that I know is of high value than part with it for a short-term gain (and a long-term loss).

I find this an interesting topic trading vis-a-vis investing. Which gives the better ROI?

Sorry to hear about your experience, technanny. Just like any other business, sales sometimes fall through. It just seems like when you're hot you're hot and when you're cold... well, things will hopefully warm up. ;)

I'm one of these people who buy domains, not for investment, but because I have quiet and secret plans to dominate the world in specific industries. I could tell you more... but then I would have to kill you. :D

Seriously, my philosophy on domains is two fold: long-term and specialization.

I think the best opportunities to make money on domains is by specializing in industries that you already know. No one can keep up-to-date on every industry. So, if you focus on one or just a few industries that you are hopefully already familar with, then you will instantly recognize a true opportunity when you see it.

In addition, you should be willing to hold onto guality domain names for an "extended" period of time until you find the right "motivated" buyer. You will always get offers from timewasters and other investors. But what you are looking for, just like an antique or collectible dealer, is "THAT" customer who absolutely falls in love with what your have. Then, they will pay your price on your terms... and thank you for the opportunity to do so.

In other words... part of this business is having FAITH that what you have in your portfolio IS valuable and saleable... and then having the PATIENCE to hold onto it until the right buyer is found.

Your ultimate success is dependent upon your ability to choose quality domain names, find THE best buyers of those names, and your patience in waiting until those "motivated" buyers come along.





If it was easy then we would ALL be retired by now. ;)


4solutions

Your response was very well put and inspiring to me. I know I am not going get rich with this but it is something new for me to learn

I would like to know how many people make money selling domain names? Do you break even or make some money?.
If you are talking about selling domains in the aftermarket (secondary), then yes, you probably won't lose money unless you buy really lousy names. To be fair, like Bob has mentioned earlier in the thread, good names are very hard to get these days, unlike say 6 - 8 years ago. However, many latecomers make the mistake of registering some really poor domains. I have seen so-called "domainers" with full portfolios of like 500 - 1,000 names in which not even 10% would be worth even their registration fees (of $6 - 7).

Moreover, make sure you don't spend too much of your resources on expired domains which nowadays could cost an arm and a leg.

By the way, traffic is at most half of the story. Yes, Yun Ye made his fortune, but if you look more carefully into his portfolio (sold now), many of his names were very good NAMES (WORDS) too.

I made that mistake nameslave, I'll admit. But it's just part of the learning curve. I'm still making an acceptable return, if you don't count in the hours spent :) I'm getting 10% on ppc parking and 10% from the odd domain sale even with a crap portfolio, the majority of which earn $0. Of course when I weed out the duds, the potential return will be much higher once I get back my original investment which'll take maybe 3-4 years, unless I get lucky :) I've learnt a lot, and there's still more to learn, I think I'm in pretty good shape. In 4 years I expect to have doubled my investment, have better quality, and bigger ROI :) Of course, it's high risk/reward.

Maybe i am wrong (i dont sell names except a few i dont need anymore) but it seems to me in 2001 you spent 20% if time to get 80% of revenue with domain names. Today you have to spend 80% of time for 20% of revenue, comparing to 2001 or so. Market is too saturated and if you have really big money then you are better investing in some site than in 50.000 names.

But then again you can get some money by selling names, i am not saying is not profitable.

I made that mistake nameslave, I'll admit. But it's just part of the learning curve.
What made you want to get into the domain business at this stage? I see you're retired, so does that mean you're in the 50 to 70 age bracket? Do you see your domain business as a long term solid revenue generating asset?

What made you want to get into the domain business at this stage? I see you're retired, so does that mean you're in the 50 to 70 age bracket? Do you see your domain business as a long term solid revenue generating asset?

Is there a problem with some of us tha are in the 50-70 age bracket? (myself included)

Interesting thread. I wonder if any of the veterans can answer this question for me. I can't help but wonder if someone in the "domain business" should be mindful of the type of domains in inventory based on projected "hold" time. In other words, to compare to the stock market, you might buy some stocks fully expecting to hang on to them longer to maximize profit potential, whereas a portion of your portfolio might be more short term stocks that you would "flip" much sooner for smaller but quicker profit.

Is there a recommended ratio that one should strive for in a portfolio between long term versus short term inventory? Cash flow is important to any business and I would imagine that there has to be some minimum amount of stock rotation in order to keep a domain business solvent and healthy.

Vito

How can people afford to pay 6 to 7 figures for names? Do they have investors?

Is there a problem with some of us tha are in the 50-70 age bracket? (myself included)
No, why would there be?

I am attracted to domains since it is very similiar to real-estate. Like real estate you need to have money to make money.

i agree, but domains is such a different market. knowing that location is everything doesn't always help online.

What made you want to get into the domain business at this stage? I see you're retired, so does that mean you're in the 50 to 70 age bracket? Do you see your domain business as a long term solid revenue generating asset?

Yep. I'm at the lower end of that range. 6 months ago I started out as a speculator/trader in domain names and quickly realised that there is more to this business than I first imagined. I made all the classic mistakes and didn't do enough research into the whole business before starting. I've invested a reasonable sum of money in it, $xx,xxx. The strategy I've developed, for better or worse (probably worse) was not to put all my eggs in a few domains but to spread the risk. I've still much more to learn than I've learned already. I've got a crap portfolio of names, which will probably halve in size when renewals come around. I'm really making the returns I've mentioned elsewhere and really expect them to increase by at least another 50% after refining my strategies. It's been hard work and long hours. My original expectations were way too starry-eyed, but now with 6 months experience under my belt, I now expect I'll see my investment returned in approx 4 years, all of which will be ploughed back in, effectively doubling my investment. As I've said before, it's really high risk/return. It could all go poof! in a heartbeat.

Now, to answer your questions more specifically. The timing is/was entirely accidental. Being retired, there is a lot of time on your hands. The business was one I could run from home on my computer when the hours suited me (I got a bit of a rude awakening on that one). I don't NEED the extra money, but I'd be a bit miffed if it all went poof! I don't see domain speculation/trading as a solid business because of the risks involved, but based on my experiences (with a crap portfolio) I do believe it's a revenue generating asset for sure. And for sure, it could be a solid business if you picked up your domains 5-10 years ago. This may well be true after the next ten years. I also think that online ad revenue predictions provide some level of comfort that there is still substantial growth to come.

As for my future as a domain speculator/trader? At this point, I don't see me investing much more money in it , but expect to churn the domains in my portfolio from here on, out. I expect to improve the quality of my portfolio (well it couldn't get much lower) from being a nickel and dimeing bottom-feeder to being top of the bottom feeders :) With quality comes improved ROI's, imho. Probably the next six months I will learn as much as I've learned in the last six. After that I expect to cut back on the hours and at the same time have bigger revenues. I expect the value of my portfolio to continually increase. I would like to have the satisfaction of actually getting back my initial investment and look upon my entire portfolio as free :) That might happen 5-10 years down the road. Everybody has a different view of long term, but that 5-10 years is long term in my view of the world. I'm not doing this to build value to be passed on to my descendants.

I would do things a bit differently if I was to start all over again. Invest in better quality with fewer domains. Which is where I'm heading.

stu2, I hope you make it, whereever "it" is for you. It's uphill, without securing high quality domains, and entering the game at this late stage, but I'm a believer of never underestimating someone chasing a dream. :)

Maybe i am wrong (i dont sell names except a few i dont need anymore) but it seems to me in 2001 you spent 20% if time to get 80% of revenue with domain names. Today you have to spend 80% of time for 20% of revenue, comparing to 2001 or so. Market is too saturated and if you have really big money then you are better investing in some site than in 50.000 names.

But then again you can get some money by selling names, i am not saying is not profitable.

All of which is probably true.

stu2, I hope you make it, whereever "it" is for you. It's uphill, without securing high quality domains, and entering the game at this late stage, but I'm a believer of never underestimating someone chasing a dream. :)

All of which is probably true.

Good discussion. It's hard nowadays as 99% of good (and even terrible/obscure) domain names have been snapped up. So we're all hunting for the remaining 1%. I'm always stunned to find that even 15 character domain names with no meaning and surely next to no traffic have been registered.

Also, I think we all overvalue how much our domains are worth which leads to disappointment :(

I would do things a bit differently if I was to start all over again. Invest in better quality with fewer domains. Which is where I'm heading.
We all learn from our mistakes, and I wish you good luck.

As for newcomers, I would recommend AGAINST buying/registering a large number (like > 500) of domains all in say a couple of weeks (or even months). Instead, start out small and build up your portfolio in a more healthy pace. Moreover, when you consider each and every domain, THINK whether it will earn back at least the registration fee in a year's time; this way, you can at least avoid being in the red, except perhaps inflation or the opportunity cost of investing elsewhere. Just some quick thoughts.

I would agree with nameslave. Start out slow. It is easy to max out your cards when you get started only to realize it is a very long cycle to recoup your money

We all learn from our mistakes, and I wish you good luck.

Thanks. We all need it.

As for newcomers, I would recommend AGAINST buying/registering a large number (like > 500) of domains all in say a couple of weeks (or even months). Instead, start out small and build up your portfolio in a more healthy pace. Moreover, when you consider each and every domain, THINK whether it will earn back at least the registration fee in a year's time; this way, you can at least avoid being in the red, except perhaps inflation or the opportunity cost of investing elsewhere. Just some quick thoughts.

Just another one of my mistakes :( I do divide my domains into at least two categories, pure speculation and income generating. I don't mind that the pure speculation domains don't make any money, but of course I expect that all my income generating domains to at least earn their keep. Most don't. I calculate my ROI on my whole portfolio. So my real ROI on my incoming generating domains is higher than 20% I've mentioned elswhere..

I'm not bitching here. Just retelling my experiences. I'm reasonably satisfied with my outcome so far. I've learned from my mistakes and I take that as a positive indicator that the future looks brighter than the past. I've also not been an aggressive seller which I'm going to put more effort into this next 6 months.

It's very interesting to read about mistakes and lessons learned in this business. Especially for those of us who haven't even started.

Nice to see such wonderful perspectives from different levels of experience. I am going to stick it out longer.

Folks getting into the domain business, at this stage in the game, without significant capital to purchase high quality domains, are really swimming against the current. I admire that level of confidence, given the harshness of reality. :)

Folks getting into the domain business, at this stage in the game, without significant capital to purchase high quality domains, are really swimming against the current. I admire that level of confidence, given the harshness of reality. :)

I would tend to agree with you. It is a new challenge and it keeps my mind focused and fresh

Seriously, my philosophy on domains is two fold: long-term and specialization.

I think the best opportunities to make money on domains is by specializing in industries that you already know. No one can keep up-to-date on every industry. So, if you focus on one or just a few industries that you are hopefully already familar with, then you will instantly recognize a true opportunity when you see it.

I completely agree. I've been specializing in a specific industry, well demographic actually. I have about 110 domains and am looking at registering more.

I do not have the experience to look at long term. I am doing a litmus test to see if this is a money losing endevour or not.

I do not have the experience to look at long term. I am doing a litmus test to see if this is a money losing endevour or not.That's a good idea with any new business or venture. But do make allowances for a learning curve. One cannot expect to jump into a new river and immediately find all the best currents while avoiding the rocks and sand bars, too. ;)

I agree with you 4solutions

Folks getting into the domain business, at this stage in the game, without significant capital to purchase high quality domains, are really swimming against the current. I admire that level of confidence, given the harshness of reality. :)

I agree. I didn't realise how hard it would be. But so far, I'm making a reasonable return. It 's high risk/reward. I've proved to myself I can make some money with my modus operandum (at the bottom end). What is it those financial people say... past performance is no indicator of future earnings :)

Is it a good return if I include my hours spent? Probably not. But I see that as part of the cost of the learning curve. We shall see where the next 6 months, and after that, the next year, takes me.

Stu if you are doing well good for you. There is always hope for me

I'm reasonably satisfied with the outcome so far, considering I made mistakes. I think that a far cry from doing well :(

Folks getting into the domain business, at this stage in the game, without significant capital to purchase high quality domains, are really swimming against the current. I admire that level of confidence, given the harshness of reality. :)

I wouldn't fool myself to think that I could come up with new domain names that are worth big $, but from what I've read the business of developing domain names is still something that newcomers can be successful in.

Like someone learning real-estate, I am going to go slow and see how far it will take me.

I like to think of the domain business like and "empire" game like empire earth or starcraft.

Gather resources, refine resources, build refinery to optimize resource gathering, build army, conquer planet, galaxy. See? simple really.

I like to think of the domain business like and "empire" game like empire earth or starcraft.

Gather resources, refine resources, build refinery to optimize resource gathering, build army, conquer planet, galaxy. See? simple really.

What you said is over my head :)

I do not know the games you referred to. I am probably old enough to be your grandma

:)

Like someone learning real-estate, I am going to go slow and see how far it will take me.
But there's only a limited supply of real estate, and they're not making anymore subdivisions. How do you take a long term approach to that business, when there's no chance you can buy good real estate, unless you have substantial 6 figures to invest?

I don't know how folks can be so positive, getting into the domain business at this late stage. I mean, hosting is different from domains, as I know in 3 to 5 years from now my brand will be huge, with revenues of $100k/mth plus.

But in 3 to 5 years from now, folks now will be no closer to owning really valuable domains, if you don't own them now. It's never going to get better for domain investors, than it is now, and if you can't secure valuable property now, it's never going to happen, without substantial investments being made.

I'm an optimist, but I have to hand it to the domain folks starting out now without substantial $$$ to invest. They're the true believers.

But there's only a limited supply of real estate, and they're not making anymore subdivisions. How do you take a long term approach to that business, when there's no chance you can buy good real estate, unless you have substantial 6 figures to invest?

I don't know how folks can be so positive, getting into the domain business at this late stage. I mean, hosting is different from domains, as I know in 3 to 5 years from now my brand will be huge, with revenues of $100k/mth plus.

But in 3 to 5 years from now, folks now will be no closer to owning really valuable domains, if you don't own them now. It's never going to get better for domain investors, than it is now, and if you can't secure valuable property now, it's never going to happen, without substantial investments being made.

I'm an optimist, but I have to hand it to the domain folks starting out now without substantial $$$ to invest. They're the true believers.

I do not think I will make 100K a month or even 1K a month from this. As long as I do make a small profit, it keeps my mind sharp and give me something to enjoy doing.

I'm an optimist, but I have to hand it to the domain folks starting out now without substantial $$$ to invest. They're the true believers.

Absolutely correct. You have to have a niche and you have to be focussed.

I see people dumping their domain businesses all the time
Just look in the domain advertising forum

They're all noobs that didn't make it. Look at the quality of the names they're selling. All crap.