5 Things I Learned After Domaining for 9 Months

Potatoe

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I started investing in domain names less than a year ago, and it's been interesting (and profitable). I was reflecting on that today, and figured maybe someone would find something here useful.

I want to share some of my observations. I started out with a goal of learning the ropes so I could pick up better names for my own sites and it has been incredible for that, but it's turned into a decent little side hustle too.

I spent about $1000 on names, about half of that came from buying bundles from a very motivated seller who was quitting, and the rest I just picked up here and there. Save for one name that was $300, most of them cost me between $10 - $40.

I haven't really done anything as far as outreach goes, and all of my sales have been BIN, either through Sedo or Afternic. I should be googling all of my names, making lists of potential buyers, and hitting them up, or offering someone 20-30% to do so. This may be a part of my bigger strategy, or I might just keep things more on the passive side.

Handful of sales in the $200-$500 range, and most recently this week, within 3 days, I sold two different .co names for about $1000 each, both buy it now, both out of nowhere, both cost me under $50 less than 6 months ago.

Here are some things I've noticed...

5. Privacy

One thing that really stuck out to me was just the overall mentality when it comes to privacy.

Most of you probabally use privacy on your domains, whereas domainers seem to rarely use it. They want people to be able to get a hold of them easily. It's a trust thing too, having privacy on is a red flag in the domain world.

Instead of playing their cards close to their chest like us, they WANT everyone to know all of their domain names. That shift took a bit of getting used to.

4. It's not too late

Do you ever have that feeling that you're late to the party, when it comes to online opportunities? I'd often catch myself thinking back to being online ages ago, wishing I had snapped up some .com's 15 or 20 years ago, "all the good names are taken", etc.

There are still PLENTY of bargains to be had in the world of domain names, more on that in point #1...

3. It's still very much the "wild west"

It's actually kind of crazy what some of the big domain companies can get away with. For instance when it comes to drop catching... Usually it's around $60-$80 to get into the ring to bid on an auction when a name has expired.

There are some discounted services that charge about half, BUT the they (fine print) reserve the right to just buy it for themselves if you use the discounted service.

So, you could go full price for $79 to catch the drop, and you're all set to bid on it... Or you can go the discount route for $39, BUT the registrar uses that as a filter to decide which names to snap up on their own, for their own portfolios, based on the fact that someone else was willing to bid $39 on it. If nobody is willing to grab it for $39, they can assume it's not worth buying. If someone was going to pay $39, it tells them to take a closer look since there's value there. That's how I understand the discount drop catch services, at least, I could be off.

Another pretty egregious one was a company bought the rights to manage a bunch of those janky new TLD's, offered low prices on them so a bunch of people would buy them and develop sites on them, and then cranked up the prices. Some examples...

.juegos: $9.33 -> $300 per year
.flowers $17.67 -> $100 per year
.hosting $20 -> $300 per year

HugeDomains has been buying up an incredible amount of expiring domains (Upwards of 50% of expiring auctions on GD, I've heard). You've probabally seen them again and again while searching up names for your sites, usually charging around $2000 for names that you'd never imagine being worth that. I've heard of people trying to negotiate, with HugeDomain's response to negotiations being to just increase the price, along with many other events that can trigger a price increase.

Plus plenty of examples of registrars just clawing back names right out of people's accounts (I've seen them use the excuse "That name wasn't meant to be made available" if it was one of the really good ones that the registrars just hold on to instead of releasing publicly, or "It was priced incorrectly"...)

And with all of these things, it really comes down to... "Yeah, and what are you gonna do about it?"

2. Buying is more important than selling

Once thing I've observed, especially on domain forums where you can request names based on a criteria and people will send you their lists (ex: "Looking for a .com in the travel niche under $500), is that a lot of people are buying a lot of TRASH names. Like, absolute garbage.

What seems to happen is someone will land a big sale, and everyone will try to replicate it. For example, names that end with a repeating letter, like "fiverr". There will be a few decent sales, and then everyone starts buying stuff like "kitchensinkk.top", "Farmingg.cc" and whatever else.

Which is one aspect that's IDENTICAL to our world. Someone sees a site doing well, and then drops everything on their plate to copy it (You know who you are :[), not realizing that it takes more than just the right niche (or the right pattern, if we're talking domains...) and that if your last 10 projects have failed, stealing a niche from someone's case study isn't going to suddenly make you succeed. But I digress...

Anyways, people will send over these lists of domain names when you make a request for names, that they paid good money to register and renew each year, but every name is like a 1 in a million lottery ticket.

They spend all their time just hoping to find a greater fool for awful names, rather than spending that time on buying names in a much more disciplined way.

A rule of thumb I set for myself is to only buy names that I could see myself developing.

Granted, some of my sales were for names that I wouldn't even have handregged, that I got as part of a bundle, that I wasn't even planning to renew... so, who knows. It can go either way.

Obviously selling is how you're going to make money, but if you buy quality names, they sell themselves. If you buy very well, you don't really need to try to "sell" them - but on the contrary, if you buy poorly, you won't even be able to sell them if you try.

I'm averaging just about a sale per month, on a portfolio of under 50 names, which is supposedly a pretty good turnover based on what I've gathered.

Obviously, being a great salesperson will help a lot too, especially if you're doing outbound on your names, but first and foremost you need to buy sellable names.

Protip: If you're thinking of investing in domain names, spend a lot of time looking at auctions and sales first, BEFORE you start buying. Get a feel for what actually sells. Spend a little more on names that have value beyond just being lottery tickets. Some useful tools at the bottom of this post...

1. Location x3

A lot of those names you see listed on Sedo, Afternic, Voodoo, etc.. with landing pages for thousands of dollars can be snapped up for A LOT less money, if you look in the right places, or just approach it correctly.

A lot of people have their names listed in the big marketplaces at end-user prices, but are also willing to sell it to other domain investors for a FRACTION of the price, like 2%-3% of the original asking price.

So the next time you're looking at names to buy at full price, make sure you look around on the domaining forums because there's a decent chance you can approach them via the forum, instead of via the marketplace, and get a much lower reseller price.

You can check this out by searching for the domain name in different formats, since they'll often try to obscure from Google search. For example, if the name was "BuilderSociety.com" you could try searching...

"b u i l d e r s o c i e t y . c o m" or just "b u i l d e r s o c i e t y"
"buildersociety/com"
"buildersociety" AND "sale" (or AND domain, PM, offer, etc... words that might show up on a classified listing)

I had a domain for sale, listed on both Afternic and Sedo, with the price on Afternic being several hundred higher, and when you type in the URL itself it brought you to the Sedo landing page with the lower price listed, and they still bought it via Afternic. I can only assume these people bought the name without even typing it into their browser. Location, location, location... It's good to get listed on as many marketplaces as you can, you never know how someone will find your name.

I can't say much about negotiation since I haven't really done it yet, except on the buying side. The thing is, if I'm buying a name that I think is worth $1000, I don't really care if I spend $50 or $100 for it. If I'm not willing to spend $100, it's probabally not worth $50 to me either, so I try not to let any deals get ruined on names that I've decided I want.

Hopefully someone finds something useful here... I'll pop back and update in another 9 months or so, it's going to get really interesting now that I'm deep in the green and have validation. Inb4 "I hate domainers they ruin everything they're the scum of the internet."

Resources:

Namebio.com -
One of my favorites, you can see most of the recent, bigger domain name sales across major marketplaces. Also GREAT for research, you can type in a keyword to get a better idea on how to price your names, very very useful on the buying and selling side for finding comparables.

Dropcatch.com - For seeing what sells. I was surprised at how high some of the prices are for names here, but I think a lot of that has to do with SEO potential. I haven't bought anything from here, since the prices are pretty high, but I keep an eye on them.

Expiringdomains.net - Good place for keeping an eye on drops, good filters, I've flipped at least one name that I found on here.

Marketplaces at registrars: Namecheap has their own domain marketplace with expiring names, which puts you one step ahead before it actually expires. It's a LOT of sifting through lists and trying to come up with clever ways to filter, knowing that by the time it gets to the drop, there's already been PLENTY of much more skilled, more experienced domainers with infinitely bigger budgets that have already passed on it. None the less, there are lots of gems that make it through, too.
 

stackcash

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This is fantastic, @Potatoe.

I've always had domaining in the back of my head as something I'd like to get into to diversify revenue streams. My biggest bottleneck is time right now.

Once you understood how everything works - how much time each week did you need to put into all of this? I'm including the time it takes to educate yourself further, browsing potential buys, listing your portfolio on marketplaces, sending emails, writing sales copy, and facilitating actual sales.

What is the average profit you're seeing per month on a portfolio of 50 sites with one sale per month? Do you anticipate that profit increasing or decreasing at scale....say @ 500 sites w 10 sales per month?
 

Potatoe

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@stackcash

The time commitment in my case was top heavy, I'd spend probably an hour or two a day browsing domain forums, completed sales, auctions, etc.. I haven't done nearly as much of that lately but these recent sales have got me digging through the lists again (And just today I got an inquiry on my best name, so that'll be interesting..)

I honestly haven't put a ton of time into it in the grand scheme of things, I think I'm up about $3000, so the monthly average works out to a few hundred per month, and out of those 9 months I'd say there are more of them where I didn't touch a thing, than months where I was actively working on this. Before the two bigger most recent sales, I'd basically broken even on what the portfolio cost me to build, plus I own all these names now.

Once you get some quality names, if you're not doing outbound, there's not really a lot to do. It takes a moment to get them listed in the marketplaces. I haven't had to write any copy since I just use Sedo landing pages for the most part.

You could make custom landing pages for each domain and host them yourself, but it's pretty standard to either use the offer pages from sedo/afternic/etc, or something like efty.com to showcase your names.

The nice thing is that if you have 15 minutes to kill, you can dig through some names, look through some sales, or you can spend hours at it too. It appeals to me because it can be as hands-off as I want while I focus on other stuff, and I can always circle back whenever I have the time.

A lot of your experience and skills in IM and managing clients would translate over to domains @stackcash, I can't imagine there being a huge difference between people who see the value in great content, and people who see the value in great branding. I think there's a lot of crossover potential for the outreach pros like @Steve Brownlie too, except instead of prospecting for guest posts, it would be reaching out to potential end users for domains.
 

bash

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Sorry for necro but just curious if you have a breakdown on the type of domains you're going for.

Are you mostly hunting for good backlink metrics or more for brandable keywords to sell for a premium?

If the main goal is for PBN domains do you recommend any specific auction service over the others? Most of the PBN domains I acquire are from scraping which is something I think most people do here nowadays.
 

Potatoe

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@bash

I don't check into the backlinks or histories of any names anymore. The only thing I'm taking into consideration is price and if I think it's a good brand / something a business would buy.

I look for 1-dictionary-word names in cheaper extensions like .co, and in .com I'm usually looking for two-word combos.

I don't know the first thing about finding names for PBNs so I can't offer any advice there.

---------

Might as well give a quick update to this thread, too.

I've only sold one name since April, and haven't even had any other inquiries or offers. It was a two-word .com that I handregged for $10. Two weeks after registering it, somebody emailed offering $200 and I ended up selling it for $300.
 
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How do you think the market is evolving, is there less profit than before? where is its future headed? Have all the new tlds devalued .coms greatly and a personal question... For a domain im about to buy would you recommend twowords.com or oneword.solutions solutions seems like a cleaner name but im hesitant people dont completely trust clicking tlds.