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How to Turn a Profit with Domains

20181119_profit Planning for profit

Over the last few years I’ve watched many domain investors throw money at some pretty crazy ideas and invest in nonsensical domains. Some of these investors have already completely burnt their cash and have exited the industry.

I’ve also watched the quite diligent investors that have methodically planned how they are going to get a return on their investment….and they’re making money hand over fist!

Escrow.com

The secret to any business really isn’t a secret at all but it does require a sustained level of tenacity and diligence. Everything in business starts with a plan and the end point of the plan should ultimately be how the business is going to be sustainable and turn a profit.

When I look at investing in domains it’s exactly the same thing. You need a plan. If you don’t have a plan, then you are very likely about to burn through some of your kids’ inheritance.

Let’s get down to the basics. If you have a reasonable sized domain portfolio, I can almost guarantee that 20% of the domains should be monetised for their traffic. This will provide an immediate cashflow that will at the very least help out with renewals or you may find yourself in the enviable situation of turning over an immediate profit.

Don’t believe all the naysayers that tell you that traffic monetisation is dead. It’s not! We have clients that are doing literally millions of dollars a year in revenue from their traffic. Why is this? It’s really simple, advertisers will always want valuable traffic.

Now that you’re monetising the domains with traffic you need to focus on the “stock-item” domains you have for sale. These domains will sell for around $1500 and the goal is to sell as many of them as possible each year. A stock-turn of around 2-3% would be awesome.

My guess, is about 98% of the remaining domains will fall into the stock-turn category. Don’t try and sell these domains for $10k+…..you’ll waste time and lose sales. Just get them into every marketplace you can. If you aren’t selling domains then either they don’t have exposure or you have domains people just aren’t interested in…..drop those and source different ones.

Here’s something really important. Build a webpage that features your domains. Put a link at the top of your traffic domains that points to this page (this is easy to do with ParkLogic – in fact, you can even have a different link per portfolio). This means you are using your traffic to potentially drive interest in the domains you have for sale.

Each of the domains on your stock-item page should be categorised, priced and with a link to the major marketplaces/Escrow next to them. With a click of the mouse the buyer can choose the option they would like to use to purchase the domain.

Now for the handful of domains that I will call premium quality. Get a respected domain broker to price the domains for you. Don’t fall into the trap of what you think they’re worth…..that’s irrelevant. Treat the broker (assuming you have a good one) as a professional and get their opinion….then engage their services on one or two of the domains.

DON’T screw their commission down….what’s the point???? We are in a massive supply market, so they’ll just ignore your domain and sell someone else’s. What you want from the broker is a plan on how they are going to sell your domain and then hold them to it. I would even go so far as paying them a retainer of some description.

Now take one of those premium domains and build it into a business. Since you’ve outsourced the monetisation, stock-items and premium sales then you should have plenty of time to focus on this one domain.

There’s plenty of solutions out there that will allow you to build this domain into a business that will have the potential to eclipse everything else you are doing. My one word of advice is to choose one that you’re passionate about and not one that you think will make you a lot of money.

When you look at the above plan it's really not rocket science. All I've done is hit all the business models for generating a profit from your domain portfolio. There’s a certain amount of ruthlessness in the approach but I’m only this inclined because I believe every business should turn a profit, so they are sustainable.

I wish you all the best with your own plans.

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Thursday, 13 December 2018
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