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4 minutes reading time (847 words)

Is Domain Investing Dead?

20180212_dead

Many people have come to the conclusion that investing in domains is dead and yet from my perspective the industry appears to be flourishing. The first distinction we need to make is whether you are part of the industry or a customer of the industry.

Escrow.com

Over the last few years many new gTLD registries have been stomping the pavement and doing whatever they can to convince investors to buy domains with their extensions. When investors purchase the domains, they are the customers of both their registrar and ultimately the registry.

The registrar and the registry have done their job…..they just convinced you to register a domain name. The ball is now in your court to decide what you’re going to do with it to provide a return on your investment.

It is NOT the registries responsibility to support the reason why you registered the domain. I know this may seem like bad news but the registries do not have a responsibility to ensure you get a return on your investment….that’s your job.

The only time a registry will possibly be concerned is if the net position of new registrations and renewals goes into a negative trend. If this is the case, they will attempt to stimulate demand through advertising efforts, but they are very unlikely to try and rescue your investments.

Some investors believe that once they have a domain, money will fall from the sky and they will get instantly rich. As many are now discovering, this couldn’t be further from the truth. The question remains, how do you make money as a domain investor?

I keep on coming back to the four domain investment business models; development, traffic monetisation, stock item sales and high value sales. Every domain investment must be clearly in a least one of those four buckets to have any chance of providing a return on the investment.

The mistake many investors make is believing that their domains are all in the high value sales category. They come to this conclusion because they don’t want to develop them into real businesses (that’s a lot of work), the domains don’t have traffic and selling domains as stock items sounds a little bit like penny pinching. This leaves the only possible business model left and some investors have come to the conclusion that are holding premium high value domains! Go figure?????

There is one other business model that I often fail to mention….my apologies for this. It’s the vanity business model. The domain investor has no business case for their domains but just likes them. It seems a little silly to me as it’s unsustainable but after walking around NamesCon for about 30 seconds you can’t help but get accosted but investors holding domains in this category.

Sadly, domain investing will appear to be dead to these types of investors…..my advice is to drop the majority of your domains and focus on getting profitable.

So which investors are making money in the domain industry? In a nutshell, those with repeatable revenue are still making a killing. What do I mean by this? Traffic monetisation is still a big repeatable source of revenue for successful domain investors.

Investors that have developed businesses off their domains have repeatable revenue….so they are also successful. Just on this, I’ve been spending some time developing traveltrek.club to build up a completely separate revenue stream for myself…..slowly but surely it's gaining traction.

The nice thing about stock item domains is you can create a repeatable revenue stream model. Selling domains for sub $3,000 can still provide a great return on your investment.

The problem with high value domains is there are very few buyers looking to purchase domains at those lofty numbers. You have to have an absolutely compelling proposition if you want to sell a domain for massive valuations. It’s more than YOU believing you have awesome domains…..it’s about the BUYER believing you do.

If you’re sitting moaning a groaning about your upcoming big renewal bill and how the industry has died, then think again. It’s not dead….you just need to re-evaluate what you’re doing. There are many, many people that are making a LOT of money and some of them have only just started in the industry.

What’s the key to making money? Get some good advice from people that are successful and be prepared to pay for it. Successful people are busy and have a lot on their plate. They’ll be polite but if you really want their attention pay them for their time.

I’m upfront in saying that I charge for my time and I’ve found the service provided by clarity.fm has been a wonderful way of vetting the time wasters versus those individuals that are serious about domain investing. I’m very strict on how much time I allocate each month for consulting…..I have a LOT on my plate. Feel free to book some time if you would like to get some advice on your domain investment strategy.

I know the industry is absolutely alive and well....you just may need some help in changing your approach.

New gTLDs - Domain Investors Matter!
My Business Success!
 

Comments

Guest - Jim on 13 February 2018
Great Post Michael - You Hit it on the Nose!

Hey Michael,
I have to say that was a great post on what it takes to be successful in domaining - from evaluating what kind of domains you have (will buy) and matching that with your business model. "repeatable revenue" is a phrase that struck a core with me. You are absolutely right on the importance of this to the business model.
Thanks for the post - I've been at this for alotta years and this made me think and reevaluate again. Much thanks!
Cheers,
Jim

Hey Michael, I have to say that was a great post on what it takes to be successful in domaining - from evaluating what kind of domains you have (will buy) and matching that with your business model. "repeatable revenue" is a phrase that struck a core with me. You are absolutely right on the importance of this to the business model. Thanks for the post - I've been at this for alotta years and this made me think and reevaluate again. Much thanks! Cheers, Jim
mgilmour on 13 February 2018

Happy to help out Jim. Repeatable revenue is one of the reasons why I like traffic monetisation so much.

Happy to help out Jim. Repeatable revenue is one of the reasons why I like traffic monetisation so much.
Guest - nick on 13 February 2018
Great read

I enjoyed reading your post. I have been investing in domains since 1999. I have roughly own 2000 .com domains and continue to sell them via various marketplaces: Sedo, Afternic, Efty, BrandBucket, etc.

The domain market took a hit during the social media digital advertising campaigns in early 2010s - http://facebook.com/yourname, @companyname and #productname.

Personally, I never understood why companies intentionally drove traffic away from their sites to the social media conglomerates.

Fortunately, this trend has changed. Over the past few years, the focus has undeniably returned to the .com address. Nearly all TV, radio and print ads contain the .com extension. Companies must have companyname.com to have any legitimacy today. When people think of anything online, they automatically append .com to it; this fact seems to be generational.

With the recent cut in the corporate tax rate and the booming economy, I predict 2018 will be a banner year for domain name sales.

I enjoyed reading your post. I have been investing in domains since 1999. I have roughly own 2000 .com domains and continue to sell them via various marketplaces: Sedo, Afternic, Efty, BrandBucket, etc. The domain market took a hit during the social media digital advertising campaigns in early 2010s - facebook.com/yourname, @companyname and #productname. Personally, I never understood why companies intentionally drove traffic away from their sites to the social media conglomerates. Fortunately, this trend has changed. Over the past few years, the focus has undeniably returned to the .com address. Nearly all TV, radio and print ads contain the .com extension. Companies must have [i]companyname.com[/i] to have any legitimacy today. When people think of anything online, they automatically append .com to it; this fact seems to be generational. With the recent cut in the corporate tax rate and the booming economy, I predict 2018 will be a banner year for domain name sales.
mgilmour on 14 February 2018

Many thanks for your comment....you've been in the industry for a while! I'd love to have a chat with you directly if you have some time. You can reach out to me here in the "domainers network" or directly at http://parklogic.com.

I look forward to hearing from you.

Many thanks for your comment....you've been in the industry for a while! I'd love to have a chat with you directly if you have some time. You can reach out to me here in the "domainers network" or directly at http://parklogic.com. I look forward to hearing from you.
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