The Big Issues in the Domain Industry – Part 3

I’ve seen so many domain investors look at their domains and have delusions of grandeur with building them all out. A huge amount of money has been sacrificed on the developmental altar with very few people being successful. So why is this the case?

I want to say up front that there is no such thing as developing a domain name. Too many people believe that if they have the right domain they can just build a quick Wordpress site and voila! The masses will arrive and make them rich. This couldn’t be further from the truth!

Platforms such as Wordpress, Joomla, Drupal, Wix etc. are fantastic at solving many of the technical problems associated with development. What they don’t solve are the business problems.

Let’s imagine you are a domain investor with 1,000 domains and you just can’t stand having them parked. You dream of a little website on each of them. If you could only earn $1 per day from each domain, you’ll be able to quit your day job. Rather than a dream this is actually the beginnings of a nightmare where you’re about to lose your shirt.

For a start, developing 1,000 web sites takes a HUGE amount of effort and a lot of upfront investment. The ultimate goal of developing any website is to generate traffic from the search engines. This traffic is then monetised by selling advertising, or goods and services.

Let’s imagine you managed to get unique quality content on each site. The search engines will love it and index you! Hooray! The challenge will then be to keep on adding more and more new content the search engines will continue to love. Good luck!

If I need to update 1,000 websites in any given month then I need to work on 250 sites per week, or about 25 per hour (assuming a 40-hour work week) which is roughly one website every 2 minutes. Last time I checked, it takes a little longer than 2 minutes to write a blog or have any meaningful impact on a website.

The reason why domain parking or monetisation is so popular is because it’s scalable. Domain investors give up margin (largely to Google) in return for scalability. Yes, parked pages look terrible, but they provide a return that’s often far superior to anything else you can do with a domain portfolio.

As I said before, there’s no such thing as development. What we need to be thinking of is how we are going to build 1,000 businesses…..now that’s a challenge!

When we take a business perspective to our developmental strategy it means we need to have an administrative interface that allows us to instantly zoom in where we can have the greatest impact. Since we are talking about businesses, we need to be able to monitor our investment for each business and the returns being made.

This means we need to have traffic acquisition plugged in and the results measured, no matter what the business model being adopted for the domain. Those that don’t make the ROI cut will be dropped.

Building a system that can do all of this is no small task. I would venture to say that no individual portfolio owner could justify the expense and that it would require the efforts of a lot of investment capital or a very unique stepped strategy.

So should we throw up our hands and give up? Heck no! I'm a firm believer that every domain investor should build one domain into a business. Once it's profitable then repeat the process. It's a slow way to go but in the end you could have a whole suite of domains providing you with a great income.

In the next article I’m going to tackle one of my favourite topics…..traffic monetisation. Once again, there’s a lot that can be done with it so stay tuned.

In the meantime, don’t forget to involve yourself in the Domainer Network. Ask questions, post answers and participate in a rigorous discussion that’s only for domainers.