The buying and selling of internet domain names is a fine art to master but can be achieved by most people, just not on the same level as that of a professional.
I can admit: I am personally not a good domain name investor. It’s odd to say since my professional career is domain names, but someone can be a professional within the domain name industry (domain broker for an example) and still not be a good domain name investor. Though I certainly know a good domain name when I see one, that isn’t all you need to know to invest in domain names and be profitable doing it as a professional.
So where does the fine art part come in?
There are many different ways of investing in domain names.
Buy okay domain names at under $20 and sell volumes at some kind of a profit. Hard to sustain, and a lot of work to just make it by. Between renewals and constantly buying to keep up with volume selling, it certainly can be a tough go. Can this be done? Yes, and you can make some money in the process and learn a lot.
Buy low, and wait
Something I have personally seen over the years is that, for one reason or another, many domain names can take 3-5 years to sell. Sometimes, even “good” domain names take longer than 3-5 years to sell. It can be challenging to own a few hundred domain names and only sell a couple a year if that. Certainly not at the pro level but again, you can make some money over the long haul if you really like the ones you purchased.
Good, but expensive
This is a sweet spot to shoot for. Buying just a few domains that are good but more expensive. The catch? You have to have $XX,XXX to spend and not need a return on for a while. This is something that I personally have never been able to do but I certainly try. It has always been the lack of funding for myself. These domain names are easy to spot in expired domain name auctions, for example, but you have to have the funds to buy and hold for the right buyer. You also increase your chances of having to defend some of these names legally, which can cost $5K-$10K each to do it. It is easier to double up or much more in this method when sales happen. Buy a domain for $10K and sell it for $100K does happen, and pretty often, too. The biggest challenge is having the cash to spend and invest in the right names.
Big spender, big names, big dollars
A key example of this is a domain name investor by the name of Brent Oxley. Brent has built an outstanding generic domain name portfolio in a fairly short period of time but he consistently buys domain names for 5, 6, and even 7 figures. Big names = bigger sales when they take place.
Professional domain investor
These individuals are buying domain names now, consistently. They have domain name portfolio’s normally of 5,000 domain names or less. They consistently are buying domain names that wouldn’t wildly stick out at an expired domain name auction yet sell consistently to end-users for much more than they paid (Think of $69 buy / $5K+ sale). They buy creatively and not just from large expired domain name auction houses.
The professional domain investor level is where most domainers wish to achieve but few do it. Don’t get me wrong, there are a lot of people who buy and sell domain names. You can make money buying and selling domain names but just like anything in life, good things require dedication, hard work, and a special touch. Even if you put in the hard work, that doesn’t mean you are going to make it big or it will be your profession. Some things can't be taught and require natural talent, as if you were put on this earth for this very mission.
Even seeing the massive amounts of domain names that I do, every day (I monitor corporate domain name transactions, corporate domain name registrations and general domain name movements and other things) it is still very challenging to look at a large list of domain names and know which ones will sell to an end-user plus having the funds to purchase the domains that will. Again, I know a good domain name when I see one, but I often look at reported domain name sales and also consistently say to myself… “I wouldn’t have registered that one” or “I wouldn’t have picked that out of an expired list”. A pro needs to be the one who's putting those names in the sales lists. It’s a challenge. A learning process that also requires funds and time.
One may think a domain name broker would be a domain name investor. Most of the time they are not. They are professional sales people, often not professional domain name investors. Again, one would think all the pieces would be in place for them to be a domain name investor and I'm sure they do buy some domain names but again, not on a professional level. Most will lack that special touch of knowing and being able to buy the good ones.
No two domain names are the same, which makes domain name investing challenging. Yes, the obvious ones are good (Rocket.com, Money.com, Win.com, etc.) but you also have to be able to actually buy those and sell them for a profit, that’s the hard part.
Metrics with domain names vary. Some are not accurate, so if you get burned a couple of times, you will learn that only relying on a certain metric is not a wise choice. Picking a handful of domain names out of tens of thousands is the art and often done with very few, if any metrics.
Professional domain name investing is a very exciting and rewarding profession. Again, it may seem odd for me to say that I’m not a good domain name investor, but that is true. It’s okay, I don’t make my living being a domain name investor and I’m fine with that.
Domain name investing is a fine art and one that can be learned but also requires natural abilities that help you become a professional domain name investor.
The information contained in this blog is provided for informational purposes only and should not be construed as an endorsement, advice, or opinions from Uniregistry on any subject matter.