In many ways, most domain name investment is better labeled as speculation……… Less is more – quality over quantity. Don’t invest unless you understand the quality of a domain, and your options to cash out.
– Alan Dunn at NameCorp
I’ve just completed my fourth year of an exciting and profitable domaining adventure. So today, at the start of a new year, I’m looking back and sharing my reflections on my past successes and failures. This includes insights, stats and some year over year sales analysis.
Keep in mind that I characterize myself as a journeyman domainer investing, almost exclusively, in dot-com, brandable domains. Everyone’s journey is different but here’s the story of mine.
I bought a handful of domains in 2014 after seeing a YouTube video saying there was money to be made developing your own websites. The video said it was easy and financially rewarding. The reality (at least for me) was a bit different.
Buying the domain was easy. Doing web development, search engine optimization, monetizing traffic and then finding a buyer for the website was something else entirely. I spent about 100 hours on this project and ending up selling one website, on Flippa, for about $250.
It goes without saying that this was a misuse of my time. A huge setback and a false start. But because I only owned a handful of domains that were exclusively for development, I don’t count it as a year of domaining – but rather a failed attempt at development.
BECOMING A DOMAINER
In 2015 I discovered brandable domains and the BrandBucket platform. I abandoned the 3-4 other websites I was starting to build and changed my approach completely. First thing I did was hand register about 400 domains over a period of a few months. At least half of them I purchased for $1 to $6 using GoDaddy coupons.
As you might imagine most of them were not marketable and only a very small percentage were accepted for publication at BrandBucket. I was, however, able to cut my losses by selling almost all of the rejects on NamePros for $3 to $10. Others I kept and listed for sale on GoDaddy Premium and Afternic.
I then started buying domains in GoDaddy auctions and closeouts – instead of hand regging. But this didn’t work out much better. Most of the aftermarket domains I bought were again rejected by BrandBucket and I was wasting even more money.
Still, I kept at it despite my financial losses and frustration. Slowly, overtime my name picking skills improved and I developed a method for more carefully hand registering domains along with occasional purchases at the GoDaddy auctions and closeouts. My acceptance rate at BrandBucket steadily improved. I didn’t have a fixed percentage in mind but my domain purchases ended up being about 80% hand registrations and 20% GoDaddy aftermarket.
I built my portfolio rather rapidly, for a beginner, and had about 350 domains on BrandBucket before I even had a sale. It was quite a leap of faith and when I got to around 300 domains I began to get nervous. So I cut way, way back on my domain buying for the rest of the year and waited for sales to catch up. That worked out and I ended the year with handful of sales.
My 2015 end user sales totals:
- Private sales (2)
- GoDaddy Premium (2)
- BrandBucket (2)
- Avg domain length = 8.8 letters
- Avg time from purchase to sale = 116 days
- Percent of sales that were hand registered domains = 100%
PERSEVERANCE PAYS OFF
In 2016 I realized that when I bought a domain I had to be thinking 6-18 months out into the future. I had to anticipate naming trends rather than imitating past listings.
I began reading TechCrunch and related websites every day. I studied the new domains being published on BrandBucket and other brandable domain platforms. I began following the NameBio daily report. I made friends and learned a few tips and tricks.
But mostly I was patient and kept learning and working to grow my business. I believed that my patience would eventually pay off in sales and profits. It turned out I was right as I sold two domains on BrandBucket the very next month and had steady sales the rest of the year.
My 2016 end user sales totals:
- Private sales (1)
- GoDaddy Premium (3)
- Afternic (3)
- BrandBucket (19)
- Avg domain length = 8.5 letters
- Avg time from purchase to sale = 170 days
- Percent of sales that were hand registered domains = 57%
2015 vs 2016 – Year over Year
- Number of sales was 325% higher
- Average sale price was 72% higher
IF IT AIN’T BROKE, MAKE IT BETTER
In 2017 I focused on consolidation and expansion of profits. I had a system that was working but my business didn’t seem to be growing. By the middle of year, I had over 2300 domains in my portfolio (1750 at BrandBucket) but my monthly registration renewals and a lackluster sell through rate were taking a big bite out of my profits.
My portfolio was growing rapidly but my sales were stagnant. So I decided to make some changes. I took a hard look at my portfolio and got rid of nearly 25% of my holdings by selling them wholesale or letting them expire. I got rid of my lower quality, lower priced domains as well as many longer domains that weren’t selling as well as the shorter domains I owned.
In summary, I began to consciously emphasize quality over quantity while still targeting the mid-priced, brandable end user, sweet spot.
My 2017 end user sales:
- Private (1)
- GoDaddy Premium (2)
- Afternic (1)
- Flippa (1)
- BrandBucket (23)
- Avg domain length = 8.2 letters
- Avg time from purchase to sale = 356 days
- Percent of sales that were hand registered domains = 72%
2016 vs. 2017 – Year over Year
- Number of sales was 8% higher
- Average sale price was 7% higher
MY BEST YEAR YET
It took me all of 2017 and part of 2018 to do a complete makeover of my portfolio but it really paid off. In 2018, my gross sales totals went up more than 60% in spite of having 25% less inventory.
My renewed focus on higher quality and shorter domains, particularly the 4 and 5 letter domains, took my sales to a whole new level.
At the present time I own about 1700 domains. About 1500 on BrandBucket and 200 listed for sale on other platforms.
My 2018 end user sales totals:
- Private (5)
- GoDaddy Premium (1)
- Afternic (0)
- Flippa (0)
- BrandBucket (29)
- Avg domain length = 8.2 letters
- Avg time from purchase to sale = 632 days
- Percent of sales that were hand registered domains = 60%
- 2018 portfolio sell through rate = 2%
2017 vs. 2018 – Year over Year
- Number of sales was 25% higher
- Average sale price was 23% higher
SUMMARY OF ALL FOUR YEARS
There are many paths to success and failure in domaining. This is my journey. Many have done better. Many have done worse. It doesn’t matter. Each person follows their own progress.
Investing style, budget, temperament, strengths and weaknesses will be different for each person. Hopefully I’ve given you some things to think about or at least provided a measuring stick for your own successes.
Overall the key components of my success have been:
- Having a multi-year plan and being patient
- Keeping good records and stats
- Mastering one style of domain investing at a time
- Finding a formula that works and refining and repeating it
- Expanding slowly, gradually and steadily
- Learning from reputable sources and avoiding advice from anonymous voices on forums
- Being flexible and moving with the market
Wishing you prosperity, happiness and success in the New Year!!