I get emails and comments every day. Asking more detailed questions about how I make money in this industry. I admit I don’t want to share every detail because I don’t want others copying my methods and competing with me for certain domains. But I can share more than I have, so I will. I will use the comment that was submitted a few days ago because it does a good job summing up all the questions I’ve received over the last few years. If I don’t give enough detail for you I’m sorry, it could be in tomorrow’s post. Be thankful I’ve shared 🙂
I had a couple of questions and was hoping you could answer them for me.
Q Can you tell us how much money you have invested to turn your profit so far this year. Nobody ever tells if they spent 50k to make 50k or 10k to make 30k etc……If possible don’t include the amount you have invested in unsold names but just the amount you have invested in sold names so far this year.
I’ve recently changed my business model for making money. Starting this year I decided I was going to sell domains for a profit. A simple turn and burn method. In the past I have purchased two types of names, 5 letter dot coms, and short dot coms. I decided to sell off names and start buying short liquid names only (a few exceptions which I’ll explain later) I started accepting the offers on some of the 5 letter dot coms if they were in the $2K range or more. I received 3 early on and funded my new strategy. My investment in these was generally $100 to $500. Names like sello dot com, I sold. I was waiting to sell for a much higher price but I figured I would cash in to build up a bankroll for my new strategy. I bought for $3K and sold for 4K. Hey, it’s a $1000. I immediately put that back to work and bought some NNNN.coms which I then put up at Namejet. Without being exact, I would roughly guess that in order to make $30K in profit selling names this year I have spent $20K. Many of the names I sold for $500 or $1000 profit and had that much in them. I “only” doubled my money. In any other business this is great. I have no overhead and most of my names I’ve owned for less than two years. Some less than 6 months. Long story short. I am comfortable doubling my money in one year and anything above that is gravy.
Q. How many names does that investment include. Did you spend 50k on 100 names or 50k on 1000 names and then flipped them. Just curious because it gives us beginners a baseline of what names are best to sell. I see a lot of people flipping 20 dollar names but I can’t imagine that is your strategy.
I own roughly 300 domains. I have them under several different companies and some under my personal name. I do this because I don’t want anyone following me on DomainTools. I have nothing to hide but nobody likes to be watched. Of those 300 I would say only 100 of them are “flippable”. I determine the value of my domain by asking the question “If it were up for auction on Namejet, how much would it sell for?” To me, that is the “cash value”. Names that I can cash in immediately have extra value to me. The rest are plant names, personal names, or need the right buyer. The positive is that of those that aren’t plant names, I have no more than reg fee to $70 in any of them. I have sold enough of them in the past to pay for the next 10 years, so they sit waiting for offers. I can afford to wait on those but the 100 flip names need to keep moving in and out. As for price of names I have purchased. 50% of them are $500 or more. Half of them are two word aged dot coms that I but under $100. I think these types of terms will only increase in value. They are getting more expensive but I still think they increase. I hunt daily on Godaddy for them and yes, they don’t make my list. I have purchased names like speedlift and unsportsmanlikeconduct in the dot coms for less than $20.
Lately I have purchased ( and will continue to purchase) 3 names over $5000 that have been very short 2 or 3 letter dot coms, net, or org. They are liquid and I have a decent grasp on pricing. The higher prices also means its much easier to sell to even a reseller and make a few thousand. I have no problem buying for 5K and reselling for $6500 in 30 days. People have no problem taking a pushed domain if its good enough.
Q. Are the majority of your flips to end users or other domainers, etc……and where did you sell them? Godaddy, Sedo, Afternic etc………
It’s no secret, I sell on Namejet and Godaddy. Mostly Namejet. I’m pretty sure 90% of my names are being purchased by other domainers. There have only been 3 that I know of that went to the end user for a site or an app. This year I have sold more domains privately than I ever have. I have also purchased many more privately than ever. The reason is simple. You want names that haven’t been passed around like the dirty girl in high school. You want no price history or history at all. There are plenty of these on the first round of Godaddy to buy, despite what people say. Google the name and you can easily find out. I often use the forums or simple email to reach out to domain owners to buy domain. The buyers have reached out to me. I have yet to ever reach out to sell a domain. Not one “would you be interested in this domain” has left from my email. I am going to start putting up Buy it Now names up at Sedo and Afternic this fall. I figure it fits in to my business model and might as well take care of Sedo’s 42% BUY it Now sell rate.
Q. Can you give us a break down of some of the sales. Example- NNNN.com bought for $500 sold for $2000
or LLL.com bought for $3000 sold for $5000 etc……
I am going to do this off the top of my head so if bare with me if I am a little off. The names are all dot com and all bought and sold this year. I purchased two NNNN.coms off of dnforum for $700 each and sold them for $4K each. I have no idea why they went for that. I truly never expected them to sell for $1200-$1500. I also purchased two 4NNN.com (started with 4) and paid roughly $750 and sold them for $1100 and $1200. After commission it wasn’t much profit but it WAS profit. I sold I know every thing (one word) for $4 or 5,000 and I paid a few hundred. I do buy at one auction house and resell at another. It’s a common practice for a few domainers. I know this because I do the daily list and see the names every day. My friends often ask me if I’ve seen the name come up before because I usually can remember if its been for sale recently. It’s easy money if a good name slips buy at Namejet or Godaddy and you simply relist or put up for auction somewhere else.
So there’s part one. I hope it helps. Maybe I revealed too much but I don’t think its anything revolutionary. It’s a simple business model. Get as many outlets to sell your product and then go out and try and buy it cheaper than you can sell it for. It only took me 5 years to get it all set up. From outlets, to bankroll, to the knowledge it takes to buy the right name for the right price. And yet I still get it wrong a lot. Fortunately, I’ve gotten it more right than wrong this year.