Everyone has a different approach to how they make money. Some are sales driven, some are cost driven. Some are driven by expectations of no profit but a profitable buy out in the end. Despite what you read all over the Internet, there is no right or wrong way to do it as long as you make a profit in the end. But I have an approach that I use that has been successful for every business I have built. And yes, domain investing is a business. The key to me is this. Focus on creating sales outlets for your product first.
The old saying is “if you have a good product the customers will find you”. It’s absolutely false. Often they won’t, especially on the Internet. Anyone can buy a domain. All it takes is money. But selling it for more money is a whole other ballgame. Even worse, most doing it consistently is tough. Sure, a fantastic domain will eventually sell itself but starting out and even now, I don’t have fantastic domains. Good yes, gotta have them, no. So the first thing I did when I got in this business is ask the question “How do I sell these things after I buy them?” I ask this question because we have the same problem in the plant business. Almost anyone can grow a tree. But selling lots of them is difficult. I’ve watched countless people lose their ass trying to grow trees because they see a nursery like mine getting $250 for a tree that I spent $20 on as a seedling. They don’t realize we spent millions of dollars and 20 years creating a market to sell them. Domain investing is no different. If you want to make consistent money in this business you have to have an outlet. My first step was starting a blog
I started this blog because I figured it would add a place for me to sell my domains. I started by listing my domains that I had for sale in a special section on my blog. I soon found out that it didn’t work. I never really received any offers of any substance for my names. The real value of my blog was getting my name out there and developing relationships with people could help me sell my names. I knew I had to find other outlets for my domains. So I started focusing on the auctions again (I had already been selling a few names there) . At the time Bido and Sedo were two places that had auctions. I focused on Sedo at first, tried Bido but wasn’t happy with the results, and then focused again on Sedo.
The way Sedo worked is you had to have someone make a bid and you could chose to take it or send it to auction. I learned that other domain investors simply made low bids on each others names and sent them to auction. Sedo auctions were popular then and always received a lot of attention so whatever a name sold for was a realistic value of a domain at it’s resale price. What Namejet is today. That lasted for a year or two and eventually the results at Sedo weren’t strong enough to put the names up for auction. So I moved my concentration to landing page sales.
I made sure that every domain I owned had a lander that let the visitor know that the domain was for sale. Sedo was the best at the time for this as well. I did some on my own and others at Sedo. It led to more sales than the auctions but again not enough to make a good profit. Then things changed. I went to domain conferences.
It was a few simple conversations over beers that led me to some revelations and some changes in the industry that would help me sell. Last year’s DomainFest included a meeting with Frank Schilling (in reality I was sick at the hotel room for the meeting) but it was the unveiling of Domain Name Sales. A product that was doing everything Sedo was doing but no commission and more parking money. It was huge. I also learned more about Godaddy’s premium listings and how to utilize them for more sales. I developed relationships with brokers and other companies that would help sell my names. All in a few days at a few conferences.
When it was all said and done. After 3 years I finally felt I had outlets to move domains. Now all I had to do was acquire good domains. I felt I already had some good domains. With these outlets 2012 was fantastic. My CVCV.coms, my NNNN.coms, and my 5L.coms turned into gold when put in the right hands. With that money I have been buying better names which in turn are easier to sell. It’s a snowball effect that has been created by having multiple outlets to sell names. I started with very little money but I kept selling at a profit and reinvesting and building up the portfolio. Time and sales is all it takes. The first one most of us have but the second one takes some work.
I understand if you have category killer domains all of this isn’t necessary but I don’t. Most people don’t. I have a combination of Ok to good names. I need to have the ability to keep cash flow up by selling names at small profits in order to have the resources to wait for the bigger scores later. Waiting for good prices is not a problem if you don’t need the money. Another key is don’t have junk domains. You can have all the sales outlets in the world but if your product sucks then it won’t sell. You are looking for cheap OK names, selling them to buy good names, and with time great names. I am hoping that day comes for me and I can simply wait for the big offers. But until that day, I am thankful for the Godaddys, the Internet Traffics, the Sedo’s, the Namejets, the Andrew Roseners of the Industry that give me sales.