Around 1 year ago, I wrote a post on the Top 10 Things I’ve Learned in Domaining After 1 Year.
Well, now that we’re two years in, it’s time to expand on that, give a full update on my domaining business and share a few lessons I’ve learned.
I bought my first domain off the drop on May 20th, 2011. But August 23rd is when my domaining cherry popped (ie I sold my first domain name).
As I’ve stressed numerous times in my monthly traffic reports, I am far from an expert in domaining. If you’d like to learn more about the industry from seasoned professionals, I’d recommend checking out Domain Sherpa, ElliotsBlog, DomainShane, DNJournal, RicksBlog, Morgan Linton and AccidentalDomainer.
But if you’d like to continue reading about a fledgling domainer and full-time Internet Marketer who has figured out how to make some extra cash through domain sales, then here ya go…
My Top 10 Lessons in Domaining – 2 Years In
I’m all about transparency here. In my monthly reports, I give full insight into my traffic levels (both good and bad).
With our SEO clients, we are 100% transparent in our work, our accomplishments and what we are doing to help grow our clients’ business.
With insight into my domaining business, I provide the same transparency you’ve come to expect (up to a point… I do not disclose the specific domains I buy and sell…).
What’s more is that this type of post helps me keep track of the going-ons of my business. It forces me to take a cold, hard look at my domaining business and determine what’s working and what is not.
In last year’s post, I broke down the economics of my business. Last year’s post was written in September and a full 1.5 years into buying and selling domain names. So the comparison numbers are slightly skewed. My growth has actually been greater than these numbers portray (comparing 13 months of selling names and 1.5 years of buying vs 1 year of buying and selling).
(I did my best to color coordinate based on improvements (green) and areas that worsened (red)).
Number of Domains Purchased: 57 (Last Year: 87 | Difference: -30 )
Number of Domains Sold: 14 (Last Year: 13 | Difference: +1 )
Number of Domains Dropped: 16 (Last Year: 14 | Difference: +2 )
Total Money Spent on Domains: $10,624.45 (Last Year: $8,107.96 | Difference: $2,516.49)
Gross Sales: $23,900.00 (Last Year: $18,150.00 | Difference: $5,750.00)
Sale Fees (PayPal, Escrow etc.): $1,067.27 (Last Year: 575.60 | Difference: $+491.67)
*Renewal Fees: $246.76 (Last Year: $732.13 | Difference: $-485.37)
**Parking Revenue: $266.93 (Last Year: $78.92 | Difference: $188.01)
Gross Revenue: $24,166.93 (Last Year: $18,228.92 | Difference: $5,938.01 )
Total Expenses: $11,938.48 (Last Year: $9,415.69 | Difference: $+2,522.79 )
Net Income from Domaining: $12,228.45 (Last Year: $8,813.23 | Difference: $3,415.22)
*Why are my renewal fees significantly less? For simplicity’s sake, I’m comparing all of 2011 (roughly 7 months of data) and 2012 to all of 2013 (thus far). My system is far from perfect for this series of posts, but it will have to do for now. Renewal fees were not originally included in last year’s report. However, I’ve since gone and edited last year’s report to add those numbers in.
**For simplicity’s sake, I am comparing all of 2011 (roughly 7 months of data) and 2012′s parking to thus far in 2013. Parking numbers were not originally included in last year’s report. However, I’ve since gone and edited last year’s report to add those numbers in.
All in all, not bad! $3,415.22 MORE in net income. Also, I spent $3,000 on a name this year that I’ve been unable to sell. And that’s from spending more on domain names in general (and more per average). Those names I’ve been unable to sell are high quality names, sitting and waiting for the right buyer. So over all an improvement in revenue and a drastic improvement in long-term assets.
The $3,415.22 net improvement is a 38.75% improvement year over year. I’ll take that!
OK. Now onto the lessons I learned this year.
Lesson #1: Don’t Assume a Sale is In the Bank Until Payment is Received
Over the last year, 3 businesses have agreed to a domain sale. I stopped marketing, cracked open a beer and relaxed. A day (or week) later they changed their mind. One sale was for $1,500, one for $3,500 and one for $3,250.
Ouch.
I’ve tried to figure out how I can stop this from happening. One thought I’ve had is to simply take their credit card over the phone and bypass Escrow for buyers that I don’t feel 100% confident in. Haven’t tried it yet. What are your thoughts?
Lesson #2: Just Because You Spend $X,XXX for a Name Does Not Mean It’s Even Worth That to a Business
I spent $2,995 on one name this year. It was my most expensive purchase and a real estate related name.
City+Homes.com.
I thought it was a great name, especially because this city (well, more of a large suburb) is going through a revitalization period.
I couldn’t get a single real estate agent to offer more than $1,500. I still own the name.
Lesson #3: Just Because You Spend $X for a Name Does Not Mean You Can’t Resell It For $XXX
Don’t let your purchase price dictate your asking price. Always start high.
I’ve bought a few GoDaddy close-out domain names and have had good luck reselling them for mid to high 3 figures. I’d do that everyday of the week.
Lesson #4: We’re In This Game to Make MONEY. Not To Amass a Collection
What other business can you buy something for a few hundred bucks and turn around and re-sell it in less than 2 weeks for a few thousand?
You did not lose because you only made $1,000 on a name you purchased for $300. Yes, you could hold out and wait for an offer and you might make more, but can you afford to do that? I know I can’t.
If you have a massive portfolio of phenomenal names and are getting offers on a daily basis, then yes, wait. But 99% of us are not Frank Schilling or Mike Mann.
Lesson #5: Develop a System to Market and Sell Names
I’ve detailed my system of marketing and selling names here.
Basically, I use both BuzzStream and a Virtual Assistant to do 95% of the work for me.
This frees me up to focus on Brighter Vision, new ventures and spend time with my son. If you are required to do all the buying, marketing and selling you are not creating a business. You’re creating a job.
Lesson #6: Monitor Your Email Deliverability & Opens
I use Sendgrid to monitor my email. It ensures my emails are delivered and opened.
When I see someone I open an email numerous times over the course of a few days, they are likely interested.
In this case, I follow up with a phone call. I’ve sold 2 names this way that I might have not sold otherwise.
Lesson #7: Use DNJournal’s Weekly Sales Reports to Your Advantage
There are countless benefits to monitoring the work Ron Jackson does with DNJournal’s weekly sales reports.
One trick I’ve used to my advantage this past year is that when I see a name sell that’s similar to one I own, I’ll note in my spreadsheet of names the name that sold, the date and the sales price.
Yes, you can always use tools like
NameBio for Comps, but by doing things this way, you can start to notice trends and adjust your prices accordingly (or re-market).
Lesson #8: ABC.
Always. Be. Closing.
If you’re not closing, you’re not making money. Simple, right? Well, not that simple to hundreds of domainers out there.
If you aren’t closing, figure out why:
Are you not marketing your names?
Are you overpricing your names?
Are you buying shit names?
Remember, we’re trying to make MONEY here. Not amass a collection.
Lesson #9: Names That Generate Parking Revenue ROCK.
Of my 130+/- names, about a half dozen generate noticeable parking revenue.
To me, those names are not for sale except for a massive premium.
This parking revenue helps pay the renewal fees on my other names and renewal fees do begin to add up. When you’ve found names that generate solid parking revenue, be sure to remove a Buy It Now price on the after market platforms.
Lesson #10: Stop Reading and Start Taking the RIGHT Action.
This was my final lesson last year. But it still rings true.
Take $500 and buy one or two names. Then sell them.
Then do it again.
And again.
And again.
If all you do is spend $70 every week on crap names, park them on
Sedo and
Afternic, read Domaining blogs and wonder why you can’t make money in this business, then you aren’t taking the right actions.
Invest in good names. Market. Sell for a profit. Rinse and repeat.
Making money in domaining isn’t brain surgery. It isn’t easy, especially at this point in the game, but it can be done.
I sold my first name 2 years ago and I’ve since made a little over $20,000 in profit. I’m not breaking records here, nor am I doing anything revolutionary. But I’m making money. And the names I don’t sell are (generally) quality names. They will sell.
So while I sell 1-2 names per month and buy 5-6, I’m amassing a portfolio. I’m building up inventory so that I can eventually sit on a beach with a cocktail everyday.
That’s my strategy and what I’ve learned. It’s working for me. It might not work for you. And I’m certain it’s far from the best strategy out there.
But that’s my domaining business in a nutshell, for better and for worse.
How about you? What are your thoughts on these lessons? Do you have any additional strategies to share with the community here?
The post 10 Things I’ve Learned in Domaining After 2 Years appeared first on BrighterVision.com.