One question I see come up over and over again in the domain name world is how to calculate how much money you’ll actually make selling domain names. Most new investors read about blockbuster sales and assume they’ll be bringing in six-figures in no time. Usually a year or two in, domain investors realize that this is actually a very hard industry to make money in.
As I’ve said many times before, if you’re looking for a way to get rich quick stay far far away from domains. That being said, domain names have changed many lives, mine being one of them, but it took a lot of time to learn how to set realistic expectations.
While some years you’ll end up selling a domain or two for a lot more than you thought you would, I always recommend new investors be realistic and run a simple calculation to give them a baseline expectation of how much money they’ll actually generate from their domain portfolio.
The calculation I’m going to share assumes a few things:
- You’re not doing any outbound
- You don’t have a portfolio full of junk
- A majority of the domain in your portfolio are .COM
If you can’t check all three of these boxes, hit the back button because the math I’m about to share isn’t going to apply to you. If you do outbound, this will be an underestimate, if you have junk domains or lots of non .COMs this could be an overestimate.
Last but not least – there is no magic formula to truly calculate how much money your portfolio will generate so take this with a grain of salt. Okay, still with me? Here we go.
Calculating domain portfolio revenue expectations in 2021
- Take the number of domains in your portfolio and multiply that number by 0.01, this will give you the total number of domains you might sell this year and could overestimate a bit. For example, if you have 500 domains, you can hope to sell 5 domains this year if you’re lucky.
- Multiple this by the average price you have seen your domain names sell for. For most people this will be something in the $1,500 – $4,500 range.
That’s it! Not happy with the number? Start doing outbound, buy more domains, do some domain brokerage on the side, there are lots of other ways to generate revenue. Hopefully this gives you a bit of a sobering but realistic view of what you’ll make this year.
Disclaimer: The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
