My company motto is – “Stop Collecting. Start Investing!” and for a good reason! When I first started-out in the Domaining industry back in 2007 I realized quickly that I was buying domains that were great collectors items – domains that someday I might develop – but made terrible investments. I quickly learned that the art of knowing which domains to keep and which to drop was an essential part of ensuring you are creating an investment portfolio rather than a collection of domains!
So why do so many Domainers become Collectors?
I have found a lot of times this comes down to a lack of understanding what domains can generate revenue either through sales or monetization. Every week I am sent thousands of domains for my brokerage service so I get a good view into what domains people consider to be investments. Now I’m not saying that there is a strict formula you can use to determine if your domain is valuable…but there are some great ways to determine if your domain makes a good investment.
The problem is – most new Domainers get to a post like this after they’ve already gone-out and registered a few hundred domains that they are certain will make them a millionaire. I hear from many people who read my blog and are ready to throw in the towel! They usually say something along the lines of, “there is no way to make money in this industry. I spent a few thousand dollars on domains and I haven’t made a penny!”
Here is a major issue. When someone gets started in Domaining they oftentimes think that whatever money they put-in they will get back ten-fold. While this happens every day…it takes making wise investments to generate solid returns. The same is true in the stock market and the real estate market…but with Domaining people expect instantaneous results.
So how do you know if you’re an Investor or a Collector?
This is very easy to determine! Take all of the domains you own and calculate-out your yearly registration fees. Now look at how much revenue your domains produce. Now are you making money or losing money?
If you are losing money then at the moment you are just collecting domains. You might have some domains that make a good investment but overall you are collecting. If you are making money then you are investing as an investment is something that pays you!
Now you probably want to know – how can you become a Domain Investor?
To invest in domains you need to start making some money. Domainers make money in two ways – selling domain names, developing and monetizing domains. It doesn’t matter which strategy you pick – the idea is still the same – build a profitable business!
If you are going to be selling domains you need to understand the basics of domain value. You can use a service like Valuate to get a rough estimate of your domain’s value. You’ll want to also use a tool like the Google Adwords Keyword Tool to determine how many exact month searches there are for your keywords as well as the CPC your keywords command.
If you are going to be developing and monetizing domains then you need to understand how PPC and Affiliate advertising programs work as well as some SEO basics so you can build-up organic traffic. Having domain names with keywords that exactly match popular search queries could mean some nice consistent traffic and revenue.
This post really could be turned-into an entire book as there is a LOT to cover within this topic. That being said – the concept is simple – are you a Domain Collector or a Domain Investor? Ask yourself this question and if you are just collecting – don’t panic – just get proactive and start investing!