Buying Domain Names Is Not A Business Model

A new domain investor emailed me this week in a panic. He told me that he had been “investing” in domains for over a year now and was yet to make a dime. So I asked him the question that I ask any new investor, “What’s your business model?”

His answer was, “I am buying domains in a niche that I know very well.” My response was, “And how do you make money?”

This is where he got stuck, his grand plan in the domain world ended there. A business model is a plan for how your business makes money. Last time I checked, buying domains is how people spend money, not make money. Unless someone else is paying you to buy domains (which would be awesome BTW!) then buying domains is not your business model, it might be part of it, but if the buck stops there you’ll probably lose money, well, forever.

Here’s a business model most people start with, and most also fail with. Buy domains and sell them for a profit. Now that’s a business model except when you’re this vague you’re really not going deep enough to know if what you’re buying can really be sold for a profit. In fact, most new Domainers start by buying domains that are not assets but instead are liabilities.

This is where a repeatable business model is key. Rather than buying hundreds of domains hoping that one will sell for big bucks I tell new investors to start small and prove they can sell one or two domains before investing thousands of dollars. It can be easy to look at a list of previous domain sales and say, “I have domains like that in my portfolio!” However you have to realize that every domain is different and every domain sale is different. Until you have some sales under your belt you really don’t know if you’ve been buying real assets or not.

That is why I recommend that new investors reach-out to experts for help. Domaining.com is an incredible resource as are forums like DNForum, all of this information is free and if you take the time to learn more about the market and how other people have built their businesses, you’ll waste less money buying worthless domains. Remember, domains have been available to register since the 90’s, if you hand-register a domain that you are “amazed” is still available you should be more cautious than celebratory.

My point is simple. Buying domains is not a business model, in fact, unless you have a solid track record selling domains you’ll probably buy a lot of junk and spend a lot of money. Take the time to learn from others, don’t be afraid to ask questions, and yes, attending a conference like TRAFFIC is incredibly valuable and can dramatically accelerate your business. Think conferences are expensive? Spending thousands of dollars on garbage domains you drop a year later is expensive, conferences are incredibly valuable because at the end of the day you’ll learn the most from other people who are where you want to be now.

{ 6 comments… add one }

  • Igor Mironyuk August 9, 2013, 1:19 pm

    Great post! Thanks for publishing.

    Reply
  • Michael Rader August 10, 2013, 12:06 am

    Good article there Morgan. I couldn’t agree more. I’ve met many people who quickly jump into the domain industry after learning about what I do in my company. They don’t realize that the buying of domain names isn’t the same as selling them. I’ve learned that turning a domain is about making it an asset, not simply expecting it to be. It’s also like any other sales job. Anyway, thanks for a good read.

    Reply
  • Diana Goodwin August 10, 2013, 11:12 pm

    Have a business plan, and follow through with it. Also understand that, like with any business, especially a new one, you will have to devote LOTS of time to it. There may be a “4 Hour Work Week” sometime in your future, but not when you are first starting out and trying to build a business.

    Reply
  • Joe August 11, 2013, 10:21 am

    Thanks for your post.

    When you start also have errors like everyone, including me with my last offer or rather the first of my life.

    You write well what many of us need to do and do not buy too many domain names because if they do not sell them money so, no doubt.

    When you reach this market in part by asking you about the issue of the world of generic domain names and to be a domainer? your like always be direct in helping to start with and not knowing this market.

    Read again and again many domainers blog, Domaining, DNJournal, Domainsherpa, (In which be subscribed) experiences of others, the end to see one to write on his blog that the domain names. Com better the more you become old and real estate, search without asking via Google what that mean domainer and find the results very interesting.

    This economically is one of many that exist in this market and domain name industry. Com I will not give details of this and we all already know how it works but never see a post on this issue or if all generic domain names have to be registered as a trademark. It is interesting to know more about all this because they start as a small domainers, would like to know what you learned when you start finding many hurdles to jump and not fall into the same sort them with your push to achieve what we all want one day, one day find another domain investor or domainers and help to clarify your questions and unknowns and recommend that in order to make money from your domain .com name registrations to begin to sell after five days and make some good money, but to bring joy and hope, this professional domain investor teach you how to operate it and how to overcome this border to get a good or great domainers, CEO and Investment with a company like yours.

    Congratulations on what you have come to achieve and what you want to teach in your post.

    When you write you to learn more is due to go to conferences, it is true what you write. The Friday night search Youtube and find this:
    Domaining Power Course: Lesson # 1 – What is Domaining?

    Uploaded on 26/01/2009

    Professional Domain Investor Morgan Linton Teaches new domain investors or “Domainers” how to buy, sell, develop, and monetize Their domain names. Learn from some of our best investments and find-out how you can Become a Domainer Investor Whether you are a computer expert of complete novice.

    Now having known this three years ago, I think it would be much best of what I am today. I record and listen better each lesson, after a translation you know why?

    Thank you.

    Reply
  • Abdelhalim August 14, 2013, 11:25 am

    Hi. Really great article, it’s my tought too, you should have a business plan. I’m able to buy from 10 to 20 new domain names a day but i’m not good in reselling them…any advice?

    I’ll appreciate all your tips…thanks again

    Reply
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