How most people get started in the domain investing world

Last week I got an email from a new domain investor. He had started out the same way most of us do – hand-registering a bunch of domain names and assuming they’re all worth thousands or tens of thousands of dollars.

A year has passed and not a single one has sold. What happened here?

In following-up with this new investor I let them know, “you’re not alone, this is how most people start.” Then I moved onto the painful part – “that being said, you’re probably going to want to drop all of these and start fresh.”

Of course there are plenty of ways to try to move a list of random, hand-registered domains, but in practice I’ve found this is rarely worth the time. It’s healthier for you, your bank account, and your domain “investments” if you’re realistic about the fact that you just bought a bunch of junk.

At this stage there are two moves you can make:

  1. Ignore the facts and just “assume” that you’re a genius and all the domains you thought of, that nobody else ever registered after all these years, are incredibly valuable. In which case you move is to hang onto these domains, keep renewing them, and insist that some day they’ll sell and it’s worth the holding cost.
  2. Drop your portfolio and start fresh.

I recommend option #2. There’s always a pretty easy formula you can follow to re-start the right way. Add up the total cost of all your renewals, in the case of this person, that number was around $700.

Take that money and put it into a handful of expired domain names. While you won’t be building your portfolio at a cost of $10/domain, you now have a much better chance of building a portfolio with some domains that actually turn out to be pretty good investments.

In the case of someone like this with $700, I recommended they buy two or three domains, all two-word .COMs. A two-word .COM that you buy for $200 very well could be worth $2,000, or even $3,000 or more. Don’t get too excited, you’re probably not going to sell it for $10,000 – sure it could happen, but it’s very unlikely.

When you’re starting out, shoot for a 3x – 5x ROI to get a few sales under your belt. The lower the price, the bigger the market of available buyers is. So it will be a lot easier to sell that domain you just bought for $200 for $600 that it will be for $2,000. Make sense?

As for how to continue to build and grow your business, there are a lot of resources to help you out with that. Two that I highly recommend are DNAcademy and DomainSherpa, if you start to plug-into both of those, moving forward I think you’ll find yourself going in a much better direction.

There are so many other people out there like this blog reader of mine. You’re all in the same boat, and it’s a boat most of us have been in as well. The question is, can you be honest with yourself and have the cut your losses and start fresh?

{ 6 comments… add one }

  • Anthony June 8, 2019, 6:40 pm

    Morgan, great article, as expected.

    It is so painful to have people send me a list of domains to broker and have to tell them they are all worthless. To your point, they want to assume that I am simply “not seeing it.” I always remind them, “here is how you know a domain has value… people will actually reach out to you to try and buy it from you.” And in fact, that is exactly how I made my first 4 figure sale from a hand registered domain. I wasn’t even looking to sell it and a GoDaddy broker reached out to me, with a low ball offer of $250. I told him it wasn’t for sale and if I did sell it, I would likely want about $5k since I had plans to build it out. His client came back and $500 and I assured him, I was set in not selling. Funny how money changes that… he came back and said their final offer was $2,250. Now considering I had hand registered this domain a few months prior for under $10, I realized I would be foolish to not sell it. I actually went and hand registered 3 similar domains for my alleged project and then sold it. Incidentally, a few years later the same company bought one of the other 3 domains from me (via GoDaddy premium) for $999. And no, I never launched the project due to changes in the industry it was in.

    Best regards, Anthony

    Reply
  • bdsmStore.com June 9, 2019, 12:18 am

    as soon as you place a bid on expired domains and think you are going to win the auction…
    5 seconds left, 4 seconds, 3 seconds,
    palms getting sweaty feeling excited,
    2 seconds, 1 second,
    here comes HugeDomains bidding it up

    Reply
  • M Naeem June 9, 2019, 1:42 pm

    I have a domain struggling to sell it since more than two years. It is a premuim name related to media and TV industry. Especially in Indian sub continent and the Gulf states. I have kept this domain now more than 19 years. Used flippa.com services but in-vain. Any one can help me. I am willing to share earning out of it. Its Pehla.tv
    THANKS
    Naeem

    Reply
  • Salihu June 9, 2019, 3:10 pm

    I’d go for the 1st option. Maybe for 3 or 4 years, I’d continue to renew it. I believe that every asset has a value and someday, it will reach that value.
    But being stubburn is not a good thing. We should know when to accept the loss.

    Reply
  • Portalnix June 10, 2019, 10:39 am

    Is it any chance that I invest in some domain after renewing every year It give me some profit?without finding some valuable domain

    Reply
  • Bipin Kumar Choudhary September 13, 2019, 3:01 am

    Very Good article.Good one

    Reply

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