I have a lot of conversations with new Domainers – people who read my blog, are inspired by Domaining, and are trying to figure-out where to start. The first question they usually ask me is “what’s the best way to make money with domains,” to which I usually answer, “it depends on what interests you most – you can buy and sell domains, or develop and monetize domains.” Back when I started Domaining back in 2007 I felt like the only guy out there developing and monetizing domains – now as parking revenues have declined more and more Domainers are heading down the development road.
This is a topic that has also come-up at the Southern California Domainer Group that Jason and myself run here in LA. We have a number of Domainers in our group who have been interested in getting-into development, or vice-versa, developers that are just getting-started with Domaining and want to learn how people are making money buying and selling.
My point here is simple – there are two different kinds of Domainers and BOTH are great ways to make money with Domains – it just depends which strategy is the most compelling to you! As you all know I’m big on analogies and I’ve come-up with an couple analogies that I think are perfect for this example!
Someone who buys and sells domains is like a Day Trader – their income is based on their ability to buy low and sell high. Their income is very active and they typically have to be working in order to make money. When a Day Trader goes on vacation they usually aren’t Day Trading so they they aren’t making money – this is an example of active income – as you work you make money (if you know what you’re doing).
Someone who develops and monetizes domains is like a Real Estate Investor – their income is based on their ability to find properties that will generate passive income. Their income is very passive and they don’t have to be working to make money. When a real estate investor goes on vacation all the properties they own continue to pay them the same monthly income – this is an example of passive income.
Now for me, I’m been obsessed with passive income – that’s what brought me into this industry and that’s what’s kept it exciting for me. I love the fact that I can buy a domain for $100 or $1000 dollars and turning it into something that generates consistent monthly income for my business. One of my favorite stories to tell is from back in August of 2008 when I went on vacation traveling around the world for an entire month – came-home and found out that I had my best month of revenue that year – and I didn’t work a day that month!
That being said I do still love sales and enjoy contacting end-users and ccTLD investors through my ccTLD Brokerage email. However my business wouldn’t be here if it was based on domain sales since I can’t say there’s much consistency in my domains sales. Sometimes I spend 10-15 hours promoting a domain and it never sells, other times its my first few emails that finds a buyer.
I love the idea that if I go on vacation today – my business continues to make the same revenue. According to my good buddy Robert Kiyosaki this is the difference between being self-employed and being a business owner. A business owner can leave the business for a week, a month, or a year and come-back to a still successful (hopefully even more so) business. Someone who is self-employed needs to consistently work if they want to make money. I read Kiyosaki’s book – The Cashflow Quandrant – and ever since then I’ve been hooked on passive income. Since I like this book so much I’ve included a link to it on Amazon below – if you haven’t read it yet – you should!
So now it’s time to ask yourself – what kind of Domainer are you?