Noobs Start HERE!

Most wannabe domainers will not succeed. I’m not saying that you personally won’t. But you need to learn why.

Countless people invest $50 – $100 in a few domains (the little money they have), thinking they’ll strike gold. Sometimes they do. But in 99.x % cases they won’t.

In the end they won’t have money to renew those domains, and they simply get dropped. Then another one will pick them up, and the whole cycle of feeding registrars starts over.

Here’s why the odds are so small.

If you have lurked a bit in places like NamePros, you’ll find out that the average sales rate is generally admitted at 1%…2% per year. I agree with this rate, (although mine is a bit higher for whatever reason). In fact you probably won’t reach 10+ %unless you actually build good sites; buy FEW domains, build them with a lot of traffic and that takes time, work and investment. Anyway I’m talking here about domain flipping, not website flipping to be specific.

Let’s say you spend 1K and registered say 111 domains at $9 each. During one year, you will flip… 1 or 2 of these. And then you will have to renew all of them. Renewals are pricey; they might cost double the registration. This means over 2 years, you will need to spend about 3K or so, and during that time you will have sold like 4 domains.

3K / 4 = $500. You will need to make $500 net on each domain sold just to break even. And on top of that you need to add marketplace fees (10-20%), VAT if you’re a registered EU business, losses with bad domains registered (yeah sometimes you will register stuff you can’t sell for whatever reason), losses with domains you are really fond of but nobody will ever buy them. Also Estibot fees (or similar), auction or closeouts fees, and $ for whatever else tools you use.

Which means, you need to sell domains at 1K or so just to make a little money. You’ll probably make like $300 per domain out of those 4 domains, that’s 1200 per year (net after all costs deducted), that’s $100 per domain per month. Hardly getting rich anytime soon, isn’t it?

I admit these are ballpark figures, not precise, not matching each situation, but they do carry the message and set you in the real zone.

Then comes another, big big problem: Useless domains.

Most of newcomers buy crappy domains and they think they’ve struck gold. Domains that are valued $0 and will always be $0, and you’ll see many of those posted in this sub. It’s okay and actually recommended to set a high price, so you can have margin for negotiations. But crap domains are a different thing.

Say your domain is worth $1000 at REAL market prices, you can set a $2999 price to have room to get to your 1k; but if you set the price at 20K this will spook your customer and you end up with nothing. But I’m talking more about domains like cryptogeorge .com which will never be worth the thousands these users think. Actually, not single dollar.

When I see such domains being sold in this sub (and on Facebook and everywhere else), I get that feeling of cold inside, and I feel really bad for them. The coldness of being poor. I’ve been there so I know exactly how that feels, and how by their own choices (and often lack of needed skills) they are likely condemned to remain poor forever.

This being said, if you still want to start, here’s my advice: Either spend time to find just a few domains worth 5k or more (will probably take months, and incredible luck just to get one that isn’t caught and auctioned already) OR start with AT LEAST 50-100K in cash just to get things rolling and doing the business of scale. Money is made with money, unfortunately.

While at the same time (cash is not enough): spending little at the beginning, so you dont’ burn your cash fast, and gradually tweak your hand, get better, create a system, build tools, learn how to do outbound sales, pick your niches, become a reputed member /seller in the forums of those niches, learn how to do PPC to sell more, and most importantly, what is the value of the domains you are registering and how to get that value in cash, actual sales. In one word, Experience.

Domaining is tough. It’s an investment, and probably not a business (though it can be built like that, but…. it’s complicated), and definitely not a get quick reach scheme. You have been warned.

Thanks for reading!

joejoejoey

Contributor

Well said. For every person who made a million bucks on domains, there are 1000 people who made a million playing the lottery.

Edit: the best way to make $1,000 domaining is to start with $20,000

emsai

Moderator

Edit: the best way to make $1,000 domaining is to start with $20,000

I agree. In fact, I think the 20K sum is about the bare minimum.

thunderway

Contributor

Some good advice here. Also, even if you can somehow avoid registering worthless domains, it could still be years before you receive a decent offer. The renewal fees add up, so be careful what you register and hold long term. Check namebio.com and dnjournal.com to see what sells. Stick with .com, no numbers or special characters, and shorter is usually better. Skip brandables unless they are 4 letters in .com. 5 and 6+ letter brandables are lottery tickets that usually do not pay out. You can still make money here, but if you want to be successful then be sure to take your time and learn before you invest thousands in worthless domain names.

uglydork

Contributor

I buy one good domain a year versus 10 shitty names. When I sell that name I buy another I spend from 5k -20k on one name and yo be honest – they are just ok names Good domains cost thousands

emsai

Moderator

1 : 10 is probably the average ratio for domainers. That one you hold tight on until the right customer arrives. The other 10… flip’em before they need renewal, then clearance, and if anything left, let them expire.

One way or another you always spend a lot to get that one – either at auctions, or sifting through piles of mixed less worthy ones + crap. I don’t think there is a single domainer who hasn’t bought bad domains as well. It gets better with time though.

Edit: or not.

MoneyMakingDude

Excellent post. The problem with newbies is that they are usually after a get rich quick scheme, as you can see by many posts on here where they register a crap domain and then try to sell it for $5,000 the next day. It’s a tough business for sure, but the main problem is that most people don’t want to put in any time to learn. Even if you give them all the resources they likely will ignore your advice.

For beginners I’d suggest the DN Academy course. I took it and learnt a lot. It’s very thorough. Also watch the videos on Domain Sherpa.

MoneyMakingDude

Another way to look at it is that if you have 100 domains names it will take 50-100 years to sell them based on 1-2% sold per year.

johnvrijck

so true!

aehageman

I remember when the starting price was $100 and then $50 and then $10 because that was the registration fee for the domain for the minimum period. While I have been siting on hundreds of domains for years and spending zero to no time working on selling, I still sell one or two a year for an average from $3 to $5k. With that said the best buyer has to find me. I learned years ago that reselling or flipping domains as my main income was very time consuming. I quickly became tired of people putting me and my prices down or just not understanding the value of a domain. Remember I started when you had to explain what a .com was and how you and money with it.

Think about your strategy. How are buyers going to find you? If you don’t know this answer, figure it out before you start buying domains. I sold domains for $1500 and included a 5 page informatiobal site and hosting for 12 months. Sold them faster than I could build them.

Harder now to mind a business without a website or domain. Now you have to find a startup. A startup with money. I found my customers by walking the street, walking in stores, visiting with store owners and sometimes buying things I did not need to demonstrate I had money. This strategy is a little out dated now, since everyone is now online.
I feel confident that should I need to start walking door to door again that I could start a successful business process after I learn what the current market is asking for.