The old saying applies to domain names as well.
There’s an interesting thread developing at DNForum right now about “Fixed Income Domains” that were offered in the Big Ticket Domains email newsletter.
Big Ticket Domains is a domain brokerage with a frequent newsletter run by Kevin Leto. In December 2009 the newsletter started touting a new option — “Fixed Income Domains”.
The idea was that you would buy a domain name for a fixed price and then Kevin would then pay you that much income back over a certain period of time. Big Ticket Domains would develop a site on the domains and generate ad income for itself, then you could keep the site running with the ads afterward.
Curious, I plunked down $750 for GolfingVideos.net. Kevin was to pay me $50 a month for 15 months, totaling $750.
Now this domain name really isn’t worth much money. But I was curious to see what the hook was. From a business perspective it would be a 0% return plus a domain name after 15 months. For Kevin he would basically pocket the money he earned from advertising over those 15 months. It seemed a little suspicious, but I figured I’d see what it was all about.
But then alarm bells went off in February 2010 when Kevin started offering domains for $1,000 that would pay back $1,300 in 13 months.
That’s a 30% return in just over a year.
Then in August the newsletter offered a $1,500 domain that would pay $2,400 in just 12 months.
That’s 60% in one year.
0% a year is intriguing. But 30% or 60% in a year is a problem when the typical guaranteed investment is paying around 1%. Why would someone offer a 60% return? If they could actually make that much money with the domain in one year then they’d develop it themselves and keep the 60% profit.
It was then that I received an email from someone who noticed I’d bought one of the Fixed Income Domains. He said he hadn’t received all of his promised payments yet. Over time this person just passed it off as a bad call and moved on.
I talked to Kevin this afternoon and he says few people bought the fixed income domains. He says 10 people are owed money from the program.
When you see something that seems too good to be true, it probably is.
You’ve heard it a million times. And it’s true.