Domains aren’t exactly like lottery tickets, but be sure not to get sucked in by false hopes.
John buys a lot of lottery tickets. He’s a prolific lottery ticket buyer, snapping up thousands of lottery tickets every week.
He then brags about his winnings.
“Just won $50,000 on a $1 lottery ticket. I am the master!” he tweets.
“Another score! $10,000 on a lottery ticket I just bought yesterday!”
John doesn’t talk about the majority of the time when he loses. In fact, most of his lottery tickets are losers. Most of the time when he wins, it’s only a few dollars.
Other people see John’s social media and think, “I should buy lottery tickets, too!” They don’t realize that John is actually cashflow negative on his lottery purchases.
OK, so investing in domains is not precisely like buying lottery tickets. With skill and data, you can buy domains that are more likely to sell than others. You can also increase the odds that a domain will sell with optimization and marketing.
But…many people are attracted to domain investing because they hear about quick flips and huge returns on investment. The reality is that most domains aren’t flipped quickly, and many people who do have big successes to brag about still only sell a small fraction of their domain portfolio. Some are cashflow negative despite their big wins.
So I share this analogy as a caution. Don’t get sucked into the idea that domain investing is easy. Or that you’ll make insane profits. Or that the people who are bragging about making insane profits are swimming in cash.
Mike says
I am beginning to realise that domaining is best done as an “add on” to a main line of work rather than being the main one.
Renata says
You have more chances of selling a domain with a website design package than one without. By building a site, SEO optimising it and offering a product or service you have already increased the value of the domain name. One needs to show a potential buyer what your domain has to offer to make it sellable.
JohnH says
It’s such B.S. to post sales info out of context of entire portfolio costs NOT TO MENTION TIME INVESTED. Especially when sharing or promoting such sales information directly benefits you (not you Andrew) the blogger-domainer, or you the new-sales-platform-domainer, or domain-information-course-domainer who actually earn their day to day living off the backs of neophytes who will definitely fail, at least for months or years to come.
snoopy1267 says
I’ve heard lots of stuff recently about how someone “should be able to sell xxxx.com domain in the next couple of years for 5x”. Viewpoints like that are completely unrealistic and people have their odds wrong.
The average portfolio of high quality names turns over less than 1% a year. That is over 100 years to sell a name. Need to factor in that most names won’t actually sell.
JZ says
yeah, everyone is impressed when I tell them I sold a domain I paid 10 bucks for initially for 40k or something similar but I don’t think it computes even when I tell them I spend 500 bucks a day or more just renewing domains that in the end its not that impressive.