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Intro to 10 Things – The Biggest Myth in Domaining

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The Biggest Myth in Domaning

You Can Make Money by “Buying” Domain Names

So I’ve fallen prey to this many times, so its time to get real. I’ve said it before, domaining can be a delusional business sometimes because you can buy a domain name, tell yourself you bought it at a discount to its true value, and go home that day booking mental profits, thinking you made money.  Walking tall, feeling good. Your Up!

But you make money buying and selling domain names, and hopefully selling for more than you paid to buy, both in the case of each name – and in total.  I’d ask you to please don’t forget in total.  When you drop names or stop renewing, are you counting that cost against your profits? You should.  Be real. You also need to make a certain amount to make up for bad purchases, renewals and time spent searching, and bidding on names you didnt win.  Lastly, Pay yourself. Don’t work for free, did you make enough money domaining to pay for new names and yourself?

Now if your just blowing money for fun. I understand. Like playing poker you dip in, buy some see if they sell and if not, hey it didn’t break me. And I had a chance. BUT, what if you could buy some better names, get a sale that multiplies your money, and you can go spend that on more fun, more stuff. Even buy more names with house money.

Anyone Can Buy More Domains

But the temptation when your starting out, and the offers aren’t coming in…..   is to Buy More. You need money, you’ve got to make some net worth in domains, and what do we do…. we buy. Your in domaining a month, a year, 7 years.. You wake up and say what have I done? Why do I own so many name, no one wants my names.  Or even worse, you run out of money, give up and let em all go.

So I will be doing a 10 part series on what to do, and how to do it.  But first lets cover what not to do.

If you thinking like I have and was, the easiest thing to do is buy more new names.  I said to myself I need new skin in the game.  So what to do when i need cash? The easy answer is buy more names.  We make lists and end up buying everything on the lists.  Your treating names like lottery tickets, maybe someone will email me tomorrow and buy my name.

Other domainers and folks like me on podcasts would say we don’t like your names, well you say I’ll show them.  Because your right, any name could sell today or tomorrow for $5000 to $5 million.  So your right, but are you Correct?  Are you correct in your assessment. Will it come to pass.

But buying is easier, so where to buy.  You look where you “can” buy, because no one else is.  So that could be good, nice names with no competition, yes do that. But if your the only one shopping and buying a trends, or marketplace; because the names aren’t worth it: you have no wholesale backup value, and it will take more time than you think for buyers to exhaust the supply of available names to the point where they will buy yours.

New names coming out, the IPO’s of new top level domains. So we, (yes me too) buy new tlds.  We buy the latest trendy cctlds. Or we go in big to buy drops, we buy premiums, we buy off newsletters,  BUY BUY BUY BUY…and then we “hope” we sell.    You pay-up when you buy if you think you NEED to have more names. Right at the moment you place another bid “above your self imposed limit”, you tell yourself “I’ll just to a quick outbound campaign”, and at least get my money back on this one. But do you?

NO. Then the thrill of the buy is gone. We tell ourselves we will do that selling work later.  Why? Because I need to buy something else tonite.  So here the facts, the only way to flip is to sell wholesale. Wholesale buyers want to pay 1-10% of retail. So you have to buy at 20-50% of that wholesale to flip to another investor.  And those same buyer at wholesale for your names had the same chance to buy the name.  Lastly, what works against you is the psychology of domainer to domainer sales. Unless the buyer just matches up name and price (smart) they think why is this other domainer selling. I don’t want him to profit. So then you price lower and you haven’t really “made” any money.

Its like we are in a grocery store. We act as if the grocery store will empty out, and we throw everything in the cart, check out and then see what we have. Why be selective, ive got to my cart full.   We say its ok if I make a couple mistakes, my big sales will make up for them.  Why be selective? Just get it all,its easier.

Or, you see a new trend, buy 40 names with that you thought up in 15 minutes. You tell yourself this will be your salvation.  Wait wait, are you sure?  Just buy the best one. Take a breath, walk around the office, block, coffeehouse. Come back, do you still love them?  If you gad bought them, and could return them would you? So try to not buy too many spec names when you think you need money.

But how to be a better smart buyer is for another series. Keep following us for that update soon.  I know your tempted, show me that now. But first lets look at what you do have. What you should do that cost no money.

They Told Me I Would Sell 1% a Year

So you hear you sell 1 % a year, so buy buy buy, You race to get up to 100 names. But nothing is selling..in your first week.  So you go to 500 or 1000 domains. Then 1% of that number is selling 10 a year.   But a year is 12 months, so to sell a name now, this month – you need to buy 1000 names.  You can easily start out in domain name investing and not have a sale until you buy 1000 names.

So you wanted to feel good and have a sale, you kept buying up until 1000 to see your first “Your name just sold” email.  You thought you could rest and stop compulsively buying.  But no, because now your looking $8000 a year in renewals next year. But when you were ramping up, were you being selective enough, or did you cave and buy buy buy.

Are you at this point starting out? Are you 2-3 years in and its just not working.  Stay with me here on dn.biz and let me show you what I have learned, the good and the bad from buying, selling and dropping over 50,000 names over the past 15 years.  Email me at page@dn.biz if there is something specific I can help you with in these posts, that also may help others.

 

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