Altering My Business is a Challenge | DomainInvesting.com
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Altering My Business is a Challenge

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When I tell people my company owns around 500 domain names, some people think this is a huge number and others are surprised my company owns so few domain names. Compared to other pros in the domain investment space, this is a relatively small number. This number is actually higher than it was a couple of years ago, as I began an attempt to alter my business by increasing the size of its domain portfolio. This hasn’t worked out as ideally as I thought.

After seeing several larger portfolios change hands during the last few years, I thought about growing the size of mine. The thought was that if I could turn my portfolio into one with 25,000 + domain names, I could sell it for tens of millions of dollars. I already had a good number of high value domain names (one worders and three letter .coms), and I could spend money earmarked for individual high value domain names to acquire tens of thousands of minimum bid expiring domain names at auction and hand registered domain names. That was a fleeting thought I had anyway.

This didn’t really work out for me though.

Buying thousands of domain names proved to be much more difficult than the model that has worked well for 10+ years. To alter my strategy, I would need to be somewhat less discriminating about the domain name I purchase. I would need to be more active in auctions and target far more domain names. I found that this was a major challenge as many names I thought I could buy for under $100 were selling for much more at auction. It was taking a great deal of time to find good values. At the rate I was going, bidding on auctions was not going to get me to 25k domain names very quickly and it would be very expensive.

Hand registering domain names that will have value to others is not an easy business. I would occasionally find pockets of names I liked, but the fact that there wasn’t going to be an immediate payoff was challenging. Perhaps I was buying good names that would sell in the future, but maybe I was buying junk that I convinced myself would sell in the future. Sure, they could be valuable to someone in the future, but I could also be throwing good money after bad money. I tip my hat at people who have the ability to consistently hand register and resell desirable domain names. Doing this repeatedly is not easy, and I have not had much luck.

One of my weaknesses is that I am impatient. I don’t love the idea of buying names knowing that I will be sitting on the vast majority for years (or forever) without selling them. That is part of the “numbers game.” Some people say that large portfolios have 5% or less turnover each year. For my business, I have been selling at a far higher percentage. I also like to buy names I know are worth something rather than speculating and hoping someone else will want to buy it. The numbers game doesn’t work for me, and it would be very difficult to grow my portfolio to the size it would take for a big portfolio sale.

Ultimately, I have decided to keep doing what has worked for me for 10+ years. I will continue to focus on buying higher value one and two word .com domain names along with the occasional 3 or 4 letter .com domain name. I will sell when fair offers are made and continue to grow my portfolio in strength not size. It was fun to see if I could grow my portfolio, but I have since realized that isn’t as enjoyable for me nor does it play to my strengths.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (11)

    Bill Kara

    High volume buyers, most of the ones you think of, use bots to buy based on a value to price delta.

    May 15th, 2017 at 12:34 pm

    Konstantinos Zournas

    From my experience growing a portfolio is not usually done with a decision.
    (that is if you don’t have a few millions around)
    It takes years and it usually happens naturally. You make sales, find some opportunities, constantly buying more than you are selling and you end up with a lot of domains.
    The number varies depending on the strategy, skills, etc.
    Going to 25,000 domains in 1 or 2 years is nearly impossible at this time. Again that is without spending millions while having no similar sales and also buying good domains at the same time and not garbage.

    It needs patience and not pushing it. If you try to push it you start to make mistakes and overpay.

    May 15th, 2017 at 12:34 pm

      Ryan

      As stated by many in the know above, you can’t build a quality portfolio without paying end user pricing even with aftermarket buys in today’s marketplace.

      Sure you can get the odd deal, but the industry is riddled with newbies seeking fast cash, and others who derive profits from domainer a, and effectively use their own money to outbid them at venues like namejet.

      Most buying at today’s prices are going to lose money, and that’s ok.

      In reply to Konstantinos Zournas | May 16th, 2017 at 4:24 am

    John

    Was worth a shot.

    May 15th, 2017 at 12:59 pm

    steve brady

    Heavy hitters with 25,000 domains must discover they already own a name all the time.

    May 15th, 2017 at 1:39 pm

    Edward Zeiden

    Very informative article, Elliot. Consciously growing a portfolio of that magnitude specifically in a short window is a bold move only made by an expert like yourself.

    If it were 6 years ago it may have been possible to build a portfolio with that velocity via auctions and hand-registering. I believe domain investing, and especially in this manner, has become much more prominent, and raised the re-sale value of these types of double or triple-generic and brandable domains. I can only imagine that building a portfolio of that size within a couple years would require a sizable fund, innovative tools, and a small full-time team to boot.

    Thank you for sharing your experience and insight with us!

    May 15th, 2017 at 2:00 pm

    Bill Sweetman

    Elliot, thanks for candidly sharing your journey with us. Recognizing what your strengths are (and are not) and then building a business around yourself that plays to your strengths is a very smart strategy. It’s easier said than done (requires introspection) but will usually lead to success. Congrats!

    May 15th, 2017 at 3:11 pm

    R P

    Good article. Typically only invested in certain niches to create some sort of method to the madness. About 8 years ago I tried expanding into lower quality domains in these genres, about 3,000.

    Over the years I slowly dropped. My original reasoning for buying/expansion was more long tail for future SEO purposes. After acquiring most of the highly searched two word keyword domains in aftermarket in subsequent years I realized I wouldn’t ever use the three and four word domains.

    I’ve become more of a believer in a smaller, high quality portfolio. At least for my investment needs as I rarely sell.

    May 15th, 2017 at 3:51 pm

      Dk

      I got into domains through SEO as well, was about 10 years ago. But i went more development route, and my first investment were mostly bad 🙂 . Then i got back in about 3 years ago into a nithch gtld, that still in progress but the going is slow. So in recent 6 month, i started building up some small portfolio on .com but quickly realized that it is one expensive journey. So i mostly bought in my nitch, mostly for development and a few for sale. Now mostly focusing on development.

      In reply to R P | May 15th, 2017 at 4:17 pm

    Hugh

    Elliot…thank you for sharing.

    May 15th, 2017 at 4:15 pm

    Mark Thorpe

    Domain auctions and drops for .com domains are so automated and overpriced now, that it is hard to find a good deal.
    I have had to go off the beaten path lately to find domain deals, like on Social Media, blogs and email.

    May 15th, 2017 at 11:05 pm

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