Develop or Sell?
Several years ago (2009 – 2010) when domain sales hit a low for me, I realized the importance of creating additional revenue streams. With the help of web developers, I launched a number of websites. Today, excluding my blog, the successful moneymaking websites my companies operate include DogWalker.com, DogPark.com, and to a degree, Lowell.com and DogGroomers.com.
With domain sales continuing to grow annually and my websites producing solid revenue numbers, I haven’t had any interest in building out additional websites. It takes too much time and money to launch a website that is actually helpful to users, and in order to be fair to advertisers, I feel obligated to produce something that is worthy of their advertising dollars if I am going to charge them. That means continued updates and tweaks, which take time, money, or a combination of both.
Within the last month or so, I bought MassachusettsRealEstate.com. My gut and comps say it is a $25-50k domain name to an end user buyer, perhaps more if someone is motivated. My experience tells me that selling a broad domain name like this using outbound channels will be difficult, so it’s probably a name I’d have more luck with if I hold it until a motivated buyer shows up. I did reach out to a few end user buyers I know from past deals, and one said he wouldn’t buy it but would advertise on it when I build it out.
That intrigued me because I think this domain name has the potential to be a local real estate directory covering the Massachusetts market. I thought about a plan involving creating individual city pages, and I could monetize those with Adsense. In addition, I could also sell each city page to one local Realtor, and I figure pricing between $99 – $499/year depending on the city would be fair. For instance, Boston might cost $499/year for the page while Lowell might cost $99/year. The advertiser could post his company’s information on the city page, which would help to add unique content.
I project that the site could easily earn anywhere from $5,000 – $10,000/year just by getting the low hanging fruit. I think this is a very realistic number, especially because the parked domain name sees hundreds of visits a month.
The question is whether I should spend the time and money building out the site knowing that I will then have to spend more time finding advertisers. I could theoretically build it, promote it, and see what happens, but I think that approach is bound to fail. I would have to give the effort to make it a success. Netting $10,000 for the effort is probably not worth the time and financial investment, but building a $10,000+ annual revenue stream that will continue to make money each year is probably worth it. It’s a gamble though because I don’t know if it will make $10,000 nor do I know if it will stick and continue to make money.
Alternatively, I could keep it parked and wait for a company to come across it and make a good effort to buy or lease it. In the meantime, it’s not making a huge ROI sitting there, although it’s earning much more than if it was cash in a bank or CD.
What would you do if you were me?
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