Domain Investing is Not a Way to "Get Rich Quickly" | DomainInvesting.com

Domain Investing is Not a Way to “Get Rich Quickly”

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I hate to burst anyone’s bubble who thinks otherwise, but I don’t think there is any “get rich quick” strategy for domain investing, and also don’t think there are any fail proof ways to make money from domain names. There is significant risk in domain investing, and it is not unlike other types of investing (real estate, commodities, stocks…etc).

There are quite a few people who make a living with their domain investments. Many of these people make a very good living. I wouldn’t even venture a guess about how many people make their full time living investing in domain names.

One of the things that most of the people who make a living from domain investments have in common is that they have been in this business for many years. This longevity gives them considerable knowledge about operating a successful domain investment business. In my opinion, the most important aspects of managing a domain investment business are:

  • Knowing the resale market
  • Knowing how to stay informed of market changes and domain name ownership changes
  • Knowing how to get in touch with domain owners and prospective buyers
  • Knowing how to negotiate
  • Knowing when the time is right to sell a domain name
  • Knowing when the time is right to buy a domain name
  • Knowing where to buy domain names
  • Knowing who to ask questions of and knowing the right questions to ask
  • Knowing how to monetize domain names
  • Knowing how to mitigate legal risk

I don’t think there is any way to become an expert at all of these aspects of the business without actually being immersed in the business for a long time. It is easy to spend a lot of money buying domain names, but it is not nearly as easy to sell those domain names profitably.

Plenty of people made money by selling one domain name or a handful of domain names. However, one great domain name sale does not make a business. There have also been plenty of people with grandiose dreams of making silly amounts of money, and they have left with those dreams unrealized.

Like any other types of investing, there are people who have done well and there are people who have lost their investments.


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 (23)

    brand

    Great article, thanks for posting it.

    October 29th, 2015 at 2:49 pm

    @domains

    I disagree with your title, domain investing ‘can be’ a way to get rich quickly, depending on your definition of ‘rich’ and ‘quickly’. There are many examples of a domain being registered or bought cheaply, only to sell within a few months or a year for much more. CamRoulette.com for example (from reg fee to $1400 to $150,000 in weeks). Anyone who had hoarded LLLL.com a couple years ago would be making 10x to 100x on their investment today (or more). It isn’t easy and takes some experience and/or even luck, but can be done in domains, just like in stocks, art, commodities, etc.

    October 29th, 2015 at 4:13 pm

      Elliot Silver

      I suppose, but I don’t think someone living in the US (where I live) who made $150k on a single domain name deal would be considered “rich.” Of course that is a great ROI, but is is also fairly anomalous.

      In reply to @domains | October 29th, 2015 at 4:16 pm

    Domain Shane Cultra

    Maybe not rich quickly. But it presents as good of an OPPORTUNITY as any investment that I can find right now.

    And I have no idea what anomalous means. I’ll just pretend you said anonymous

    October 29th, 2015 at 4:38 pm

      Elliot Silver

      I know you do well with your business, and I presume you know I do ok, too.

      There are a lot of people who come in thinking they will buy some domain names, sell them for a lot of money, rinse and repeat. I would imagine many people who try the buy all sorts of crap to sell fast approach fail much in the same way I failed when I tried to make a ton of money trading penny stocks in college. Luckily, the domain name thing has worked out for me. I am sure there are plenty of people doing fine, but there are likely more people who aren’t. I presume you get the same emails from people asking you to buy their 200 newly registered domain names that aren’t worth anything.

      Anomalous = out of the ordinary.

      October 29th, 2015 at 4:41 pm

      Glenn

      “And I have no idea what anomalous means. I’ll just pretend you said anonymous”

      You always crack me up, Shane. Love your humor.

      In reply to Domain Shane Cultra | October 30th, 2015 at 12:04 am

    Leonard Britt

    Domaining is like sports – only a very small percentage of athletes do well and the vast majority of the rest spend enormous amounts of energy and financial resources to merely participate as recreational athletes.

    October 29th, 2015 at 6:08 pm

    Acro

    Ten reasons about managing domains? Meh. I thought it was easier e.g. register 88888888888888788888888888888.com and sell it for thousands.

    An anomaly is something out of the norm; a bump on the road. Along with anonymity, both words have a Greek root.

    October 29th, 2015 at 7:47 pm

    Eric Borgos

    I agree. There is a survivorship bias, in that you generally only hear about the high-priced sales and read blog postings from successful domainers, but don’t hear from all the people who did not make money. Much like with a real estate boom or a bull stock markets, domains went up and up and up for around 10 years (let’s say from 2000-2010) so lots of domainers made lots of money. And, even when prices were not increasing, there was little risk for domainers to buy domains cheap and resell them to end users, since demand was so strong.

    Now it is much more of a crap shoot. I could try to invest in or flip LLLL and numeric domains right now, but it would really just be a gamble. Some people are getting rich from that one segment of the market, but at this point it is no longer guaranteed, and all other areas of the market are risky also (like the new domain extensions). I am not trying to be negative about domaining; there is still money to be made, but like with many industries, it changes over time.

    October 29th, 2015 at 7:52 pm

    Vivian

    Great reminder–thank you! I started buying domains for my own business for branding and lead generation (which has worked well for me), and then found out this could be a business. Bought lots of awful domains that I’m still getting rid of, while I go about learning more.

    But, for “get rich quick” opportunities I buy lottery tickets.

    As an extreme newbie, seems to me domaining is lot like being a runner–you have to run, not just buy a set of expensive running shoes.

    Off topic–I’ve learned a lot from reading your site, so thank you!

    October 29th, 2015 at 9:59 pm

    Peter

    I have a big concern: what is the ADDED VALUE of a domainer? It is like calling dibs, and wait until someone really wants it. Domainers do not really add value, create a better world. Let me know what do you think!

    October 29th, 2015 at 11:35 pm

    Supratik Basu

    quick means how long…got offer on one of my domains of $10000 and was to up the offer for which was registered on 27th June,2015…..i am not an investor rather i am a domain lover and as they say you gonna do best what you love doing…..i got some CRAPPY domains too…

    October 30th, 2015 at 2:30 am

    Eric Borgos

    It does not really matter when a company registers a trademark. All that matters is the first use date. They may have started using it 10 years ago but are just applying for a trademark now. Even if they don’t apply for a trademark at all, they may still have the same trademark rights.

    Connectedcardevices.com and miniprivatejet.com are both good domains, but I don’t think they have any market value (like to other domainers). But, that does not mean you won’t be able to sell them for a high price to and end user.

    October 30th, 2015 at 8:50 am

      Supratik Basu

      yes i am looking for 5 yrs wait to get some price on those from end users…. common law trademark is when you use it often through marketing or promotions…..anyways it’s great to hear from super pros like you guys….respect

      In reply to Eric Borgos | October 30th, 2015 at 11:16 am

    Andrew Richard

    I don’t agree with you,in any business you will not get rich in a quick way,if you have the passion you will make it as big,Last year I have entered the domain market and after doing research and through my mistakes only I have learned where to capture a domain name for a very low price and to sell it for a higher price.Anybody who will not giveup will get the success.Thank you

    October 30th, 2015 at 9:41 am

      Elliot Silver

      I’ve been doing this for my full time profession for 8 years at the end of November, and I have seen many people come hoping to strike it rich and quietly disappear.

      Yes, there are people who do well and make a living, but it’s not as easy as some might make it out to be.

      In reply to Andrew Richard | October 30th, 2015 at 9:44 am

    SoFreeDomains

    This piece is ideal for new domainers, they must be fully on ground to make serious money in this business. Keep the good work coming in, Elliot.

    October 31st, 2015 at 3:03 am

    Larry

    Many of the people in this business who make money are also in a position to sit and wait until (what they think is) the right offer comes along. As such these people are really more gamblers than anything else. In other words they own a domain that most people would be happy to get, say, $200k for and they will hold out for $800k (these are arbitrary examples). If they don’t get the $800k (and actually pass up a valid offer of $200k) you will never hear about it. You only hear when they have won big for $800k. The problem with this in domains is a) the big offer may never come along and b) the base value of a domain, unlike a piece of real estate is not the offer that you passed up. The liquidation value is much lower than $200k since it’s what other domainers will pay for the name. And most will not pay “end user pricing” we all know that.

    What also interesting is that domainers are different than just ordinary rich people in this respect.

    For example a man who is worth $20 million who happens to own a few domain names can probably be convinced to sell that $200k domain for $200k. But the domainer who is worth $20 million and doesn’t need the $200k will many times hold out for a bigger number because he has been intermittently reinforced in the past with other domain sales. And because he is a gambler.

    October 31st, 2015 at 4:50 pm

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