How I Became a Domain Investor | DomainInvesting.com
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How I Became a Domain Investor

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I feel like I’ve probably told the story a bunch of times (which I am sure I have), but since a number of people have asked me recently, I want to share the story of how I became a domain investor.

When I was a NYU in 2002-03, I went to help a family friend clean the movie ride curtains at the Empire State Building since I lived less than a block away. For two days, we talked about how expensive the City was – especially for a grad student. My Dad’s friend recommended that I find some sort of product to sell and that I should sell it easily on Ebay. I looked around for a number of things – custom pencils (no margin), art (did some buying and selling) and finally I saw people selling domain names.

I would see names selling for a few hundred dollars, and when I went to Network Solutions, I saw that similar names were available for just $35.00. I bought my first name, and for the life of me I can’t remember what it was. I think it was a legal name with a hyphen. I remember I sold it after two auctions and broke even. Shortly thereafter, I learned about Godaddy’s less expensive registrations, and I began buying and selling newly registered domain names for 200-300%+ profit. It wasn’t a whole lot of money, but I continued to do it and reinvest all of my profits.

As the number of my customers grew, I began selling domain names in private and in bulk. Instead of selling 1 name for $30, I would sell 20 of them for $18/each. My profit margins were smaller, but my profits grew. With all of this, I continued to reinvest in my business, buying more newly registered domain names. I went to work at a Direct Marketing Agency in 2003 and continued to buy and sell domain names on the side, although there were times when I stopped doing it to focus on other things.

I later began to realize the value of keyword domain names, which was taught to me by Tasha Kidd, who also told me about domain parking. I had been looking at domain names as virtual pieces of land, but hadn’t really even considered monetization. Prior to this, I had focused primarily on “brandable” domain names, with some of my new registrations including BusinessMotels.com, GasolineExperts.com, and many more.

Sometime in early 2006, one of my clients recommended that I join DNForum. Up until that time I didn’t even realize there was an actual domain industry. Ironically, he told me that once I joined the forum, I probably wouldn’t sell him any more domain names cheaply. For some time, I continued to buy newly registered domain names, while selling them as quickly as possible… churning and burning through them.

It was on DNForum that I got my first big break. I saw a listing for the domain names Mortgaged.net, Mortgaged.org, Mortgaged.info, and Mortgaged.biz, and I bought it for what I believe is a few hundred dollars. I then did some research and found that Mortgaged.com was for sale for 4 figures from someone else, and I bought it – the purchase was my highest priced domain acquisition, and for the couple of days around then, I was nervous as hell. I hadn’t paid more than a few hundred dollars for a domain name ever. With some good luck, I was then able to flip the entire package for a profit, earning me more than I had made on any single deal before.

I continued to reinvest all of my profits as I started a new job as a Marketing Manager at AIG. I worked all day and came home to do more work in the evening – looking to make deals the entire time. One day in September of 2006, I bought TelephoneCall.com for $x,xxx, and a few weeks later, I flipped it for $20,000 at the TRAFFIC auction. I used the proceeds from that investment to acquire other domain names of higher value, and I continued to buy and sell – keeping taxes in mind (which is VERY important).

In October of 2007, I was able to leave my full time job at AIG and focus on growing my domain business. I literally started with a $35 domain investment in 2003, had zero technical or Internet background, and I have become a full time domain investor and developer. Fortunately, I learned about development, because I am able to do things I never thought I could do – such as changes to the blog, website development edits, and other very small coding projects.

While I do think times are arguably tougher than they’ve been anytime since the .com bubble, I still think there’s plenty of opportunity. I continue to earn a living buying great names at great prices and selling them at fair prices. I generate (growing) revenue from my developed websites, but I still primarily earn a living as a domain investor.

One of the reasons I happily blog every day is that over the last few years I’ve been lucky enough to receive advice from a wide range of domain investors, developers, designers, SEOs, venture capitalists, advertising executives…etc, and I am passionate about giving back. If it wasn’t for the advice of others, I wouldn’t be in the position I am in today, and I hope I can be helpful to those who can use it.

Just because you don’t have a huge bankroll and just because you didn’t start in 1996 is not a good reason for why you can’t be a successful domain investor today.


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 (16)

    Shane

    Since I’m new to the blogging side it’s the first tome I’ve heard it. It’s a fantastic story and proves yet again you didn’t have to start in 1998 to make a living doing this

    November 19th, 2009 at 1:05 pm

    Elliot

    @ Shane

    Thanks :)

    The three main points to my story are:

    1) You didn’t need to buy domain names in 199x-2001 to be successful

    2) If you don’t have a big bankroll, you can still be successful

    3) Just because you can’t afford to buy the premium .com names now doesn’t mean you necessarily need to invest in other more risky extensions.

    November 19th, 2009 at 1:08 pm

    Domain Report

    Nice post, I always love to hear how people started out. I bought my first domain in January 2000 (coming up on my 10 year anniversary as a domain investor). Though I had a bit of luck early on, the .com crash of late 2000 to 2003 kept me in domaining only sporadically, and I never learned about ppc, monetizing, type in traffic until later. I got back into domaining in a more serious way in 2005, and now just love it, though it’s still a part-time endeavor for me. I haven’t had the smarts or luck to flip small buys into big sales on a regular basis, but I think the domain market is still young and has a good future.

    November 19th, 2009 at 1:15 pm

    Leonard Britt

    You raise a valid point that not all sales have to be four-figures to turn domaining into a profitable venture.

    November 19th, 2009 at 1:45 pm

    Elliot

    @ Leonard

    I think the key is to build up to larger sales. You’d have to sell a hell of a lot of inexpensive names to make a living, and there may not be enough hours in the day or enough buyers around to do that.

    November 19th, 2009 at 1:50 pm

    Tasha Kidd

    Nice post, Elliot, and thanks for the shout out! I’m so glad for your success.

    Anybody could start in the business today, and become profitable, if they know what they were doing. Yesterday, I found IraEligibility.com, for example. wasn’t registered. Since it gets 480 exact searches a month according to Google, and pays over $10 CPC, it’s a decent name. It’s funny, because I’ve owned RothIraEligibility.com since 2007. It gets 1600 a month, at nearly $11 a click. But there sat IraEligibility.com all that time, untapped. The point is, there are still some gems lying around out there which you can find with a lot of trial and error. Just think how a customer thinks. I may be an old dog, but the greatest fun in the world is learning new tricks, and digging up new bones.

    Another untapped area is long tail domains. Domain investors for years have scoffed at long tail domains. Just in the last year, it seems to have gained some traction with some, though. Again, it gets back to how does your customer naturally think when they’re looking for something. I remember opening HowToLoseBellyFat.com for offers at one time, and was just scoffed at. I’m glad I didn’t sell it, and plan to develop it. It gets over 40,000 exact searches a month, surprisingly well above some shorter domains in the lucrative weight loss, diet pill, etc. sector.

    Anybody just starting off, has a world of potential ahead of them. And the rest of us have to keep learning, and adjusting, and enjoying the journey.

    November 19th, 2009 at 3:17 pm

    Harris

    A bit of a sidenote…..I checked the top 20 domain sales for the week of your sale of TelephoneCall.com…..I randomly went through almost all of them…not one looks like they we ever developed. I would be curious to know what percent of all “top 20″ sales actually ever do get developed.

    November 19th, 2009 at 3:17 pm

    don

    Elliot, great story…I too missed the domainparking boat, but look forward to the development route…your approach reminds me of a blue collar sucess story of going to work everyday

    November 19th, 2009 at 3:48 pm

    Jim Holleran

    Elliot,

    What is great is how you build up your business. Very smart, limit your risks, re-invested, and did not put all your eggs in one basic. I have learned great things from you, and what is great is how you are not afraid to tell everybody your journey. Most people won’t and keep things to themselves.

    I started in 1998, but did not know what I was doing. Out of the first 200 names I registered 90% were crap. What took me to the next level was buying spanish .com in 1999/2000 and that is the reason I done well and not have to work a regular job.

    People ask me if they were getting into the domain name today what should they do, I tell them go after the spanish market. That is where the growth worldwide and in the US is. I am lucky, my wife is who is mexican and speaks spanish is my translator. For those of you who don’t have one, find a spanish speaking wife, girlfriend, mistress :)) It will pay off:)

    Thanks, Jim

    November 22nd, 2009 at 1:10 pm

    Poor Uncle

    That’s a nice story, Elliot. I only started reading your blog and know of domain investing/flipping last year. Have I read this post last year, I’d have accepted an offer for my domain name Text2God.com for $500. :) Instead, I am going to sell it for $25k one day.

    May 2nd, 2011 at 3:49 pm

    Poor Uncle

    Ops…Text2God.Org rather…shows you the power of .com in my Subconscious.

    May 2nd, 2011 at 3:52 pm

    RAYY

    Elliot, your blog is always inspiring to me. I am new in this investing/flipping business. I have been buying and collecting the domain names for years while having my full time job in architecture, but hardly try to make an effort to flip it or sell it, simply because I didn’t have time and skill to do while working full time. The last time I sold my domain (hand reg $8) was $1000 to an end user. Not bad for a new starter.

    I am basically a domain name collector, and speculator…I like risky side, speculate new trends…and branding new words…all architects are like that…dream of new words, look for new trends…

    But now, I start to look into realistic side, more seriously since last 4 months. I read lots of domain blogs and trying to learn from you all and absorb domain business knowledge. I learn to know that I bought many crappy names, but I am looking forward to avoid those mistakes.

    Elliot, I get to learn by reading your blogs , very informative and I thank you for your sharing. I still learn by try and error method, hopefully strike a right path…Cheers.

    May 2nd, 2011 at 8:54 pm

    MarsDavis

    Elliot, I enjoy hearing your experiences about domaining. It gives me ideas that I can use in my own world. I have collected many DNs and look forward to flipping some and developing others. Cheers, Mars

    May 3rd, 2011 at 1:13 pm

    Madj

    hi Elliot! Really a good story and you succeed at the the end.
    I have entered this market of domaining a year ago and had some bad news. I was excited when I discovered this business so I went to 1and1 and Godaddy and bought more than 250 domains. More than 100 were a .info for iPad (before its launching) and others are from my keywaord researches. A year later (now), I have sold 2 domains only! So, I decided to not renew about 150 domains. Now, I have near 100 great domains for sale and it’s not easy to get bids and offers. My domains are great valuable (lasvegasshoe.com, wheelseller.com, coursemeal.com, highdoors.com, partypreparation.com, losangelproperties.com, realestatecreator.com etc…).
    Can you help me selling them?
    My fanpage is: http://www.facebook.com/pages/Cheap-Domains-For-Sale/149545778417941

    I hope receiving some techniques to apply.

    Thank you very much and good business!

    Madj

    May 3rd, 2011 at 3:17 pm

      Elliot Silver

      @ Madj,

      Thanks… unfortunately, I am not a domain broker and would not be able to help you sell them.

      May 3rd, 2011 at 3:18 pm

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