Newbies May Go Broke | DomainInvesting.com
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Newbies May Go Broke

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Every day, someone new learns about the business of domain investing. There are blogs, forums, ebooks, marketplaces, registrars, registries, brokers, consultants, advertisements, and many other sources that share information about domain investing. It is much easier to learn about buying a domain name today than in years past.

The lure of investing in domain names is strong. Some people see easy money with little management necessary, and they are immediately intrigued. They see how easy it can be to purchase a domain name, and before they know it, they’ve registered dozens. Oftentimes, these domain names don’t really have commercial value, but it’s so easy to buy a domain name and it makes sense to the person buying it.

Unfortunately, there is a high likelihood of failure. Buying domain names that aren’t worth anything to another party is a quick way to deplete a bank account. There is an endless supply of domain names to buy and register, and knowing what to buy is the most challenging aspect of the domain investing learning curve.

I’ve seen many people cite the new gTLD domain names as a reason that “newbie” domain investors will lose money and go broke. Every day, I see .com and .other domain sale listings and sale solicitation emails that have domain names I can’t imagine why someone even registered let alone trying to sell for more than registration fee. There is an almost limitless supply of .com and other domain names. There is a limited amount of domain names that have commercial value as is.

There is certainly the potential to make a nice living from domain investing, but there are also plenty of opportunities to fail. Like every other class of investment, research must be done before investing. No matter whether a newbie is buying .com, .net, .org or new gTLD domain names, there is a good chance of failing and going broke.


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 (17)

    Tony

    I’ve seen many a newbie bidder come and go on Snapnames. One particular one last about 6 months. From her whois contact I would assume she was an eBay employee of some sort. She consistently outbid at auctions and so I took note of her. I would estimate that she spent a good $80-100K and most likely more in the 6 months I saw her alias. I have not seen her alias since April 2013.

    March 11th, 2014 at 12:37 pm

    Ron

    Domaining is a lot of hard work, not having the proper systems, and contact pages in place, along with knowing buyer outcomes, it is not for the faint of heart. No easy money here, I spend a few hours a week, just responding to low ball offers. Many buyers refuse to give first offers, only to be lowball buyers. Researching them, responding, countering, and educating them, has costs. Most people do not factor in their time when seeing the big weekly sales. I am not selling some domains that have been in my portfolio for 10 years, that is a long haul, but it takes serious discipline.

    March 11th, 2014 at 12:46 pm

    DN Select

    Yes, I made that mistake when I first got into domaining just a couple of years ago. I spent over $1,000 on hand registering a bunch of domains that I thought were good. In the beginning, I really felt like I landed on a gold mine with all these valuable domains available for hand registration. And then shortly after, you find out that no one wants them. I let a majority of them drop, and sold a couple for profit, but for the most part I couldn’t even sell most of them for registration price.

    This was with .com and .net domains at relatively low prices.

    There’s no way I’m touching these new gtlds at these high registration prices. Too risky in imo. Plus, this market hasn’t proven itself yet. Sure, you’ll see one or two good sales here and there, but that happens with enough marketing and hype. We’ll see how things turn out.

    March 11th, 2014 at 12:53 pm

    Company Names Ideas

    Agreed. If you go in hard and fast then you might fall hard and fast. One thing I tell people is that if they are not internet savvy, don’t even think about getting into this as a venture. Also you may be buying excellent domains, but your $30k – $100k buyer might not come for a number of years. It is an exercise in marketing, salesmanship, and patience. However, and this is a big however, every domainer is a know-it-all. Everyone thinks their domains are the best and the portfolio of everyone else is abysmal. I’ve sold domains for $x,xxx that some professional domainers had appraised at $10. Any domain can be worth any amount at any given time. With that said, best of luck to you all!

    March 11th, 2014 at 1:06 pm

    Tim

    I escaped that fate as a domain noob, Elliot. Luckily, I was already broke when I got into domaining. :) I made a lot of mistakes but still managed to make a little profit. I was blessed to get some tips from the pros but, without significant startup capital, it’s impossible to buy premium names. My focus now is to broker other’s domains or develop sites until they generate revenue.

    March 11th, 2014 at 1:17 pm

    Kevin

    The easy days of making money from domains are over.

    March 11th, 2014 at 1:24 pm

      Ron

      Not true, if you bought into Bitcoin domains 2011 when the easy days were over that was the case as well, you could have closed 6 figure in sales, all at reg fee most likely. I have seen the Cloud domains slow a bit, other trends are always coming, and going, and your portfolio needs to be well rounded to reflect all these niches.

      It is true end users will have options with the gtld’s which are going to filter down to lessor extensions, and three keyword .com’s, and to some of the two keyword .com’s in the coming years. As of today, it is business as usual.

      In reply to Kevin | March 11th, 2014 at 1:48 pm

      Kevin

      Ron, how many domain investors sold “bitcoin” domains for 6 figures?

      There will always be lotto winners in this business. That will never change.

      I’ll say it again. The easy days are over.

      In reply to Ron | March 12th, 2014 at 1:48 am

      Ron

      I didn’t say 1 domain for 6 figures, a collective portfolio for 6 figures could have happend. The invention of bitcoin, actually helped sell a lot of COIN domains which were actually meant from a physical coin, back then coin domains were dirt cheap.

      In reply to Kevin | March 13th, 2014 at 12:42 am

    Hugh

    Nice post Elliot.

    March 11th, 2014 at 2:13 pm

    John

    I encountered what I believe was probably some nice old fashioned corruption shortly after I started, which was a few years or so before you. I was regging domains one day through what is now probably a little known or remembered discount reseller, but when I went to pay for the best one I found, my order was mysteriously blocked. The domain remained “in limbo” for several days, until it finally appeared with a registration date ***three days after*** my attempted order completion, with an extremely famous company player in the sales side of the industry. During these several days as well, there was no way to find or register the domain no matter how hard you looked or tried. It still exists, and last I checked they still have it for sale. I also still have all the proof. This was well over ten years ago now. A long time later while I was making pre-reg’s for a new TLD release, I discovered that someone with the company I was doing that with was actually silently watching me make my orders in real time, which he actually told me, so that was when I also realized that such a thing was not only possible but would certainly lend itself to the possibility of someone actually blocking completion of an order in real time if they wanted to. When this incident had happened, it really seemed like something like that, even though at the time I was not even aware of how actually possible that could be online. If anything like that happened now I would probably sue every party involved if I felt the domain was valuable, though nothing exactly like that ever happened again.

    March 11th, 2014 at 8:02 pm

    ashleigh

    Can money be made still yes or people wouldn’t get into this, I have only been around 3 months it takes a lot of learning, mistakes and quite a few crap domains and a business brain to think what others want to buy before you even click the buy button for the domains itself.

    Up to now I have spent about £1000 to some on quite a few domains most hand reg that isn’t much but i am young and disabled and often housebound so i need to make this work. I can see where people can spend a lot and blow it in months in the hope of being a millionaire in less than a year but for 1% they will get lucky the rest will fall by the wayside and i no the risks and the reality of the business iam still learning, what will happen time will tell but i have already getting good offers on some of what i have bought, none i have accepted yet as just not good enough to let go but i no that ppc will not last forever and building out and combination of selling domains is the way forward.

    March 11th, 2014 at 8:04 pm

      John

      LOL, I just checked. It’s still just parked and for sale with the same extremely famous company all these years later, still has that same old three day “late” reg date.

      In reply to ashleigh | March 11th, 2014 at 8:08 pm

      ashleigh

      Guessing it’s SOLDOUTDOMAINS.COM your referring you i only bought this a few months ago?

      In reply to John | March 12th, 2014 at 10:51 am

      John

      Ashleigh, my last post there was meant to go under my other one from 8:02 pm just above yours, but it got put under yours instead. It seems possible you and I were typing at the same time I guess. So what I just mentioned at 8:08 pm there relates to a new .com reg from over ten years ago now, more detail in my big post from 8:02pm.

      In reply to ashleigh | March 12th, 2014 at 7:18 pm

    Ken

    Elliot you are right when you say that it is not only the new TLD.s that new domainers can lose money buying. I am sure that most domainers have brought or registered domain names when they were first starting out that they look back on now and think why I did I think that was a good domain name to register. I know that I have owned a few like that.

    March 12th, 2014 at 4:57 am

      John

      I was even paying full price when I started doing that, not knowing about discount places, really ridiculously high prices per domain.

      In reply to Ken | March 12th, 2014 at 10:45 am

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