Why I Don’t Like Investing in Brandable Domain Names
It’s always fun to start of a blog post with a caveat, so here goes! Many people have made millions of dollars selling “brandable” domain names. There is nothing wrong with investing in brandable domain names. I personally don’t really invest in brandable domain names, and I will share some reasons for that.
To make money with a brandable domain name, you generally need the following things to happen:
- Buyer wants to create a brand that matches your domain name
- Buyer has funding (self or third party)
- Willingness to pay your asking price
- No other alternative domain names under consideration (other brand names, using a hack, or adding a word in front)
As you can see from the Afternic’s and Sedo’s weekly sales reports, there are plenty of brandable domain names that sell. There are even more that sell in private that aren’t reported. However, compared to the amount of domain names registered, the number of sales is a tiny drop in the bucket.
Some people treat domain names like lottery tickets, and that is fine. When you look at them in this manner, you most likely need to own more domain names in order to increase your chances of success. Unfortunately, owning more brandable domain names doesn’t necessarily mean you’re going to get more sales. It will, obviously, increase your holding costs, especially if it becomes difficult to give up and drop some unsold domain names since we all think the next big sale is just around the corner.
I read Morgan’s post about brandable domain names, and this certainly isn’t a knock on him or anyone else that sells this kind of domain name. I’ve sold many descriptive domain names in the last few years, and I am sure Morgan has sold his share of brandables as well. As I’ve said in the past, there are many ways to make money from domain investments, and I want to share some of my personal business philosophies.
Millions of dollars in domain sales are achieved each year from brandable domain names. Many times that figure is lost (paid to domain registrars), most likely to never be recovered.
Again, re-read the first paragraph. There are plenty of success stories, but there are many more failures that you probably don’t hear about because the owners either disappear from the domain investment space, or they hold out hope that the next big sale will be theirs. There are many ways to make money from domain investing.
I don’t invest in brandable domain names, and I wanted to give you my rationale. As always, your thoughts are welcome.