How I made 6 figures in Domaining, with examples

[DomainMagnate]

Hey all,

I've been a member here for a while and it's a great community, so I figured it's time I share something interesting

As my username suggests I trade domains, I used to do much more of that in earlier years, now I mainly focus on sites. in 2008 alone I had 6 figures in profits from domain sales only, July was probably my best month with over $50k in sales. Now it's not actually very much compared to what some of the bigger guys made, but I got started late, had limited funds and ROI was pretty high on most of my deals.

Many of the sales prices I can't reveal due to NDA agreements, but here are some that are public, most sales were done within a couple months after the purchases:

Dickinson.com bought for $3K, sold $12K on Bido
Krom.com bought for $2k, sold $5,5k through afternic
tude.com $1k -> $3750
dato.com $3k -> 9k on sedo
shelbyville.com $1k -> $10k
.. many more


So How does one make money in domaining?

Nowdays there is just one way - buy low, sell high. You can do it by either trying to find great deals and buying real cheap, then selling on auctions/forums for the market price. Or find names that have good potential, buy them at reasonable prices and try to sell considerably higher to 'end users' - people/companies who would have a special interest in them and can pay a price considerably above the market value.

- You need to know the market very well in order to be able to profit from it. Check all recent sales, auctions, know the data to be able to appraise a domain very close to it's market price (roughly a price that a no reserve sedo auction would fetch).
- Have some cash to spend - in domaining you gotta have money to make money.
- Pick a niche, be the best at it. I bought and sold a lot of 4 letter domains and was really good at it. I still have quite a few left that I sell occasionally and buy whenever I see a good deal.
- Learn how to sell, use all venues, learn from the best and see how they do it.
- Reinvest profits to grow bigger!


~DM

[stewmath]

Ive wasted a fortune in domaining so i stopped. i had domains which i thought were ace and nobody was ever interested in buying them. Some of my favorite domains which i just let drop in the end were.

biometricusb.com
javadevelopment.net

ive had others along the way, sites with traffic, keyword names etc

[DomainMagnate]

yes that's how it always starts. I've made a ton of mistakes when I was getting started as well. Regged a ton of useless domains, overpaid for many. Even bought one for $5k, which I later found out was only worth ~$500. That is the only way to learn, but persistence pays off. After a month or two I got a pretty good idea how it all works and what to buy.

[narres]

After a month or two I got a pretty good idea how it all works and what to buy.

And....?

How about letting us into some of the dos and don'ts of the business....

[h0mp]

Are you the one who registered all exact match .com and .net domain names for keywords with more searches than 500 a month and put them up for sale for $2000 each?

[DomainMagnate]

And....?

How about letting us into some of the dos and don'ts of the business....

I covered that in the first post
Don't go rushing in to buy domains before you've done extensive research on the market and know the prices well.

It's not that kind of thread where I tell you you can make a shitload of money in domaining if you buy my ebook and use my golden domaining rule .. It's a lot of hard work and learning mostly.

Are you the one who registered all exact match .com and .net domain names for keywords with more searches than 500 a month and put them up for sale for $2000 each?

Nope. I bought quite a few emds but mostly for development, haven't regged many and didn't list them for sale. 500 is too small anyway, gotta go with 10k+ unless it's a very competitive niche.

[NCMedia]

Good thread bro thx for contributing.

Glad to see it's a different angle for a change too. In my eyes it's all the same shit (find your path((s)) to profit and scale). Never did domaining but can't imagine it being much different than any market where you buy low sell high or even buy high/develop a bit and sell higher etc.

Cool to also see that it's not beer money, it's an actual good income when done right. +1.

[DomainMagnate]

thanks Norb. While all IM people use domains and buy domains, many don't realize how big of an industry domaining actually is. There were over $50M in reported domain sales in the first 6 months of 2011. And only a small chunk of sales get reported, likely below 5% - only the ones that are through public online auctions. The vast majority are private sales.
It is indeed like any other growing, unregulated market, with lots of arbitrage opportunities and many different trends.

[co82]

now I mainly focus on sites.

I had someone ask about my site the other day, and if it was for sale. They asked for the last 12months profit to base a price on, does this sound appropriate?

maybe it was you! your initials arent MK are they? lol ya never know on the internets!

cheers,

C

[smilika]

I had someone ask about my site the other day, and if it was for sale. They asked for the last 12months profit to base a price on, does this sound appropriate?

maybe it was you! your initials arent MK are they? lol ya never know on the internets!

cheers,

C

10x - 12x monthly profits is the industry standard, at least as far as I read. But if you think you can develop the domain significantly, and have the time to do it, then it is not worth it. Of course, if it is not monetized properly, then it is not worth it in any case

[co82]

Of course, if it is not monetized properly, then it is not worth it in any case

Site in question was a mobile app related service, not an affiliate site etc not something I can throw banners up on or any other affil tactics

but 10x-12x yowser!

[DomainMagnate]

I had someone ask about my site the other day, and if it was for sale. They asked for the last 12months profit to base a price on, does this sound appropriate?

maybe it was you! your initials arent MK are they? lol ya never know on the internets!

cheers,

C

no, wasn't me. 12 months rev is indeed common, but a lot depends on the site. How well established it is, how much maintenance is required, how stable is revenue, traffic etc. Personally I usually avoid buying any software/service related sites since they require some expertise, frequent updates, coding etc. Most buyers are looking for hands off sites with minimum maintenance and years of stable traffic and revenue.

[co82]

no, wasn't me. 12 months rev is indeed common, but a lot depends on the site. How well established it is, how much maintenance is required, how stable is revenue, traffic etc. Personally I usually avoid buying any software/service related sites since they require some expertise, frequent updates, coding etc. Most buyers are looking for hands off sites with minimum maintenance and years of stable traffic and revenue.

Good to know! thanks!

[co82]

DM, do you get involved with any other country tld's? like .CA for example? or strictly .com/net/org?

Thanks!

[DomainMagnate]

Yea, we actually had a bunch of .ca domains. Regged dozens of LLL.ca's just before they were all bought out a few years ago, then flipped most. Also bought and sold many generics and short names, like N3.ca, X2.ca, webmoney.ca and plenty of others.

We still have a few of these with my partner. I think .ca generics are a pretty good long term investment as the market is not very active now and you can pick up great deals. Only the real premium generics though with commercial value, that end users would be very interested in.

[VeronicaD]

I seen a domain with lots of dashes, a 3 or 4 word one (don't remember) that sold for 5 digits on Flippa. Brand new reg'd. I went and searched and there are several variations of same thing with dashes in different places or missing where other had one, etc... Thought about buying them, but figured some fluke idiot coulda bought the other?

I have brandable domain (it's a site actually started) --- would you be willing to tell me what you think about it?

[DomainMagnate]

yea that happens too sometimes, I'm aware of a few 6 figure deals where some clueless people bought totally useless hyphenated domains that I wouldn't even take for free. I wouldn't count on that though. But names with good keywords and just one dash can be worth a bit. Brandable domains are hard to evaluate since the value is very subjective. To someone who wants it for their business it can be worth quite a lot, while in an auction they might get no interest at all.

[bluffspot]

yes that's how it always starts. I've made a ton of mistakes when I was getting started as well. Regged a ton of useless domains, overpaid for many. Even bought one for $5k, which I later found out was only worth ~$500. That is the only way to learn, but persistence pays off. After a month or two I got a pretty good idea how it all works and what to buy.

Excellent info - I tend to buy them cheap, build or rebuild them, market them a little then let it age for a few months - sometimes a year then sell - Most of the sites / domains I own I don't do anything with - and thanks to Pingler I get a quick link to them - anyhow - my most important tip for domaining is to keep a running spreadsheet of your domains...

I think the hardest part I had to control was where they were all located - then the usernames and passwords. If I think I'll hold a domain longer than it is registered for I'll move it to NameCheap only because... well, its cheap and they offer free privacy for a year. Anyhow - the spreadsheet - and I'm sure there are apps out there that manage this as well - I just always liked using a spreadsheet -

EDIT: Forgot to mention - one of the best places I have found for finding good domain names is UrbanDictionary(.)com - some newer terms hit there quite fast -

I have included the one I use here

[narres]

Thanks for the spread sheet... LOL @ column K