This summer marks my second anniversary in domaining, and since I missed the one-year mark last year, I’ve decided to do a commemorative post. The last two years have been an incredible learning experience, and I’d like to share a few things that have worked well, and some that haven’t.
My first domain purchase was in 1999, for a Yahoo Geocities fan site I created for an actress that lasted for seven years. It wasn’t until I let the name expire in 2006 and Enom wanted $1900 to get it back (their reason? It was #1 in Google) that I realized people could make money off domains.
Fast forward to June 2010, when I stumbled across Elliot’s Blog and ChefPatrick.com. I was amazed by their success in the domain industry, and figured I might have an aptitude for it. I later found Namepros and DNForum, and read as much as I could.
I did a lot of handregging those days, and some of my earliest registrations included names like CouponCompanies.com, BuyPotatoChips.com, and gems like ColoradoMoldRemoval.com. Like a lot of new investors, I relied heavily on the appraisals threads on Namepros and DNForum, and requested portfolio reviews from several posters there. Several people told me to drop every single one of my names. One guy, upon finding out I was brand new, pointed out that while my names were CRAP, they weren’t as bad as many of the names out there, and encouraged me to keep reading and looking for higher value names.
I did not escape the learning curve that all domainers have to go through, and as I started picking up names on GoDaddy’s TDNAM, my portfolio mushroomed to 400, and eventually, 600 names. This was also around the opening of the .CO landrush period. My tactic for that was to look up past sales figures in DNJournal and pre-order German, Spanish, and English keywords that made sense and had sold for high amounts in other extensions.
I blew through what was, to me, a ridiculous amount of money. But I saw it as a learning experience, and figured that every mistake would teach me what NOT to do in the future.
In August 2010, I launched an LLC, attended Domainfest’s one-day networking event in New York, and around September 2010, I hand-regged and sold my first .DE, MietwagenAustralien.de (“Australia car rentals”) for 350 Euros on Sedo. Since then, 95% of my sales have come from unsolicited offers on Sedo.
Of course, that first sale is a great motivator, and it encouraged me to keep going.
I bought (and subsequently dropped) several dozen .DE travel names and entered into a period of what I call “reactive registration.” I had contact in the travel industry who’d inquired about names with a certain keyword, so I went out and registered several dozen domains with that keyword. Big mistake. I learned you shouldn’t buy or register names to sell to ONE buyer.
January 2011 got off to a great start with a 4-figure sale of a verb .ME to a Canadian startup. It was my 6th month of domaining, and it was a name I’d picked up on the aftermarket in October 2010.
All in all, 2011 was my best year so far in terms of inquiries, with offers on 15 different names on Sedo, and roughly 7-8 more via email. I also sold two .COs – I’m not counting sales of $500 and under. There were several of those, and my methods of searching for and researching names continued to improve. I also spent the most I’ve ever spent on a name at the end of 2011.
The biggest mistake I have made is not being more proactive in contacting end users. Oddly enough, in 2011 I took a stab at brokering a few names for other people, and I’ve sent out email campaigns the few times I’ve had names at auction, but I don’t reach out to end users on a daily, or even a weekly, basis.
My domain sales have been passive, and while that sounds nice, I’m leaving A LOT of money on the table by not actively marketing my names. I’ve dropped names simply because I never bothered to try selling them. That’s not good business. I know what to write in the emails, and how to send them out – I just don’t. I don’t know how Federer and other sellers have streamlined the process down to one that takes a couple of hours, but for me, it takes significantly longer. And I have other things to do.
Secondly, I should have started developing sooner. Again, this is easier if you have a more mangeable-sized portfolio. If you’re acquiring names faster than you can market them, sell them, or build them out, you’ve got a clog in your sales pipeline. I’m fixing that this year.
Like a lot of newer investors, I dropped a lot of domains, and now my portfolio is down to roughly 235. Most of those are .com, followed by 75+ .CO, 18 .TV, and 11 .ME. I’ve had fewer Sedo offers this year, but the starting offers have been better.
My focus in 2012 has been on improving negotiating skills and gearing up to develop a few of my better domains. I still pick up names here and there, but more sparingly than I have in the past. Most of my acquisitions are low-risk, aged 2-word .coms that are taken in other extensions and don’t have a lot of competition from other investors.
I’ve had some expensive learning lessons, but I’ve also reached some of my goals. My goal my first year was to make it into DNJournal’s weekly sales list, and I did. My goal this year is to break open the bottle of champagne that’s in my fridge and is reserved for my first 5-figure sale. It’s only a matter of time, and I invite you to come share a toast with me on Twitter when it happens.
Finally, I have to give a shout-out and thanks to the friends and fellow domainers who have given so generously of their time and have advised, encouraged, and inspired me during these past two years: Acroplex, Patrick Ruddell, Morgan Linton, Elliot Silver, Jeff Overman, Paul Goldstone, HybridDomainer, and everyone I met at Domainfest this year and have interacted with on Twitter and Namepros.