Earlier this year I bought some big domain names (such as Physical.com – see my blog posting about it) to develop into websites, even though I already have 5,000 other domains I have not developed yet. As with many of the things I do online, this was an experiment to see if I could make money.
It has only been 5 months, and I did not put a lot of time or effort into this, since I also spent time running my hundreds of other sites and on other new projects I am working on, but here’s my results/observations so far:
1. I developed article type sites on most of the domains (see AdvertisingAgency.com as an example), and the site I put the most effort into was Adventure.com which I developed into a video game site and then later added other adventure related content. For the article sites, all the content was custom written, and for Adventure.com I had somebody custom write descriptions for 1000 of the games and create screenshots for them, but so far none of the sites I created got any significant traffic from any of this. A few are making at best a couple of dollars a day, and most make almost nothing. So, I would consider my domain development efforts to be a failure for those types of sites.
2. One reason I bought these domains was because I think that I got them at fire-sale type prices, so I figured worst case scenario I could sell them for what I paid if I did not make money from developing them. I also thought there was a chance over time I might get some high offers and flip them for a big profit. The good thing is that I was right about low prices I paid. I have had offers on most of the domains for over the prices I paid, and I have already sold some such as Humidifiers.com. Due to contractual restrictions I can’t disclose prices on the domains I sold, but overall I made a good profit from all of this.
3. Although I did not make a killing from it, and buying big domains is risky, it seems a lot easier to make money flipping domains than developing them. Creating and running websites is a lot more work than just buying and selling domains. Unlike most other domainers, I am in a better position to flip domains because if I can’t easily sell a domain I can develop it instead and hold it as long as needed until I get a good offer on it.
4. Some of the higher offers I received were buyers who wanted to make payments over time, like 1-3 years. Since I am not in need of cash right now, these types of offers are appealing to me if it allows me to sell the domain for a higher price.
5. I don’t think any of my sales were because I developed the domains. But, you never know how much a site with a great domain will make, so it is always worth trying to put up something on the domain instead of just parking it. If any of the sites had made significant money I would not have sold them.
6. All of the domains I bought were from sellers who were desperate for cash and pretty much had to take whatever price they could get for their domain. They did not have the benefit of trying to sell it over a long period of time to get the best price for it. So, that seems to be where the potential profit for me comes from.
In conclusion, I am glad I took a chance and bought these domains. Even if I had made no money from them, as long as I did not lose anything, I would have been happy that I got to experiment with them. It is very hard to know ahead of time what will make money, and the only way to find out is to try. As they say, “A ship in the harbor is safe but that’s not what ships are built for”.