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”.
For the domains you mentioned that you flipped, did you actively go out and try to sell them, or did someone come to you to buy them?
The ones I flipped were sold through brokers.
Thanks for sharing your insights and wisdoms. It is very helpful. I notice your experiments don’t have a marketing component. Basically…you built the site and guage the traffic & the money you made. I wonder if it could be successful if you also have a compaigns for building back links, advertising on appropriate websites, and using social media. I am very curious.
I am paying an SEO person to promote my sites, but so far that has resulted in almost no increase in income. But, it is still way less than most people do for marketing.
Thanks for sharing the results from your tests with buying and developing large domains.
Your insights are appreciated, as it helps the rest of us learn.
Appreciate the candour
Hard enough to rank high in SEO & make money for a ‘proper’ site in competitive keywords – let alone a half hearted effort by domainer ‘developers’ with limited expertise in the field.
Let that be a lesson to Bhanot & ‘John’, the clueless ones
Thanks Eric! Is the takeaway that you’ll look for another round of large-ticket domains with great prices for resale? Is that a business model for you?
Yes, I am on the lookout for some big ticket domains that I can buy cheap.
Can you disclose the brokers?
Yes, the 2 main brokers I use are:
Andrew Rosener at MediaOptions.com Email: email@example.com
Ryan Colby and Jenna at DomainHoldings.com Email: firstname.lastname@example.org
They are both great.
I own a TON of great dot COM’s – fishcasting, foodcasting, Podlywood, LBweekly, ThePrimeSpot, OccupyZombies, etc. but wanted another – DearJohn. But it was taken! That is how I came across your very informative blog. Do you share the best brokers? What’s typical commission/costs?
For domain brokers, I recommend:
Andrew Rosener at http://www.mediaoptions.com Email: email@example.com
Ryan Colby and Jenna at DomainHoldings.com Email: firstname.lastname@example.org
Toby Clements at TobyClements.com
Evan at Huntingmoon.com Email: email@example.com (they sold my portfolio of adult domains, plus a few non-adult ones)
plus Sedo.com and Afternic.com.
Most brokers charge 10%-20% commission.
***** May I thank you for your Company’s policy of plain, straight-forward web-sites. I think that the current mania for complex, flash websites is dreadful. Although my main hobby is completing hard-copy word-puzzles, I resent every second I spend having to puzzle out drop-down menus and playing hunt-the-link when I just want to buy something.
***** The strange thing is that those of my friends who share my word-play hobbies feel exactly the same. We all use the internet, but to buy stuff, not to surf it. If this is reflected across the globe then it will explain the high prices currently being paid for simple, short word combinations; i.e domains.
***** Over the last few days, I have spent an hour here and there to see if I could come up with some decent domains. As a result, I registered weundercut.com, a1blokes.com, hoyyou.com and xthanx.com > Are these any good? If so, there was nothing difficult about it, and I know 3 or 4 other people who could do just as good or better. In the recent past, I have registered onfourwheels.com, tearinghurry.com, ufascinateme.com and talcumbum.com
***** I know little about domains, but to me, mine look as good as those recently sold for silly money. If they are in that league then the reason for the current prices is that the millions of ‘intellectual puzzlers’ across the world, know nothing about this domain bun-fight. And when they do, the prices will drop through the floor, because myself and my friends can ‘knock these out’ all day indefinitely.
***** The idea that there is a finite limit on aesthetic 3 or even 2 word combinations is hilarious. Logic tells you that there must be, but when you chuck in abbreviations, misspellings and the occasional number, that limit is way beyond any need to worry.
***** Anyway, thanks for your time in reading this, and do you think it is worth me contacting Andrew Rosener at MediaOptions? Best wishes. William E.
weundercut.com is a good domain. For the other domains, as you said, you never know what kind of high offers you will get, so it can’t hurt to try selling them. I agree, I often register new short and catchy domains for sites I want to create, so if you spend 1/2 and hour to an hour looking you can usually find something.
I don’t think Andrew Rosener would sell any of those domains, but they would be good to put on Sedo.com or Afternic.com, and also Godaddy.com auctions sells a lot of domains like those.
MY DOMAIN EFFORTS
Thank you for your feedback on my attempts to come up with domain names. As you didn’t say ‘don’t give up the day job’ I will now study the thing properly. If you had to recommend one good book on the domain name business, what would it be?
BUILDING A WEBSITE RE TRAFFIC
Last summer I paid a webmaster to build me a commercial ebook shop web site, using Xsitepro2. I wrote a small review for every product, and sometimes a large review, so there was plenty for a search spider to work through. I don’t think that that site has ever had any natural traffic.
In the autumn I took a free blog and started writing on a niche hobby of mine. I did nothing to promote that blog, but I had natural visitors almost from the first week. Around 50 visitors turned up in the first month, and all I was doing was blogging my knowledge. For a brief period I even ranked Number One in google.
When Flo Rida’s ‘Good Feeling’ appeared on a TV ad I blogged my interpretation of its lyrics and I had visitors who searched “explain Flo Rida lyrics” (I have Visitor Analytics).
My view is that google’s search algorythms are dramatically IN FAVOUR of blog sites, and SKEWED AGAINST commercial websites. If I ever develop a domain name in the future, it will be with a WordPress-type blog, which has a facility for sales pages.
Best wishes. William.
I have never read any domain books, but two I have heard about are:
The Domain Game by David Kesmodel
Get Rich Click by Marc Ostrofsky (he is a domainer, although the book is about lots of different topics)
That is so true. As an author and business man, I can relate to how you said ” 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”. I hope more people discover your blog because you really know what you’re talking about. Can’t wait to read more from you!