I own several hundred domains that have real websites on them, such as Dumb.com, Adoptme.com, and CheapFlowers.com, but for over 10 years I have also had around 9000 domain names that are basically just sitting there doing nothing. I have no plans to create sites on them, I just hold them in the hopes of selling them. In the 1990s I had many of these domains setup on a system I created where I manually put affiliate links on them targeted to the topic of each domain. But, maintaining these sites was a lot of work because affiliate programs were always changing, so I would have to constantly add/edit/delete the links.
In the mid 2000s domain parking companies started offering a service where they setup domain pages for you, and gave you a percentage of the income. See my previous posting about this. This worked great, because there was almost no work involved on my end. For a few years I was making around $10,000/month more from domain parking than the $6000/month in monthly domains fees that I was paying. But, over the past 2-3 years, parking income has gone down to where I make significantly less from it than my monthly domain fees, so that presents a problem for me. I make up for the lost monthly income by selling a few domains a month, but that is not really a good long term business plan. Eventually all my good domains will be gone and the sales income from them will just have gone to pay for the fees, so I will have ended up with nothing.
One reason I did not mind holding all of these domains over the years is that even if I lost some money on them from the fees, their value increased each year. For example, if you add up the individual prices for my domains the combined value for my portfolio is over $20 million. That does not mean I could sell my portfolio for $20 million, but that is what it would go for if I sold each domain one by one at a retail price (like to somebody buying a domain to start their new business). So, if domain prices increase even just 1% a year, that would mean my portfolio value would increase by $200,000/year, which is way more than any money I would lose in a year from fees. Any, most years domain prices have gone up anywhere from 10%-50%.
On the other hand, domain prices have leveled off in the past few years, and may never get much higher. Even if they do keep going up, having domains worth a lot of money on paper is not the same as having real money in the bank. When my domains were making an annual profit none of this really mattered, but now that things have changed I need to figure out what to do. Here’s what I am working on:
A) If I could sell all of my domains at once to one buyer at a wholesale price, like for $8 million for example, I would make $15,000/month in interest from the money in the bank (after income taxes and the brokerage fee I would net around $4.5 million from the sale) plus I would gain another $2000/month from the savings on domain fees (the difference between my parking income and my registration fees) that I no longer have to pay. That is way more than I can make right now by selling some of the domains every month. I have contacted several brokers about selling my portfolio, but they say there are very few buyers right now for portfolios of domains that have no significant traffic or income. But, I am still working on this.
B) Since I might not be able to sell all my domains at once, I am at least trying to sell more of them than I was before, so I have been listing more of them individually with brokers, and I have been more negotiable when a buyer contacts me about a domain. If I can sell twice as many domains as I had been selling before, then that income would be much higher than my annual domain fees. Even if I sell 100-200 domains a year, I still have enough good ones to keep selling them for the rest of my life.
C) Over 90% of my parked domains make less than the annual registration fee, and at least 50% make $0. That is not good. So, over the past few months I have instead been setting up most of my domains on a new system I built where I have actual content on the domains (mainly informational type articles related to the domain topic that I hired people to write for me), and I make money from the ads on the sites. These are known in the industry as minisites. Unlike parked domains, which generally get no search engine traffic, minisites at least have a chance of getting listed well in the search engines and getting lots of traffic. Google especially places a high ranking value on older domains, so my domains should do well.
D) I have around 350 geographic florist domain names (you can see a list of them at FindFlorists.com), which I had been pointing for many years to my GetFlowers.com site. They probably generated a few sales a month at GetFlowers.com, but they got almost no listings in the search engines because they all had the same content on them. So, last week I changed them to a new system where I have actual florist related content on each domain, and I make money from the ads on the page. So far it is not making more money than before, but my goal is that over time the domains will get a lot of traffic from the search engines. It cost me $3000/year in fees to own these domains, and I hardly ever sell any of them, so hopefully this new format will generate a profit.
F) I am working on setting up real sites on some of the better domains that currently make no money. I something like this recently with WatchMovies.com (see my previous posting about this), but WatchMovies.com was already making a lot of money from being parked, so it becomes a problem if I can’t make as much with the new site. But, if I setup a site on a domain that currently makes nothing, then I have nothing to lose. Next I am going to setup a site on my WatchVideos.com domain, which currently only makes around $100/month from being parked. Since I already have a bunch of servers and people working for me, it costs me almost nothing to setup new sites, so I plan on setting up more of them on my bigger domains.
In the past I have spent very little time selling and promoting my domains, and most of my time running my business and creating new sites. But, now that things have changed with domain parking, I plan to focus a lot more on figuring out the best way to make money from my portfolio of domains.