How to start with Domain Name Investing
Being a domain name investor since 2014, so many people ask me daily how to start with the domain name investing, what skills one needs to have, and, of course … How Much Money One Can Make.
Especially that “How Much Money One Can Make” is the most common question by far. The short answer is – A LOT. But to answer it really properly, we need to define first exactly what is the domain name investing.
So here it is:
the whole goal of the domain name investing is to purchase a domain name for a certain price and to sell it later to someone else for a higher price. The difference between your sale price and your purchase price is your profit.
So far so good! Sounds easy. Probably everyone who is online and heard something about domain names knows the story: investor A registered domain name in 1996 for $100 and sold it 14 years later for $3 000 000. Or even better: in 1996 investor B register some name for free! Exactly like that: he filled and faxed that order form to his domain name registrar, and the name got into his account. And 20 years later, he simply sold the name for $800 000. Stories like that are all well-known, well-documented, and we are all pretty envious and are ready to repeat that pattern to become millionaires too! There is only 1 small problem with them:
we are not in 1996 anymore.
Saying that we still can ask: why was someone able to register a domain name in 1996 and sell it years later for millions of dollars, and why it was not you and not me? In my personal opinion, there is one main reason for it. And this reason is the following:
Most domain investors who did this between the years 1996 — 2000 will tell you a similar story: they were laughed at by their peers and colleagues. They were ridiculed. And they did not care. They were stubborn. They had a vision.
To put it simply, no one really understood at that time why do they even bother to register some domain names. Some people called the internet a “mistake”, and technology as “the one we do not need”. Billions of people lived on our planet, dozens of millions had already access to the internet and could get those valuable domain names .. but they didn’t.
So is the domain investing over now? Or can you still become a domain investor and make a large profit?
When it comes to .com names, in my personal opinion I do not see much opportunity to make a profit. That is the main reason I personally do not invest in .com names. I recognize very well it is too late for me personally at this point in time. The reason is the following: people who registered great domain names early on are now very well aware of their actual prices. And nobody is going to sell you a domain name for a cheap price, so YOU can make the profit. They will sell you a domain name for the highest price possible (typically 1-word generic .com name can cost you tens or hundreds of thousands of dollars, sometimes even millions of dollars for top keywords), so THEY can make a profit. They are not charity. They are not here you make you profitable. They are here to make them profitable.
So when someone tells you that .com domain names are the best domain investment, you should always ask:
Is it the best investment for ME, or is it the best investment for THEM?
I am not going to answer the question here, as I am sure your own logic and judgment will guide you well.
But domain investing as it stands today is not only investing in .com domain names. There are some amazing alternatives now. We do not have a time machine and we can not go back to the year 1996 to register good .com domain names, but the internet is evolving, and we now luckily have new domain investment opportunities: new gTLDs. And new gTLDs are the type of domain names I personally see as a great opportunity for me and for others as well.
What are the new gTLDs?
New gTLDs (new top-level domains) were launched in 2014 by ICANN to enhance innovation, competition, and consumer choice in domain names. The New gTLD Program is enabling the largest expansion of the domain name system, introducing hundreds of new domain extensions, for example:
.life, .word, .show, .expert, .bet or .online.
So we can now all register and use new and modern domain names like alien.life, paradise.world, space.show, wealth.expert, planet.bet or repay.online, to name a few examples from the author’s personal portfolio, which can be found at brands.interational.
Are new gTLDs a good investment and do they sell well?
It has been only 6 years since their introduction to the internet, but there are already some data available. Here are some top examples:
online.casino sold for 510 000 USD
vacation.rentals sold for 500 300 USD
home.loans sold for 500 000 USD
free.games sold for 335 000 USD
the.club sold for 300 000 USD
As you can see, at the moment of writing (summer 2020), the price for top new gTLD domain names levitates somewhere around half a million dollars. I personally do believe the value of top-quality, keyword-rich new gTLDs will only grow in time. After all, the number of internet users grows every day, and the number of activities moving online grows exponentially. There are more than 7 billion people now, and everyone would like to have a good and unique website address.
How many new gTLDs are registered worldwide at the moment?
At the time of writing, more than 31 000 000 new gTLD domain names are registered among business users, marketing experts, and domain investors worldwide. This is a huge number, considering there is approximately 330 mil domain registered worldwide in total. 10% from total domain count is a significant achievement, particularly when those domain names are here with us only for the last 6 years, since 2014.
As you can see from above, new gTLDs are not so “new” anymore. A good combination of keyword and extension can fetch significant prices when sold to the right buyer, and the total number of registrations globally is impressive. And this is just a start. To conclude:
New gTLDs have great investment potential and can bring you a very high ROI. Here are 5 basic tips you need to follow if you want to successfully invest in them:
1. Study. Learn. Analyze. Read.
Read everything available on the internet before you do any purchases. I see so many new investors purchasing bad new gTLD names. If you purchase a bad name, you will not be able to resell it for ANY profit. This is not an investment: this is you throwing your money away. So before you purchase anything, study, learn, analyze, read. Learn what is a good domain name, and learn what is a bad domain name.
As after all: if it would be that easy that you just purchase a bunch of names, and resell it for profit, everyone would do it, and everyone would be a millionaire overnight. It does not work like that. You need to know exactly what you are purchasing, and why you are purchasing a certain name. If you are not sure, do not purchase it.
2. Do not rely on other people’s opinions.
Most people are not making any money when it comes to domain investing. Most people are massively losing money. Their opinion is therefore pretty much worthless and if you will take it seriously and act accordingly, you will lose money as well. There is absolutely nothing that can replace effort which comes with advising no.1 (Study.Learn.Analyze.Read). If you can not put some intellectual effort into domain investing, please do not do it, you will lose your money.
Ok, if you really need to ask someone what you should purchase, at least ask investors who own GOOD domain names, which you would like to own as well. There are some chances they know what they are doing (although honestly, this is not guaranteed). But it is still better in my opinion than to ask for “advice” from random people on domaining forums and blogs, as most of them have very bad names and no financial success.
But again .. if you need to ask someone, you probably should not purchase it.
3. Do not rely on domain brokers.
Do not rely on the opinion of domain brokers. Domain brokers who are offering you that “fantastic domain investment” are not there to make YOU wealthy. They are primarily there to earn their 10–25 commission from the sale price. They need to make a transaction, as without making transactions there is no commission. To ask the domain broker whether the domain name they offer to you is the “good domain investment” is the same as to ask your barber whether you need a haircut. Use your logic. After all, if the investment would be so good, domain brokers would surely purchase it for themselves (which btw happens frequently if the domain name is indeed really good, and is for undervalued price).
Now, and to be fair, there are some really honest domain brokers, probably less than 1%. There are some really knowledgeable domain brokers who can explain the advantages of specific new gTLD domain names to you and will put your interest before their commission. So yes, they exist. But they are rare species.
If you think you have a special ability to spot them, fine. For the rest of us, again, use your logic and be very careful.
4. Buy domain names your friends will envy you.
One of the best methods to know that you have purchased a great domain name is to share it with your friend or family, with people who are not in the “domaining bubble”. If people outside the domain industry will tell you “wow, what a domain name, I really love it!” or “wow, can I have it too?”, you know that you are on the right track. After all, business users and entrepreneurs who are paying a lot of money for the domain names to domain investors are not necessarily knowledgable in domaining — they simply like the domain name, and they want their business to operate from that specific website address.
5. Only buy a domain name where you can envision big global businesses to operate from.
To successfully invest in new gTLDs, you need to make high-level sales. Those can come only when you invest in domain names big global businesses are happy to operate from.
Always buy only the best quality, and the success will come.
Disclaimer: The above article is a personal opinion of a Marek Eckhaus, CEO at Brands.International and new gTLD investor, and can not be considered or used as investment advice. Always make your own due diligence and your own independent research before making any investment decision.