Domain name investing- is it still profitable in 2023

Domain aftermarket sales is an industry that began in earnest around 2010. By this time most quality domain names were already registered. Though high ticket sales had occurred earlier, by this point even two word .com domains with high quality keywords had begun to gain significant worth. To companies, a memorable domain name can pay for itself.

I began my domain name investment journey in 2018 and have had the most sales success the past two years. The sales that I’ve generated have paid for the registration and renewal fees for my whole fleet until 2025. Though I’m by no means living off of my earnings, based on this my experience, the process hasn’t been a huge cash sinkhole, and has proven to be profitable.

Examples from my Domain Sales record
$8 (plus registration and renewal fees)$30 (plus registration and renewal fees)$425 (plus registration and renewal fees)$30 (plus registration and renewal fees)
$800 after commission$600 after commission$3200 after commission$700 after commission
Table of some of my domain sales

The key is to try to acquire domains that have high value keywords based on sales history, or have two words that articulate well together. For example, has two words that individually though good don’t have a whole lot of sales history. But they articulate well together and would be perfect a sports tipping, predictions or betting site.

It takes time to sell a domain

Of course it takes time to sell domains. Especially in my company as I don’t actively advertise them other than parking a ‘for sale’ notice on the domain. The current sales process I have requires someone to type in the domain to GoDaddy or go directly to the URL. To optimize sales speed consider utilizing additional strategies.

It’s also not all sunshine and roses as the renewal fees can add up. It usually costs around 10-14 AUD to renew each domain each year. I also have a lot of domains sitting unsold at any given time. Choosing domains based on commercial potential is really important so that you don’t have a high amount of stock draining your bank account.

Expiring auctions vs closeout domains

Expiring auctions

Expiring auctions are domain auctions of previously registered domains that have not been renewed. This is occurs due to the previous owner forgetting or being unable to reregister the domain. Or they might no longer have purpose for it and not realize the re-sale value.

Expiring AuctionsDomain Closeouts
Pros Higher quality/ value domains
Can get an insight into other investor’s opinions on the worth of a domain
Cheaper domains
Hidden gems can slip under the radar
Don’t have to be monitoring or engaging in the bidding process
ConsHigher purchase price due to competition
Need to time bids to avoid competition
Closeout domains are usually Dutch auctioned which means they do require some outlay to purchase earlier in the auction- have to weigh up risk vs reward of waiting for price to lower or buying immediately
Usually lower quality as highest quality domains are snapped up early on in the expiry auction process
Requires a lot of time to search through the list of closeouts to find domains with value

Tips of the domain trade

Don’t buy low quality domains. You need to conduct research to determine the quality and commercial potential of the keywords. Low quality domains will rot in your portfolio and cost you money until you drop them. It’s ok to take a risk on a closeout, but just make sure you can justify it. It’s not worth buying unless a business or other cashed up entity would want it as their name.

Dot-com domains are considered the golden standard of investing, but don’t sleep on high quality established tld’s such as .nets and .orgs.

Once you have established a high quality selection of domain names, the time cost of locating good domains decreases and it becomes a passive income stream. Patience is critical to success in this business. Even my highest quality domain took 2 years to sell after holding for 4 years. But when it did it was worth it.

Strategy to invest in domains full time

In order to sell domains full time, one would need a large portfolio of high quality domains. It takes time to develop a domain selling operation as sourcing quality domains at the right price should not be rushed. My suggestion would be to build up the portfolio gradually as you begin to make sales and eventually transition into higher ticket domains. Domains which you aim to sell for between 1000-3000 are a good starting point. These are within the range of what a small business, firm or startup could afford to pay. Higher value domains would be good to acquire if possible, but bear in mind, a smaller number of buyers exist as prices get higher.

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