Welcome to a brand new Q&A series on the NamePros Blog. Each article in this series will ask numerous domain name industry experts a single question. The questions and answer will hopefully give you an insight into how these successful industry leaders operate, while also giving valuable advice to help you in your own domain investment activities.
We sent this question out to industry experts, and here’s what they had to say.
Nat Cohen (@telepathy), Owner of Telepathy.com
Andrew Rosener (@SeafoodMan), CEO of Media Options Domain Brokerage
Shane Cultra (@Domain Shane), Domain Investor & Publisher of DSAD.com
Frank Schilling (@Frank.Schilling), CEO of Uniregistry
Giuseppe Graziano (@Giuseppe Graziano), CEO of GGRG Domain Brokerage
Mike Mann (@Mike Mann), Owner of DomainMarket.com
Joe Styler (@Joe Styler), Domain Investor & Aftermarket Product Manager at GoDaddy
Tessa Holcomb, Co-Founder and CEO of Igloo Domain Brokerage
Morgan Linton (@domainflipper), Publisher of MorganLinton.com & Co-founder of Fashion Metric
These responses have been edited for clarity.
If you were starting in the domain industry today with $1,000 to spend, what would you buy?
What if you had $25,000 to invest?
What if you had $25,000 to invest?
We sent this question out to industry experts, and here’s what they had to say.
Nat Cohen (@telepathy), Owner of Telepathy.com
With $1,000, I'd be going after product or keyword domains that dropped that I could quickly resell to companies in [their] industry, and try to build up funds that I could then use to go after higher value domains.
With $25,000, I'd use a similar strategy, but there would be many more domains that I could go after. Also, if I had a good sense of "investor" valuations, I would try to find premium domains in private hands that I could acquire for less than investor pricing and then flip to other domain investors. For a long-term strategy, I'd look for decent 'brandable' domains from drop auctions or other auctions that could be acquired for $500 or less and try to build up a portfolio for eventual end-user sales. This strategy would not bring in any steady income, so I wouldn't pursue this approach if I needed immediate income.
Andrew Rosener (@SeafoodMan), CEO of Media Options Domain Brokerage
I would probably buy underpriced 4 letter .COM domains. I think as far as liquid domains go, they have the highest upside relative to investment cost.
Shane Cultra (@Domain Shane), Domain Investor & Publisher of DSAD.com
With $1,000 I would buy two or three LLLL .COM domains with good letters and vowels. With $25,000 I would buy a few good one-word .COM’s or special two-word .COM’s.
Frank Schilling (@Frank.Schilling), CEO of Uniregistry
I'd look at what generic names are selling (sold) and try to buy registration-priced new gTLDs in select extensions (that make sense) and try to offer those for sale to other owners of other extensions. Here I would avoid trademark intent names and focus on developed generics.
I'd also start calling the owners of expiring names (before they expire) making cash offers of $500-2,000 for great .COM names that will likely sell for much more on NameJet post-expiry.
When I first started out in the industry, I received great advice from Thierry François, a domain veteran, which I will pass along to you. If you only have $1,000 to invest, as the first step, you should decide a niche to focus on (e.g. one word .COM, four letters .COM, etc.). I would study the niche as much as possible and learn exactly how much these type of domains are trading for, who is buying and selling them, and where they are traded.
Once you are comfortable with the trading ranges, I would buy 1-3 domains that I know are priced below market value. As a next step, depending on the type of domain and on the time frame of my investment, I would hold on to it (especially if the domain is a one or two word .COM, or you have a long-term horizon and domaining is not your full time job) and hope for an end user to come along and sell it for a 100%+ net margin. Alternatively, if the domain I bought is liquid, I would try to flip it for a 20%+ net margin and proceed to repeat the process.
Here is instead what I would not do: spend $1,000 in new registrations hoping that someone will buy the domains. This is how I and many other investors lost money when we first started. If a domain has not been registered yet, there is a 99% chance that nobody wants it. Unless you know exactly what you are doing, you are basically playing the lottery hoping to get lucky.
If I had $25,000, then I would do the same process as above, but this time I would go for a 3-letter .COM, a good one-word .COM, or spread the risk with a portfolio of 4-letter .COM with vowels.
Mike Mann (@Mike Mann), Owner of DomainMarket.com
With $1,000? A vacation. With $25k, I’d look at auctions on NameJet for super premium .COM domain names.
Joe Styler (@Joe Styler), Domain Investor & Aftermarket Product Manager at GoDaddy
With $1,000, I would buy a bunch of expired domains that were old (10+ years old) and that I thought had a good resale potential.
With $25,000, I would buy a few short .COM names. I would be patient and check the blogs and forums as well as some of the auctions to pick up 2-3 good category killer names. You can usually get a decent deal if you are patient. If the right domain name presented itself, then I would pay the whole $25,000 for the one really good name.
Tessa Holcomb, Co-Founder and CEO of Igloo Domain Brokerage
With a budget of only $1,000, I might roll the dice and consider acquiring a few of my favorite gTLDs. With a higher budget, I would focus on .COM’s that have consistently proven to be a sound investment yielding great returns.
Morgan Linton (@domainflipper), Publisher of MorganLinton.com & Co-founder of Fashion Metric
If I had $1,000 to spend, I'd likely buy four domain names for $250 each. This would give me the opportunity to go beyond a hand-registered domain but still spread the risk to a handful of domain names. While you're probably not going to sell any of these for many thousands of dollars, selling for $2,500 might be within reason. You'd just have to know that in the early days you might end up buying names you just can't sell, but you'll learn in the process.
If I had $25,000 to invest, then I would buy twenty-five $1,000 domain names. Like I said above, you're going to make some mistakes in the beginning – okay, you'll probably keep making mistakes for years to come – and that's just how it goes. With 25 domains, you can still make plenty of mistakes and end up with a few good domains that could sell for many thousands of dollars.
These responses have been edited for clarity.