So telling you to stop buying domains when you’re in the business of domaining is a bit crazy yeah ? Many domainers when they discover the art of hand reg, drop catching and domain aftermarkets only focus on acquisition, that is creating a sufficiently large portfolio that you can present to potential retail buyers of domains.
That’s great however, committing to a sales strategy for your domains is more important than the acquisition after you have reached a critical mass. What that level is for you is entirely dependent on your business plan, the ability to fund the purchases and your strategy horizon – short, medium or long.
Let’s say your tipping point is 500 domains at an average price of $50 – you’ll likely have a mix of hand reg, drop catch and aftermarket purchases. That’s an investment of $25K – that’s sobering if you’re self funding. To renew those domain names each year will require an average of let’s say of $10/domain, so 500 x $10= $5000.
So roughly between 12 and 18 months you’re looking at an investment of $30K – that’s a lot of coin when you’re starting out. So how many names will you need to sell to recover that investment ? If you sold your names at an average price of $250 you would need to sell $30,000/$250 = 120 names or 24% of your portfolio to break even.
You will likely need to put some money aside for income tax if you sell more than that and the quantity will vary dependent on your sales prices. If you sold 1 name @ $5K, 5 names @ $1K and the rest at $250 you would be looking at selling 6 names + $20K/$250 = 6 + 80 = 86 domains – still a sizeable quantity of names.
Keep a track of your sales vs your investment capital to make sure you’re making enough effort on the sales side to make money and the ultimate aim is to stop self funding with personal cash and have a self sustaining business. So what type of selling techniques can you use ?
Here are a few:
- If you’re parking your names, whether that’s self parking or with another company, enable the ‘the name is for sale’ option and get those leads in
- list your names at various after markets including your registrar’s after market
- build a network of domainer contacts
- blog about your names and create pages/posts or a website containing a list of all the names you want to sell