Yes, I agree with you that development takes a bit of effort. But the way to that and to scale-up the strategy is to outsource as much as you can — while making sure that you minimize the costs involved.
One of the first posts which I have made as a follow-up is 6 Ways Not to Go Broke Developing Domains — Lessons That I Have Learnt the Hard Way.
As I confessed in the article, I was initially forced into the strategy because of what I had on my plate — too many domains which people were not buying. So what started as a way to cut my losses turned into a nice revenue stream. The ROI was high-enough to keep me going.
You also have to remember that most premium domains and traffic domains are pretty expensive and out of the reach of a new-domainer who may not have enough funds to support the investment.
Remember the old saying – “Money Makes Money”?
If you don’t have enough money to get into premium domains, this strategy is a good one to boot-strap your way up and get a taste and experience of domaining industry.
The money that you make from these flips can be reinvested in whatever way you can maximize your revenue — which could be re-investing in other sites that you can flip OR premium and traffic domains.
It is all about finding what works best for you.
BTW Jeff and Sahar — thanks a lot for mentioning DomainingTips.com on your blogs. I appreciate it and keep up the good work!
Update - David J Castello left a very interesting comment on Jeff’s blog, reprinted below –
True, developing is a lot of blood,sweat and tears, but pound-for-pound nothing generates more revenue. There is one well know cyber-journalist who owns about 6,000 domain names. He told me that his one developed name generates 10X more than his 5,999 parked names. And some of his parked names are quite good.
The same goes for me and my brother. The front page alone of PalmSprings.com generates over 60K a month in revenue. We could never generate this much money from parking (unless it was Sex.com!).