Categorized | Domaining Tips

You Can Even Lose Money With Free Domains

Posted on 15 June 2016 by Andrei

Today, it’s easier than ever before to buy domains on the cheap… the only problem is that the “quantity over quality” strategy doesn’t exactly work very well… at least not usually.

The title I’ve chosen may seem weird but it’s quite accurate.

Some of you might remember that Dot Berlin offered free domains at one point. I registered 100 of them as an experiment.

Here’s a copy/paste of the post in which I shared my conclusions:

“As some of you remember, I tried a little experiment back when Dot Berlin offered 100 free domains. I did a bit of research, found out what the most widely used letters in Germany are and hand registered 100 LLL Dot Berlin domains. Next, I pointed them to a very simple “domain for sale” page with a message in English and one in German (my German is a bit rusty but decent nonetheless) and waited until renewal time came along. On each “domain for sale” page, I displayed a very low Buy It Now price: 295 EUR.

Here we are, one year later and it’s time for some conclusions.

The result: I’ll be dropping all of them 🙂

To be fair, I did receive one offer, 100 EUR for TTD.Berlin if I recall correctly.

Tried negotiating with the person in question but to no avail.

This tends to re-confirm what I’ve been saying about new gTLDs all along: yes, there may very well be a “pulse” (I did indeed receive one offer, which is better than nothing) but if you don’t own the best of the best domains, selling to end users will be an uphill battle to say the least.

Perhaps with LL Dot Berlin domains (two letters) instead of LLLs, the results would have been different. The bottom line is that if you aren’t able to secure the very best new gTLD domains, selling to end users or other domainers is easier said than done. In light of the fact that the best new gTLDs either come with premium prices or are reserved, the value proposition for domainers is just not there.”

But… what does this have to do with losing money?

Well, think about it for a moment.

How did I lose money?

The registrations didn’t cost me anything, so I didn’t lose money on registration fees.

However, let’s not forget about the most important element in this equation: my time.

How much time did I invest?

Well, I did a little bit of research, didn’t just randomly reg 100 names. I chose 100 LLLs based on letter popularity in Germany, I then pointed them to “domain for sale” landing pages and all in all, I’d say I invested two hours of my time.

So it all depends on the amount I think an hour of my time is worth.

If someone asks me how much I charge for consulting services, I reply with $95 per hour. So there we have it, this is how much an hour of my time is worth.

Multiply it by two and we have $190, that’s how much money I lost.

As mentioned in the conclusions, I did have one 100 EUR offer but even if that offer would have turned into a 100 EUR sale, I would have still lost money because I value my time at more than 50 EUR/hour.

The conclusion should therefore be simple: never ever forget to factor in your time. Nobody’s going to give you an hour you spent regging domains back, might as well attribute a monetary value to it 🙂

4 Comments For This Post

  1. Adam Says:

    I couldn’t agree more Andrei.

    Are there opportunities with new gTLDs. Sure, but there are few. The only one I’m happy about is Blockchain(.)link because it makes sense with the extension.

    I’m not going to spend hours looking for .XYZ domains and worrying about listing them.

    Time is valuable. Even if I’m not working, I’d rather spend my time walking and playing with my dogs. Watching movies, chatting up cute girls, etc. I guess most people don’t’ care about enjoying life? 🙂

  2. Eric Lyon Says:

    I suppose it really comes down to geography. While some areas of the world have a higher economic demand for every day living, we still have to keep in mind that there are areas of the world where $1 to $5 per day (Average) allows an individual to live comfortably. Other areas of the the world require $75 to $200 per day (average) to live comfortably.

    Of course, even those numbers are based on bare minimums without compensating for any materialistic “Wants”. They do however put a little perspective on the subject though.

    Where I may not be comfortable and losing money if I’m not averaging $20 to $50 per hour, there are many investors in other countries that are comfortable and happy with $5 to $20 per day.

    I do agree, that time is worth money, we just can’t rule out that some investors are able to live comfortably in their local economy for much less ROI than others.

  3. Adam Says:

    Excellent point Eric.

  4. Aline Says:

    Time is money – that is true, but you didn’t waste your time on the experiment. You learned something valuable that you would not have learned had you not tried or experimented, then you imparted that knowledge to us here. Granted that knowledge and sharing can’t be quantified as easily as time and you can’t buy lunch with it, but it is valuable just the same.

 
 
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