Yesterday, I analyzed one of the most popular arguments among those who don’t believe in new gTLDs.

Today, I’ll analyze one of the most popular ones among those who do.

A lot of gTLD enthusiasts claim that because gTLDs as a whole will do well, domainers will automatically generate profits.

What I’ll try to explain today is that it’s not necessarily true.

Let’s take a random gTLD as an example, dot 111 and assume it will be reasonably popular.

The registry makes money in that case, this much is obvious.

But does this mean that domainers who invest in .111 domains automatically make money as well?

As mentioned previously, not necessarily.

What you have to understand is that once we’re dealing with a LOT of gTLDs, liquidity will become a huge issue. For some extensions, even if you own amazing keywords, there probably won’t be any buyers on the reseller market.

Your job as a domainer will be identifying the ones that are worth it.

Again, for the registry, the situation is simple.

If the revenue it generates is enough to cover fees and expenses, it breaks even. Everything extra as of that point = profits.

The thing is though, it won’t take a lot for a gTLD to be profitable.

Even if it doesn’t generate all that much buzz, it may very well at least manage to gain enough traction to be profitable.

But unfortunately for domainers, such extensions (gTLDs which are profitable but not insanely popular) won’t have all that much (if any) reseller market activity.

So sure, you have a great domain in that extension.

But if the end user demand is not there (because the gTLD is not popular enough to attract end users), if the reseller market demand isn’t there and if it doesn’t have any parking revenue either, what will you do with it?

New gTLDs aren’t like an index fund where if the industry itself does well, you make money.

No.

Even if gTLDs as a whole will prove to be very lucrative, you won’t make money unless you pick the right ones to invest in.

If you don’t, you’ll be left with nothing more than domains which sound good but for which there’s no demand.