Jeff at DomainBits.com made a post about my domain development strategy and Sahar mentioned it on Conceptualist.com. Here is the comment I left on their blogs —
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!).
April 12th, 2008 at 3:49 pm
I mostly agree with your comment, especially the “It is all about finding what works best for you.” Everyone will have different strengths and weaknesses.
I do note though that you seem to agree that it’s worth working toward getting those premium domains :D.
I also look forward to any tips you can provide about outsourcing – I’ve had a real boat load of problems with people I’ve hired to help.
April 13th, 2008 at 1:17 am
Jeff – I’d say that if you have the money to buy traffic and premium domains, by all means go for it. The intrinsic value of pre-existing traffic and memorability is very high.
Even with the premium domain you can either park them OR develop them. You will get a much higher ROI by developing the domain than by parking it.
And to further mention, you can make a lot of money by purely buying, parking and selling premium domains — however, as someone who has a fair bit of experience in domaining industry, tell me — don’t you think the cost barrier for premium domains is very high for someone who is new to the domaining industry or doesn’t have the funds?
Let me give you two examples —
1. Recently BF.com was put for sale on DNForum.com. It is a super-premium domain which I’d love to own. However, I did not have the six-figures being asked for it.
So, do I get disgusted that there is no money to be made in domaining business and get the hell out of here. OR should I keep making money from the flipping strategy and reach a level when I am able to buy six-figure super-premium domains?
2. Rick was able to spend five-figures on those premium domains back in 1998 because he had money in the bank and the cash flow from his export business.
Do you think that I as a high-school kid in India had any chance of grabbing those domains? No way because I could not imagine spending even a few hundred of my parents’ money, let alone thousands into something which was unproven and I had no experience in.
I am sure that a really vast majority of people are in the same situation now as I was back then. So I’d again insist that you have to know the brutal facts of reality and find the way out of it to the top.
And as such the myth of easy money and overnight success is a “Big Fat Lie” the media wants you to believe and is worth a post which I am working on. =)
April 15th, 2008 at 10:28 pm
I second you Mr. Brar. Even I am facing this same situation. Would love to buy those premium domains. I still believe there lots and lots of premium domains still undiscovered. I check availability for lots of such domains and surprisingly i find it available but stay back coz I don’t have enough fund to buy those and add value to it. And also a small fear if it won’t work and primarily affecting my monthly livelihood budget.
January 5th, 2012 at 2:28 am
You are so cool! I dont suppose I have read anything like this before. So good to seek out any individual with some unique ideas on this subject. Realy thanks for starting this up. this website is one thing thats wanted on the net, somebody with a bit originality. useful job for bringing something new to the internet!