And Some of the Ways Investing in Domains is Even Better Today
Many domain investors that have just started in the recent few years have lamented that had they been investing in domains back in early to late 1990’s things would have been much different. That the boat has long sailed for those wanting to have similar successes to the visionary investors back them. Things are different, that’s for sure. But we are still in the golden age of domaining. Here are some of the reasons why.
Still Very Few Players in the Aftermarket
If you compare the domain aftermarket to the physical real estate market, you will see that there are still very few agents with professional marketplaces selling domain real estate versus the many competing realties and agents in any given physical real estate market.
Most domain investors are still learning how to effectively market their domains to end-users and rely mostly on the few marketplaces that take advantage of the open field, or void, if you will. So today the domain market space is very much open to new niche and boutique marketplaces that can differentiate themselves from the mainstream ones. If you have some business acumen and are marketing savvy, then the world is your oyster.
The Cost of Holding on to Domains Since the 90’s Compared to Aftermarket Pricing Today
Consider if you had registered a domain 20 years ago for $25-$35 (before then they were $100 per year) and lets say your renewal was an average of $20 per year since then. Your overall investment easily would cost over $300 to hold on to that domain until now, at the very least. Can you purchase a domain for around $300 on the aftermarket that is vastly superior to ones that are available at hand registration price? Absolutely. You can still be able to purchase a 10 to 20 year old domain on the aftermarket and sell it for 10x to 100x profit to an end-user. This has happened recently and is still possible.
Consider, too, that the recorded top domain sales where not made by the owner just sitting around and waiting for the escrow transfer to complete. There were costs involved beyond the price of the domain itself. Finding the right end-user buyer involves a level of salesmanship. We don’t hear about the added expenses in terms of time, marketing costs, and legal fees that are likely involved before closing the sale. That is true for the large sales. Domainers back then did not have professional domain shops or marketplaces.
How the New gTLD’s Prove We Are in the Early Stages Still
The way the new ‘generic top-level domains’ have been rolled out and are managed on the registry side prove we are in the early stages of domaining. How so? In short, the lack of congruence, oversight, and foresight over how the new gTLD’s are managed shows this is still a very young industry. Premium domains are being held back from registration by the registries. Lack of a clear marketing plan or message. We hear of registries increasing renewal prices at whim. Domainers are left with the job of explaining why these TLD’s are ideal to end-users. Does this sound like a well established and matured industry? Sounds more like the wild west. It seems that the registries are doing everything possible against a wide acceptance of the new gTLD’s. Premium pricing is the perfect example of this.
Premium pricing for hand-reg domains in the new gTLD extensions has made dot com’s (and other aged extensions) even more attractive. For example, at this time, DrugCrime.Attorney or DrugCrime.Lawyer is $5,499.99 for new registration and annual renewal! As a hypothetical, even if you would pay twice or three times that for DrugCrimeLawyer.com or DrugCrimeAttorney.com, it would still be a much better deal because the renewal for those is just around $10 to $15, a fair annual renewal rate that everyone is far more accustomed to paying. The exaggerated registration and renewal prices for the premium new TLD’s make the aftermarket options for dot com domains, and other extensions, that much more enticing and even makes them more in demand. This was not the case back in the 90’s when dot com as a whole was not established in the public’s psyche as it is today.
There are More Options for Advertising and Recurring Revenue Today
If you were a domain investor back in the 90’s you would be part of a very small group. If you wanted to make money with your domains, it was virtually impossible. There was no parking and no PPC in existence. Small businesses did not know what a domain name was. If any were online, they likely were using a subfolder of the Web hosting company’s domain.
Today, on the other hand, there are many options available to domain investors that want to make recurring revenue with their domains. There are a number of parking companies now to choose from (albeit revenue is very low). Development costs have gone down and building a professional-looking site to put up affiliate and other revenue generating links is within the reach of most investors. Businesses, both small and large, are competing for keywords that many domain investors are holding exact match domains for. Opportunities are boundless.
Furthermore, Domain marketing software such as Domain Market Pro has made it possible that for a very low cost domain investors can create customized niche and boutique marketplaces to sell domains and, create effective domain sales and landing pages. And they can do so in relatively very short amount of time, leaving more time and money to do the actual selling.
As you can see, we are now in very exciting times when the domaining industry is still very young. So young that even the word ‘domaining’ does not pass the spellchecker test yet. But seriously, we can see that just by comparing where physical real estate is at as an industry to domain real estate. In many ways it is even more exciting now than back in the early early days. There are more opportunities now and more tools, but there is still so much room to grow and learn.