Domain Investing News Recap for the week of September 9th 2019

Domain Investing News

Well we’re getting a bit of a heat wave here in SF and somehow it’s 92 degrees today. I told a friend in NY and he didn’t believe me, so I sent him some proof, in case you need it as well, here ya’ go:

San Francisco Heat Wave

Luckily we get back down the the 70’s for all of next week, anything above about 85 is too hot for me. As usual, this was another busy week in the domain investing world, here are the stories that caught my eye this week.

Escrow.com Parting Ways with Wells Fargo
(Read more on DomainInvesting.com)

GGRG Releases Their Latest Quarterly Report on Short .Com Domain Sales in an Impressive New Format
(Read more on DNJournal)

Botterman is new ICANN chair
(Read more on DomainIncite)

Court rules scraping a website without permission not illegal
(Read more on TheDomains)

12 end user domain name sales this week
(Read more on Domain Name Wire)

Vaping domains: a dying genre for domain name investors
(Read more on DomainGang)

Should you ever criticize the portfolio of another?
(Read more on TLDInvestors)

3 insights on the top ten domain sales from yesterday

One thing I realize that I don’t do often enough is analyze recent domain sales and share some of the trends in the market. I do this myself, pretty much daily, but typically keep it in my head or talk about it generally in blog posts. Today I was thinking it probably makes sense to do some of that analysis out in the open, so let’s do this thing.

The two places I visit constantly to stay on top of domain sales data are DNJournal and NameBio. Both have been providing a ton of data to domain investors for free for as long as I can remember so hat’s off to both for doing that.

So let’s take a look at the top ten domain sales from yesterday:

Top ten domain sales

It’s easy to spot three trends here.

  1. Nine of the ten sales are .COM domains, German’s .DE which has a long history of being the top performing ccTLD was the only non .COM in the top ten.
  2. BuyDomains takes the cake as the #1 marketplace representing 40% of the sales from yesterday followed by Go Daddy at 30%.
  3. Seven out of the top ten sales are two-word .COMs.

Let me know if you like quick analysis like this and I can do it more often, or if you think it’s boring and obvious, tell me that and I won’t bug you with it again!

Did I go too far in my blog post yesterday? I think I might have…

Yesterday I wrote a blog post about a new domain investor who has been tweeting about his investments in .CX domain names. I wrote the post, hit publish, and woke up this morning to a stream of comments. What I saw honestly didn’t feel great, it was either people really slamming this new Domainer or commenters calling me a jerk for picking on a new investor.

So I think I went too far and I feel bad about it.

I think what I was responding to is a somewhat protective feeling for new domain investors that I think can often read what other new investors are doing and mimic their strategy. I do think there is very little data around .CX being a good investment and I guess I felt that Johan was writing about it on Twitter as if it was a successful investment strategy.

I’ve seen new domain investors go down the wrong path and lose a lot of money doing it. For some, they have the play money, but it’s sad to see someone that invests money that is very meaningful to them and their family into domains just to lose it all. I do think .CX is a very risky investment and that’s really what I wanted to get across in my post. I have also talked about the dangers of investing in domains that violate known Trademarks so felt that was important to bring up as well.

Okay, now all that being said, after reading my post again I think I come off sounding like a jerk. I emailed an apology to Jothan and he sent a nice and well-written email back, and yes – he felt singled out and I can understand why.

So I’d like to take a minute to apologize publicly to Jothan for my post yesterday and some of the wording that I used. Looking back on it, yeah – probably not the right way to share my opinion.

For new domain investors who read my blog, I guess what I’m trying to say is, if you’re getting started in the Domaining world, I’d be very careful with putting too much money into things like .CX domains…but I probably just could have said that without dragging Jothan through the mud.

That being said, there are two kinds of people in this world, those who will never apologize for anything and think everything they do is right…and those who know when they screw up and apologize. I’m in category #2 so Jothan – I’m sorry about that, it wasn’t the right way to share my thoughts, you seem like a good guy and you deserve a warm welcome to the Domaining world. I hope to buy you a beer someday and would welcome an interview with you on my blog so you can share your journey with us.

This guy is hand-registering a bunch of .CX domains…

Dosebuy Domains

Every once and awhile (okay more than that) someone jumps into the domain name world, ignore all the advice experienced investors give, and try to forge their own path. I’m all for trying new things but I’m not crazy about repeating other people’s mistakes.

One of the great things about the domain investing world is that there are resources like DomainSherpa and DNAcademy that can help new domain investors get started on the right foot.

For me and many other domain investors, hand registering a bunch of random domains that we “thought” would be worth a fortune was our first mistake. In any new market, just jumping in and spending money often ends in, well, losing money.

The people I’ve seen excel at domain investing are those who take the time to listen, read, and learn. In many cases they don’t repeat other’s mistakes and actually end up starting out with some pretty solid investments. Two great examples here are Josh Reason and Josh Schoen. Both Josh’s are buying really solid domains and they really took the time to learn the market before diving in.

Then there’s DoseBuy. Now before I go any further I want to say, the point of this post is not to be mean or make fun of Johan, the man behind DoseBuy. I think it’s great that he’s publicly sharing his journey in the domain world with all of us.

That being said, I see him repeating mistakes that so many new domain investors have made, and he doesn’t seem to care what people think, he’s just forging ahead on his own path. Johan’s focus has been hand-registering domains and he’s picking up some pretty dangerous Trademark violations like AllThingsStadia.com (Google Trademark) and some really long weird names like CanItBeConfirmed.com.

Lately he’s been tweeting quite a bit about the one word .CX domains he’s been registering. I’ll be honest…I’ve never heard of .CX, and there’s a good chance you haven’t either. Which is why I’m also not surprised that a bunch of one-word .CX domains were available.

As you can see from the image at the top of this post, today Johan tweeted some of his .CX domains to President Trump in an attempt to start a vote and retweet campaign on Twitter…so far no takers.

Like I said above, I appreciate Johan sharing what he’s doing, but I hope at some point he takes the time to go through Michael Cyger’s DNAcademy as I think it will save him a lot of money down the road. Buying 10 .CX names costs around $200 and I think it’s safe to say one expired two-word .COM for $200 would very likely produce a much higher ROI, but to each their own.

Of course maybe I’m missing the boat here. Maybe .CX is the next big thing and Johan is sitting on a goldmine…okay, I’m being sarcastic there. Still, since I think Johan will be reading this I want to tell him – keep on being yourself and doing what you want to do. Just know that registering Trademarks isn’t a great idea and hand registering domains tends to be a money loser unless you really know what you’re doing. I would be happy to pay for admission to DNAcademy if you’d like – in the end I think you probably could make good money in domains because you’re clearly interested in the space.

If you want to take a look at Johan’s portfolio it is available here – https://dosebuy.com/portfolio

Now it’s your turn. What do you think? I want to hear from you, comment and let your voice be heard!

What’s the one thing you wish you knew about domain investing before you started?

Domain Investing lessons learned

Ah regrets, I mean “lessons learned” – an important step in anyone’s journey to doing anything that actually works. While it would be great to say that every domain investors instantly knew the right domains to buy, the reality is, most of us didn’t, and so we learned the hard way.

While I said regrets above, that’s really too harsh since you shouldn’t regret things you learned that helped you get to where you are today. So let’s just call it “domain investing lessons learned at the school of hard knocks.”

For me, this lesson was pretty simple but very powerful. I’ll share it below so it doesn’t blend in with everything else. The one thing I wish I knew about domain investing before I started is:

Don’t waste time hand-registering a bunch of domains, buy two-word .COMs off the drops.

And if I had to share a second lesson it would be:

Go to domain conferences and talk with people way more successful than you are…you might learn a thing or two.

Okay, so I shared two things, now you only have to share one, but if you want to share two, be my guest. What are one (or two) things you wish you knew about domain investing before your started?

As usual – I want to hear from you, comment and let your voice be heard!

The liquid value of your portfolio is probably a lot lower than you think

Liquid domain value

I had an interesting conversation last week with another domain investor about what your portfolio would be worth if you needed to sell it right away. No surprisingly, you’re going to get a lot less per-domain when you sell in bulk than if you were to wait for the right buyer and sell individually.

While you might think you have a multi-million dollar portfolio, try to sell it all at once and you may be in for a rude awakening.

Now as for what the liquid value of your portfolio might be, that’s certainly up for debate. In general, with a strong portfolio full of .COM domains the going per-domain value is often in the $100 – $500 according to the person I spoke with. This means if you have an 1,000 name portfolio with a lot of solid .COMs you can expect to get maybe $250k for it if all goes well.

In many cases, a portfolio like this sold over time could net millions of dollars or even get into the $10M+ depending on the quality of the name. However, try to sell it fast, and all at once, and the leverage instantly goes to the buyer.

Now all this being said, I think most domain investors know that the key to making domain names an exceptionally profitable investment is not rushing to sell all your names but instead waiting until buyers come to you. At the same time, people get pretty darn emotional when it comes to their domain names and sometimes with emotion comes a bit of delusion.

So while you might make $1M+ by selling domains for the next 10+ years. What kind of a hit do you think you’d take if you tried to sell them all today? I think it’s a big hit, like take a tenth of a twentieth of what you would have made. What do you think? I want to hear from you, comment and let your voice be heard!

Domain Investing News Recap for the week of September 2nd 2019

Domain Investing News
Domain Investing News

Hello, happy Friday and welcome to my weekly domain investing news roundup. I decided that rather than bore you with some long-winded paragraph before the news, I’ll dive right in, so you only wasted your time reading this sentence. Now onto the news!

  • Basecamp CEO Looking for a Great Domain Name
    (read more on DomainInvesting.com)
  • CentralNic reports H1 earnings propelled by acquisitions
    (read more on Domain Name Wire)
  • DomainSherpa Review – Sept 2: RX.com, Hi.Club, BroadLogic.com
    (read more on DomainSherpa)
  • Uniregistry weekly sales led by sadhu.com
    (read more on TLDInvestors)
  • New Verisign Report: Total Domain Registrations Jumped 4.4% Since Last Year Led by .Coms and Surging ccTLDs
    (read more on DNJournal)
  • Ethereum name service launches .ETH domains auction, and domains like usfederalgovernment.eth are priced at $1.8M
    (read more on my blog)
  • CentralNic 2019 half year results
    (read more on OnlineDomain.com)
  • A third of the top TLDs are shrinking
    (read more on DomainIncite)
  • It cost $480,843 to defend IMI.com
    (read more on Domain Name Wire)

What impact would a recession have on the domain name industry and what are you doing to prepare?

2019 Recession

I was talking with someone earlier this week and they asked me a question that I haven’t thought about much – “What impact would a recession have on the domain name industry?”

I couldn’t answer the question so I told the person I would think about it and maybe write a post with my thoughts and pose the question to my readers as well…and yup, this is that post. So here’s what I’ve been thinking over the last few days.

A recession will impact the domain industry but in a somewhat counter-balanced way, i.e. in some ways it will help the industry, in other ways it will hurt it. Confused yet? Let me explain what I’m thinking a bit more.

One of the major things that happens during a recession is that people spend less money. So at first you might think, okay so budgets will drop for domain names then…yes and no. Domain names offer huge marketing benefits for B2C companies often saving them a small fortune in marketing costs. Here’s an example.

Suppose I run a company that sells gift baskets, and I currently spend $100,000/month on marketing running ads on places like Google, Facebook, and Instagram. I need to drive traffic to my website in order to make money so online marketing is a must. Now the recession hits and I need to cut my ad budget in half. Buying a domain name like GiftBaskets.com for say $400,000 or so could still provide me with a steady stream of traffic that would cost me 10x the price. I’ll still spend money on online advertising but only $200,000 a year.

In the scenario I outlined above my marketing budget drops from $1.2M a year to $600,000 a year, but because I bought a premium domain, I might actually get the same or more business than I would have spending twice as much. The next year, well I already paid for the domain so all the benefit of the domain I now get essentially for free, less the $10 renewal fee.

Of course, like most things in life there’s a big caveat here. Not all companies realize the impact a good domain name can have on their business – this is the counter-balance. While some companies will realize that domains can give them a huge edge, others won’t, and for them, a reduction in budget could mean holding off on buying that shiny new domain name.

One way I can see domain investors preparing for a recession is shifting focus away from higher-priced names and instead looking at domains that they could sell in the sub-$5,000 range and still take a nice healthy profit. For me, I’m personally going to focus almost exclusively on two-word .COMs in the $150 – $350 range for a while. Domains like these I could sell for $1,500 – $3,500 and lock in a 10x profit vs. buying in the $1,000+ range where I need to sell for $10,000 or more to maintain the same profit margin.

I’m also building up a larger cash position, so when I sell a domain, I’m putting less into new investments and keeping more money in my business bank account. I don’t have a mortgage or a car payment, no credit card debt or student loans, I live below my means so if and when a recession hits I’m not planning on making any major life changes. I think building up a larger cash position could be handy if/when a recession hits because if less domain investors are bidding on names, it could be a great time to buy, so if you have some extra cash you could actually get some great deals while everyone else is panicking…or at least it’s a thought.

There’s no right answer here, but there certainly are things all of us can do to prepare for what’s ahead. So now I’ll pass the mic to you, what do you think? What impact would a recession have on the domain industry and are you doing anything to prepare?

Josh ran a pretty interesting poll on Twitter about how much domain investors pay for domains

Domain Investor Josh Reason recently ran a poll asking people – what is the most you’ve ever paid for a domain name? Here’s the results:

Domain Investor Poll

Since I voted I guess my vote won’t be anonymous but that’s okay. While I typically buy domains for under $1,000 I have paid more than $5,000 for domain names and probably will here or there in the future…but it’s not a regular thing for me.

Okay, back to the poll – 63% of people have paid less than $5,000 for a domain name, and as Josh pointed out, most people are looking to get five, six, and seven figures for their domains.

Domain Investor Expectations

As I mentioned yesterday, people are trying to sell .ETH domains for $1.8M that they paid way less than $5,000 for as we speak. While some domain investors are grounded in reality and sell domains for realistic prices (like Mark Levine) there are plenty of people out there complaining that none of their names ever sell, and while they might have decent names, they’re looking for way too much for them.

If you buy a domain for $500, sure, selling it for $1,500 or $3,500 could be very possible…but expecting to sell that $500 domain for $50,000 or $150,000 isn’t very realistic.

I’m glad Josh ran this poll, it was interesting to see the results. It also brings up an interesting question – what multiple your purchase price should you expect to get for a domain? I aim for 10x or more, so if I buy a domain for $250, I’m more than happy to sell it for $2,500.

Everyone has a different multiple in mind, what’s yours?

Ethereum name service launches .ETH domains auction, and domains like usfederalgovernment.eth are priced at $1.8M

The Ethereum name service has a pretty logical idea. Rather than sending and receiving money at long meaningless addresses like this:

they are promoting the .ETH domain extension. It’s a lot like the move from IP addresses to domain names. Just like domain names helped with adoption of the world wide web, they could now help with the adoption of more consumer use of the Ethereum blockchain.

Here’s the details:

Over the weekend, the Ethereum Name Service launched an auction for short .eth domain names on the OpenSea decentralized marketplace. All three to six-character-long domain names that were not among the 194 approved during the reservation period that closed in mid-August are now up for grabs, and can be bid upon using ETH cryptocurrency. 

The idea, if it catches on, is to help facilitate greater consumer adoption by enabling the use of easily recognizable names—such as “satoshi.eth” (currently going for 1,500 ETH at auction)—to receive tokens and perform transactions on the Ethereum blockchain.

(Source – Decrypt.co)

Of course, there’s really nothing stopping anyone from using any domain name in any extension from doing the same thing but .ETH certainly seems like the most logical choice. At the same time, the prices for these domains seem pretty steep – okay in some cases they’re absolutely ridiculous, like usfederalgovernment.eth which is priced at over $1.8M, or antifascistaction.eth…also priced over $1.8M.

While I’m guessing some of these names will sell, I think a lot of them are wildly overpriced. All that being said, I can see .ETH taking off, it does make sense – if I’m going to send money to someone having a word or even a string of easy to remember numbers is a heck of a lot easier than a crazy long string of letters and numbers.

What do you think? I want to hear from you, comment and let your voice be heard!