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- Apr 15, 2002
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It's extremely difficult to make money in domains compared to the past. There are some exceptions for those who spend vast amounts of time buying and flipping low cost domains but if you are trying to make significant money living off domains and do not want to spend 80-hrs or so a week online for low pay hourly income this business is quite unlikely to be a good one for you.
Exceptions who do very well are people like Michael Mann but the reason for their success is because he and others like him have 100s of 1000s of domains (ranging all the way up to nearly a million domains) so they make tons of money because its a big numbers game which is not necessarily based on domain or portfolio value. Let's assume 1% of the domains sell per year (which I think is possible but possibly even high based on mostly passive sales). If you own say 500,000 names that means you get 5,000 sales a year. Let's also assume the average sale price is say $2,000. That results in an income of $10,000,000 less renewal fees & costs of say $10 a name, adding up to roughly $5,000,000-year expenses, which equals $5,000,000 net profit a year (if my math is right), plus extra income from parking (but with poor PPC payouts that may not be much extra).
However, most members here own a few 100 up to maybe 2,000 names. Using 2,000 as an example but the same percentages and numbers result in just 20 sales adding up to $40,000 sales minus expenses of about $20,000 or profits of $20,000., plus ppc revenue too (but unlikely to be a lot extra). With just 200 domains you would only make about 4k using the same ratios. The only good way to sell more than say 1% a year would be to lower your asking price a lot but the problem then becomes you would need to spend much more time in the business working hard trying to harvest more names and replacing the flipped names with new inventory. Since I have never done any flipping I have also rarely sold names to subsidize income. My names are always price based on intrinsic value and not flipped prices which is why my sales are not often.
All of the above makes it a real tough business and is a reason I am reducing my inventory by about 1,000 names.
Exceptions who do very well are people like Michael Mann but the reason for their success is because he and others like him have 100s of 1000s of domains (ranging all the way up to nearly a million domains) so they make tons of money because its a big numbers game which is not necessarily based on domain or portfolio value. Let's assume 1% of the domains sell per year (which I think is possible but possibly even high based on mostly passive sales). If you own say 500,000 names that means you get 5,000 sales a year. Let's also assume the average sale price is say $2,000. That results in an income of $10,000,000 less renewal fees & costs of say $10 a name, adding up to roughly $5,000,000-year expenses, which equals $5,000,000 net profit a year (if my math is right), plus extra income from parking (but with poor PPC payouts that may not be much extra).
However, most members here own a few 100 up to maybe 2,000 names. Using 2,000 as an example but the same percentages and numbers result in just 20 sales adding up to $40,000 sales minus expenses of about $20,000 or profits of $20,000., plus ppc revenue too (but unlikely to be a lot extra). With just 200 domains you would only make about 4k using the same ratios. The only good way to sell more than say 1% a year would be to lower your asking price a lot but the problem then becomes you would need to spend much more time in the business working hard trying to harvest more names and replacing the flipped names with new inventory. Since I have never done any flipping I have also rarely sold names to subsidize income. My names are always price based on intrinsic value and not flipped prices which is why my sales are not often.
All of the above makes it a real tough business and is a reason I am reducing my inventory by about 1,000 names.
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