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Managing risk is one of the most boring but also most important topics that a domain investor needs to consider for their portfolio. Like any investment, there are some serious pitfalls that can be avoided or even more upside that can be attained if assets are managed correctly.
Risk can be categorised into those that you can control and those that you can’t. For example, you can choose not to buy a trademark infringing domain but as an individual you have little sway over changes made but governing authorities such as ICANN. One of the reasons why I’ve been recently writing about associations is that they can often help mitigate many of the uncontrollable risks.
For now, let’s focus on a few of the risks that are in a portfolio manager’s control.
Renewal Management
The single biggest issue for managing a domain portfolio profitably is ensuring that you drop and keep the right domains in a timely manner. So what are the risks associated with renewing domains?
For a start you can lose your assets, lose revenue when a registrar switches the nameservers at renewal time to their own or renew domains that shouldn’t really be renewed. If you don’t have your domains completely locked down then I can guarantee that your profitability will be directly impacted.
A number of years ago I had a client come to me to ask ParkLogic to help optimise their domain portfolio and earn more money from the traffic. To be blunt the portfolio was a complete and absolute mess. The registrar that the domains were with was in the process of collapsing and we ended up hacking some perl code to help the client out and preserve the domains.
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