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Why Domain Investors Fail

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Jul 29, 2011
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It’s coming up to Easter and for me it’s a mad rush to get everything done prior to a time of reflection. I’m thinking about why it is that during the last 13 years in the industry that I’ve seen so many domain investors fail….here’s my thoughts so far.

Lack of Management
Many domain owners believe that they are able to manage their portfolios just fine. Over time they’ve developed huge spreadsheets which are typically filled with vlookup commands and cross referencing. Domain renewals become an absolute horror as they scrape the data from the different parking companies, pull it into their spreadsheets, make a few formula mistakes and voila! A list of domains that shouldn’t be dropped are dropped.

From experience at least 10-15% of revenue is lost from mismanaging a typical domain portfolio. Inadvertently dropping domains can be catastrophic to the bottom line as domains were literally thousands of dollars go by the wayside.

Trusting the Wrong People
This is an obvious one but nevertheless incredibly important. There are a lot of sharks in the domain industry and they’re after your cash and your domains. Some of them will do almost anything to secure a quick buck at your expense. So whatever you do….watch out!

Before trusting anyone do your due diligence. Spend time getting to know them and then check out their reputation by talking to others in the industry. Reputation is everything in the domain industry. I take it very seriously when someone asks me what I think of another person or organisation. What I’d never want to have happen is for me to recommend someone that does the dirty….those sort of things tend to rebound pretty quickly.

If you have ever have a bad feeling when talking to someone about your domain portfolio then no matter what they say put the brakes on a slow the whole process down until you get comfortable or decide not to proceed.

Lack of Knowledge
There’s lots of information on the Internet about the domain industry. The fact that you’re reading this suggests that you have a desire to learn more about the industry.

So what should you read? I love reading stories about successes….love reading about failures as well. They’re fun but I absolutely love seeing facts and figures! It’s the numbers that get my blood racing with excitement. Find a blog or service that provides numbers that tell the story. It’s easy to make up a good story but it’s often much harder to show numbers that match the persons lips moving.

There’s three reason why I think that investments fail and they actually have very little to do with the actual investment itself. So be careful with your money and even more careful with your assets….you spent some of your children’s inheritance on a few domains. Look after them and get people around you that can truly help you get great results.

I also want to take a minute to wish everyone a happy Easter and may you have a great time with your loved ones.

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