Domain names are an interesting asset. Some people collect them, some build companies around them and some attach one of the biggest recessions to their name. You can make money by flipping them, reselling them and sometimes by just parking them.
Three-letter and four-letter .com domains
I have to admit I was always fascinated by short and old domain names. That’s why, even though I knew the industry was talking about not being able to hand register a four-letter .com domain name, I’ve decided to conduct research around it. No one has done actual proper research on this topic, up to that point. It was back in December 2013 that we used our Whois API to check this. Afterwards, I went ahead and bought a few four-letter .com domains myself. I did it on the aftermarket.
A few years later I sold those domains and learned you can sell them directly (to a potential client), via forum (by advertising on a forum that you have this domain name for sale) and via marketplace. In case you are wondering why you haven’t been able to utilize those routes, one of three things could have happened. You are asking for too much money, the domain name is just not usable or you haven’t tried hard enough.
Short acronym domain names, even without meaning (I am not talking about dogs.com, cats.com, cars.com) like vuif.com, laeq.com or lvcb.com will always have some intrinsic value. Few years ago domain investors from China raised the price with their speculation, and once they were done with it, the price came down. The marketplace always sorts itself out. I can talk a lot about this topic, but I have to proceed with other areas of my experience with domain names.
Why should you care?
I think that three-letter (if you can afford them) and four-letter .com domains are a great store of value. Like the gold and silver. They are good for short-term flipping, and long-term holding. These domains are very liquid, and this recent screenshot from Namebio proves it.
Back in 2006, I co-founded a small web hosting business. And with it, we also provided domain registration services. It was a very tightly bootstrapped business, and my partner and I were able to grow it to about 500 clients before selling it to a larger web hosting company. Over the course of those 5 years, and later from a different company, I was working with and using several different domain registrars. Tucows, GoDaddy, Directi, Uniregistry, NameBright to name a few.
Coincidently, I wrote an interesting blog post, followed by a video on why I choose the domain registrars I work with now. In case you are looking for a good place to register your domain names, you should definitely check it out.
Why should you care?
Well, it’s very simple. In case you have more than 10 domain names, it becomes a hassle to manage them. Not to mention the cost grows significantly over the years. Any serious domain name or website investor holds more than 50 domain names. Let’s see how that looks on a 10-year example.
50 domain names X 10 years X $11 USD = $5,500
50 domain names X 10 years X $8.03 = $4,015
If you think that $1,485 is not that much money, I’ll give you my bank details and you can send them my way.
Domain data and domain monitoring
This part of my journey and experience is probably the most complex of the three. It’s strictly B2B (more so, on the enterprise side of the B2B) and partly requires coding skills. Partly because in order to get domain data you need to operate an API which requires coding skills. And then domain monitoring comes out of that part. Essentially, we are using domain data for domain monitoring. Some of my clients are using domain data in other ways (cybersecurity, SEO, reputation management, etc). How exactly do I use domain data, and monitor my domains and websites?
I started buying websites a couple of years ago and fell in love immediately. I was looking at the SaaS tool that we built (Webmaster.Ninja) and realized that with a few minor adjustments this tool could become very helpful. So, with this tool, we are accessing the data that’s publicly available. In case you were wondering how exactly this looks, I would rather not share a screenshot because we are in the middle of redesigning our dashboard and building a version 2.0.
Why should you care?
In case you need reminding, it’s a major blunder if you forget to renew your domain name. With proper data and tools, this is easily preventable. I will be the first to advise to renew your domain name for the next 10 years but looks like almost no one does that.
Not only that but this way it is much easier to track your portfolio! If like many, you are using several domain registrars and web hosting providers, it becomes hard to keep track of everything. And what about problems like email blacklists, website downtime, expired SSL certificates? Well, our monitoring tool does all that as well.
So there you have it. A short reflection on my experience with domain names, and why I think you should care. I hope this helps, and remember, you have to act on these things. If you let your domain name expires, and you lose it after all cycles have passed through, don’t contact me. It will be too late.
- Forgetting which email is listed as the owner
- Indecisiveness on whether to renew the domain name or not
- Ignoring the notification email from the registrar
- Missing out (due to the spam box or other reasons) on the registrar notification email
- Person that was responsible (and his email) left the company
- Domain owner doesn’t control the email listed as the owner
- Domain owner forgets completely that he owns the domain (could be he/she registered with a registrar he/she doesn’t usually use)
- Owner forgot to renew the domain where his email was on (the email can’t work without the original domain name)
- Owner forgets to set up email forwarding from “email on WHOIS” to “email he/she reads”
- Domain owner doesn’t have an “auto-renew” option on the domain name
- Credit card on file is expired, so the “auto-renew” never takes place
Another great way of decreasing the chances of domain expiration is by registering the domain name for the next ten years. If you are serious about your business $100 shouldn’t pose a great expense, and the risk is reduced significantly in the next 10 years.
Recently I mentioned Ray Dalio’s “All weather investing strategy”. In case you haven’t heard of him or his strategies, don’t worry, neither have I until couple years ago. But that doesn’t mean we can’t learn from the guy whose company manages about $150 billion in global investments for approximately 350 of the largest and most sophisticated institutional clients.
So, here’s what the all weather investing strategy says about a simplified diversified portfolio. Last week I shared a video where I read a book about gold.
According to Ray Dalio, gold should be a 7.5% part of your portfolio. You know what else should find 7.5% in your portfolio? Commodities! Some of you may be asking, OK, what’s a (good) commodity? I, like many, drink coffee every day. So coffee is one commodity. You need fuel to drive your car, like many, so oil is another commodity.
Coffee and oil have been around for a while, and so have most of other commodities, however in the past 20 years, world has changed a lot, and Internet became ubiquitous. Also when it comes to commodities, it’s good to find those where you have some industry knowledge and experience. According to Investopedia, domain names are a hot commodity!
With people like Paul Stahura and Frank Schilling leading the new domain extension program, you don’t have to worry about domain names dropping out of this category for at least another decade. My recommendation for good domain names, buy and hold. In 10, 20 or 30 years, some of those will be worth a fortune.
I am putting money where my mouth is, so recently I started building my domain portfolio. Should have done it earlier, but like many, I feel into the trap of “it’s too late”. This is me building my domain portfolio http://duskic.com/domains
Back in 2012 I though it would be a good idea to invest in old and short domain names. I bought 3 of them (four letter .com domains) for about $2000. It was a lot of money for me at the time, but I thought it was a wise investment. To my great disappointment, this isn’t one of those stories where the post ends with thousands of dollars in profit. I am just starting! But if you stick long enough, who knows! As for the 3 domains I bought in 2012 I was able to liquidate really quickly in early 2014 when I needed the cash! Although I didn’t make a ton of money, I also didn’t lose money! Which is great if you want to liquidate assets quickly.
Fast forward to today I started building a real domain portfolio. Few things fall into place. We were able to finish the development of several tools at WhoAPI (like WhoAPI domain checker), domain manager and domain monitoring! Second thing that happened was that I fell in love (happens to the best of us) with an amazing illustrator, so I am able to combine spectacular logos as a bundle with a domain name. Thirdly, Michael Cyger launched DNAcademy (affiliate link) where I learned a lot in a very short period of time about domain investing. And last but not least, I have more spending money then prior years, so I decided to invest instead of spending it on toys.
One domain name I mentioned already in one of my recent posts (sslgrid.com) I found with WhoAPI domain checker, but there are some I was able to purchase at various auction sites, and for some I negotiate a discount from other domain investors. Soon I plan to release a website where my entire portfolio will be available, after which I can go into details on every domain.