Domain Investment - The-Pit-falls

Discussion in 'The Lounge' started by CyberKing, Sep 17, 2018.

  1. CyberKing

    CyberKing India Domain Investor

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    I see a lot of names for sale here on this forum which are down right not even worth their reg fees divided by 100 and I wonder what some of these Registrants are thinking (or not)!

    Do some of you see folks throwing away their hard earned money on such names....who would even want to buy these names in the first place?

    Only the domain registrar and the registry are smiling all the way to the bank thanks to such blind (faith) registrations!

    So some simple "FreeAdvice.com" for those who will consider listening -
    • Choose a premium extension - stick to COM or IN
    • Register "highly brandable names - NOT BRAND NAMES" - unless you can take on the legal challenge
    • Register a name someone will want (target hot sectors) - this does not mean CRYPTO-WHATEVER.XXX will sell
    • Adding a Z at the end or hyphen DOES NOT WORK
    • Reversing a phrase is also a waste - like loanbank versus bankloan
    • Not all LLLs for example are made equal - 95+% of them do not sell over 200 USD
    Domain Investing is a LONG GAME...In most cases decades have passed and even then several names are still in the Bank (meaning I pay for renewal year after year hoping it ages like wine) It takes a rare miracle or alignment of stars for you to have a name someone covets so bad they will pay a premium for it. 90% luck 10% intellect+work.

    Now flipping is a whole different sector within the domain industry - that is mostly a zero sum game and I would also not encourage it!

    Lastly I surely hope some of you on this forum are not putting your Parents hard earned money to work.

    PS: I squarely blame local domain related conferences which over the last 4-5 years have spread the notion that "you can get rich quick"....with other believers spreading their one off sale stories.and a whole host of youth have been influenced to go reg names.
     
    Last edited: Sep 19, 2018
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  2. Jeff
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    Jeff Canada Administrator Staff Member

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    Lots of wisdom in your post - thanks!
     
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  3. JackD
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    JackD United States INForum.in Supporter

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    Pricing also has a lot to do with your sales. I have recently sold 1 .com, 1 .io, 1 .in and 5 .co but all were reasonably priced in the mid $xxx and very much willing to negotiate. Just because you registered doesn't mean it's worth $5000
     
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  4. CyberKing

    CyberKing India Domain Investor

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    Pricing IMO is a tricky subject and very subjective....experts suggest comparable be referenced - just like in real estate when making an offer.However I believe there is that point....when a buyer walks away, if they have the will.It is all a matter of how much one can live without your specific name...find alternatives...its all perception of the buyer a burning desire perhaps LOL

    I never sell to another person in the industry if I can avoid it...hence never flip...most of mine are investments for the right end user - for which I am willing to wait out forever.

    Uber at some point had to have Uber.com - simply a must! Their brand value far exceeded the investment. Just an example.

    My record dot IN sale earlier this year.... another person who reg it would have sold it for USD 200 or less - perceived value, It was 4-5 years of waiting (torture) for the buyer...who decided I was such a heartless person who was not going to come down from the hilltop that they may as well pay as demanded... LOL

    In the last week I got several offers on dot INs for USD 500 my minimum offer price and I simply refused to sell it...I am not flipping and do not need the cash flow. I think the offers were from end users (but ones without deep pockets - a startup wanting a food delivery name, another for a online service etc.)

    Basic market principle also applies, supply and demand. If there are a ton of names for sale at USD 25 to USD 250 range end users think that USD 500 is too much obviously...well that's misplaced perception.

    I refuse to sell good names for less than USD 10K thats just my position.
     
    Last edited: Sep 18, 2018
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  5. LLL.in King

    LLL.in King United States Well-Known Member

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    I generally agree that pricing is an dicy issue. "reasonably priced" is good for today for avg/ok names, but it can lead to regret in the future for good/premium names. There are many historical .in sales that looked good at the time the sale happened, but from today look back, they were actually bad regretful sales. No is still a good answer in domain negotiations though. Why? Because even if we go by the "80/20%" rule and assume 20% of your domains will provide 80% of your revenue, that means you have to maximize your few sales in the long term(at the minimum). If you sell too cheap now how will you replace that inventory later?u cant do that easily. I can confidently say .in hasnt "taken off"/gone mainstream yet, so that means there is an even stronger chance current "reasonable" prices are underpriced. But w also need cashflow- delaying sales now means going deeper in the red and more pressure to get out of the deep red. Just hold your "best"names tight because they are a small % of the total supply regged and wont be easy to replace. Even now, drop list names are mostly avg names at best.
     
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  6. LLL.in King

    LLL.in King United States Well-Known Member

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    Overall, i agree with you. You are experienced and understand .in investing. BUT, i have 2 things i have to address:

    Yes, not all LLL.ins are made equal. 95% do not sell over 200 USD because : 1) most arent put up for sale at that price and 2) Even if they were, most of those 95% are worth more than 200USD, but that is about the current going rate for bad LLL.ins(which at least 50% of LLL.ins arent). Your comment seems to conclude "95% of LLL.ins arent worth over 200USD each", which i strongly disagree with. Its hard to find double premium LLL.ins offered below $300 these days, and maybe 30% of all LLL.ins are bad letter combos.

    why would you blame local domain related conferences? they have helped us and .in bring in more participants and i see that as mostly a good thing.I highly doubt domain conferences told attendees they would/could get rich from domain names. Those would be bad conferences. But also, new domainers(conference attendees)buy bad names initially, its part of the learning curve, but that happens in all extensions with early/learner domainers.
     
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  7. CyberKing

    CyberKing India Domain Investor

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    Yes almost three decades of COM ....however IN since 2012-13 only. Lots of learning in last six years or so!

    @LLL.in King , (reaction sounds personal) :) my position on LLL stays...unlike COM LLLs for which a new specialized marketplace opened yesterday, there is no drive to brand especially by large corporates using acronyms or LLL that are words or have easy recall in ccTLDs (unlike the ZAP.in example a rare one I applauded) Even in this category you are speaking domain buyers terms not end users. The Chinese investors caused some of that rise...last 2-3 years ....game over now. However supply demand keeps it floating instead of sinking....IMHO

    Have you gotten feedback or seen what is said in the India Based conferences....I rest my case if you have, Those who know...know what I am talking about..

    We can always agree to disagree.
     
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  8. LLL.in King

    LLL.in King United States Well-Known Member

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    The only thing personal about my reaction is the LLL.ins. I'll defer to myself on that one.:D

    The world doesnt run only on "large corporates". India has over 500K SMBs+ at least 10s of thousands of individuals who want/nened domains. They can/will float LLL.ins. At worst, we hope we can succeed playing the "numbers" game in India.
     
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  9. CyberKing

    CyberKing India Domain Investor

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    Oh no not that 1.3 Billion potential country argument again....some one (founder of Sun Microsystems and later KPCB) once told me when I was running a start up - does your business sell a billion cokes a day to a billion Chinese - then you have a business LOL at 5c a can its still profito_O

    Then there is the INDIC argument internet for the other 500 Million which is why Alexa now works with a few local languages including Hindi and Amazon launched a Hindi website earlier this month....that argument too does not help INs...or IDNs in my view...what a flop show .Bharat was my my....

    After over a decade of existence of our IN identity if this is the penetration....I don't see much changing going forward...apps came and went ....now its AI and VR (we skipped crypto) ....websites and domains are so 1999 ROFL

    To make matters worse we have one of the worst governance and marketing bodies on the planet for domains at the helm....the worst by any yardstick...even Maldovia or Island of Tonga are way better in my view...

    PS - All views are purely personal...
     
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  10. LLL.in King

    LLL.in King United States Well-Known Member

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    The 1.3 billion potential country argument is definitely relevant in the long run. The main issue about is the per capita income/spending power of the population. What else made .cn the huge success it is now? Would .cn be where it is if China had 200M people? The 1.3 billion people point is to say that even if 2-3% of the 1.3 bn people buy domains, we can still do pretty well. Because the founder of sun microsystems said something counter to what i am saying doesnt mean he's right. argument um ad authoritatum.

    I kind of agree with this point, because english is the main international langue of communication, and the internet is mostly for world wide communication and information sharing.

    Its only a decade like u said, but you also said its a long game, and it is! LLL.coms took ~`15 years to blow up. Its not about the length of time IMO. its about the growth in value over that time. Good .ins are still growing 20-40%/year at the investor level. That might not be fantastic, but imo, its solid. Whats the price of holding great .ins for 20 years? no more than $200(exluding acquisition cost). Thats not bad considering you will potentially sell it for $x,xxx to $xx,xxx at the end of that long wait. Money needs time to "work". These next 10 years are going to be different, and we should not be in denial of that. If India is to "leap" economically it needs ecommerce...ecommerce needs domains, so India needs domains. .com are expensive and the good ones are gone, so what else can India rely on? .in is currently used by 24.6%? of websites in India now so its reasonable to assume .in will increase its market share as the # of websites increases.

    Apps are still here and we use them daily. You tech people yell AI and VR but common man doesnt see it in everyday use yet. yes India naively tried to skip cryptos, but it cant. India will eventually accept and use cryptos(main issue is immunity to change).Websites and domains are def so 1999.........and NOW too.

    I agree, but things can and will change in the future. Buy and hold tight until that change comes, the rewards will be worth it. In some aspects, India is changing fast. These are exciting times. All eyes are on India, everyone wants to get in. India is the new gold rush.
     
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  11. CyberKing

    CyberKing India Domain Investor

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    Hope is being able to see that there is light despite all of the darkness.

    Desmond Tutu
     
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  12. doneweb

    doneweb India New Member

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    I always try to price the domain name rightly so that I don't have to renew it. Before renewal comes, the domain should be sold. There are many market places such as Godaddy Auctions, Sedo, Namejet, Flippa, I try to list the domains on all the popular market place. I also do email marketing for those domains that are going to expire within 3 months...
     
  13. LLL.in King

    LLL.in King United States Well-Known Member

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    Your strategy is fine, as long as you also understand that your profit/profit potential will remain limited as long as you rely on short term flipping/selling strategy.