For many years the domain industry has been a low barrier to entry market with minimal start up costs. You could register a few domains, park them, maybe make a few quick flips turning $7 into $100 or more. Parking may have provided you with a few dollars a month. Domain forums were buzzing with posts and threads and appraisals. The domainer to domainer market was vibrant.
The domain business was seen by some naive newcomers as easy money, its that easy money that attracted them to domaining and they were looking for their pot of gold. All one had to do was read the DN Journal weekly sales charts and go, "That sold for what ? I have better names than that, I am going to be rich." Many did not get rich, they just were collecting names like baseball cards, only difference is you pay for a baseball card once, you don't have to renew each year.
Today there are still domain forums and domain flipping in the domainer to domainer market, but the activity on domain forums is down and the domainer to domainer market is not quite as vibrant.
The game is changing with some of the most attractive qualities that brought in new domainers changing.
1) Its not a minimal start up game anymore
The new tlds are coming and that game is expensive. There will not be minimum start up costs,its becoming a big wallet game. Small to mid sized domainers cannot start their own registry as that cost is too high. The good names in these new tlds will go to auction for most extensions and get bid too high for the average domainer. The registration fees and renewals in most new extensions will be higher than traditional extensions like .com/.net/.org.
2) Parking money down
With parking revenue down for many there is not as much demand from domainers to buy more domains in the domainer to domainer market. There are still some out there but not as many and certainly there is not the liquidity you could find years ago when you could make a post on Namepros or Dn Forum and blow out some inventory at wholesale pricing. I can say in 2004 to 2006 if I wanted to blow out any decent .com name I could find people at least willing to pay wholesale which was still a profit from where I bought it or hand regged it.
Its becoming more and more of a risky industry for domainers. Domains one would never think were at risk have seen some odd decisions in a UDRP. Companies are looking to take a chance at a UDRP if they don't like the price the rightful owner is asking. Of course if someone is squatting a trademark the owner should have the right to get that domain, but there are cases everyday where decisions are being made on domains that don't fit that category. The small to mid sized domainer does not have the resources to deal with this like a big domainer does.
Domaining is still an interesting business with opportunity that can be enjoyable and profitable. The domainer of the future must realize the game has changed, it never was the easy money newcomers thought it was and now that notion should be completely put to bed. It is going to require more capital, more research and being active in selling your domains and standing out in a crowd of 200 million domains and 10,000 new extensions.