What is the future for a domainer ?

By: RH

What is the future of a domainer ?

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.

3) UDRP

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.

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Comments

[N]

very good article. I am not sure what I want to do going forward, I don't like the new tlds.

[Carlos Martins]

Well, you are right but you don´t analyze why this is happening, what´s the real source for this fall? As with other markets we need to know why some no meaning domains (some are really pigeon shit according the Rick´s definition), are selling more than dictionary and meaningful words? Why? What´s the role of brokerage services and ranking domain agencies on this? Why do not go deeply and show the role of these servants and body guards that protect their masters on this business as they did with Lehman´s Brothers and very recently with countries´economies mainly in South Europe? What the role of big corporations?
Of course there are people that think this business is so easy to make gold from iron but there are also honest domain investors that simple do not sell because they are ignored and attacked by those yuppies. What to say when we see an India domainer offering bankbroker.co by $400 when reviewing the list of domains sold we see that most of them are worse than bankbroker.co? They sell crap as gold and you do not analyze why and how they do that.
It seems you are doing a job for them such as demotivating domainers to continue when the real domain investors must continue even if they have to lose their portfolio. However if they lose all the others still lose. Someday in the future.

[Northerndough]

Yes, I agree, the game has changed. .coms are more valuable than they have ever been and will continue to appreciate with the biggest screw-up of any industry in recent times brought on by these new extensions.

[Richard Keicher]

My quess is the .com, .net and .org aftermarket will remain flat untill the new extensions come out. At that point .net and .org may dip for a while but I think they will all recover nicely by the end of 2013 after the novelty wears off and reality sets in regarding all the new extensions. The cream will rise to the top. I think the geo extensions like .NYC, .Paris and .Vegas will do well but the rest with few exceptions will not. What google does with the 100+ gTLDS is has applied for could be the game changer. They are already giving away free dot coms and websites at GYBO.com.

[RH]

Thanks for the comments guys.

@Carlos I am not demotivating anyone or working for who you see as The "big" domainers controlling everything. I don't think anyone should be attacked about their names, and there is always opportunity. A small domainer may absolutely know something about a niche or industry that big domainers do not. I was talking about why most got into the game in 2002 to 2009 and how the game has changed.

The analysis to why something sells can be nothing more than someone wanted the name, to great salesmanship to a shadier reason.

Why do you feel BankBroker.co is such a great name ? In the US someone is a stockbroker or even mortgage broker, but bankers usually don't get that moniker. There is really no search volume for the name, not that that's the end all be all.

There is always the brandable vs generic debate. Maybe some dictionary words you see not selling are because a buyer wanted a brandable.

[miki]

Game has changed and Frank has made it more complicated. He was the .com advocate who now is spending a ton of new tlds, I am not sure how to understand what he means anymore.

[Jonathan]

nicely done, not sure what is demotivating about it as Carlos mentioned.

You need to approach domaining like a business, too many hobbyist don't want to do this.

What is a bankbroker ?

[good posts]

I think we should think positively about the domain future and everything will be the way we want. Dot com, org, net, info, tv, me and asia will survive this new coming tlds - competition will put everything in place.

[Max]

Domain name the market has never existed. PERIOD
Domain name industry has never existed. PERIOD
Doesn't exist a MARKET for virtual real estate if doesn't exist investors. PERIOD
A very powerful "lobby" doesn't want that domainers become investors earning money....
Investors exist only if they can rent their properties
Ergo: WITHOUT EXTENDED DOMAIN LEASING PRACTICE EACH SENTENCE SPOKEN OR WRITTEN (OR JUST THOUGHT) IS BULLSHIT

So SUPPORT THE LEASING/FINANCING practice, spread the word, promote it, promote rules to protect renters during the lease period...

NO LEASE NO MARKET