For almost 2 decades I invested in domains and the ‘digital real estate market’. But since last year, I had enough of spending my time and resources on it.
It’s a Saturday night and I almost forgot to write up my daily blog post. But this topic has been burning inside my head for a long time.
- As it stands, I own about 11387 domains. More than I thought
- My renewal fees per year are about 180K USD
- My biggest domain sale was 300K for one with a hold time of 6.5 years
- I hold primarily .coms and 5% of the entire portfolio are different extensions
- I am tired of it
Why I Want To Quit
See, when I started it was seen as true business. Lesser of a glorified side hustle where domains were overvalued. It was a different game back then.
The .com market will still always rule over any other extensions but back then registrars were not overcrowded with hundreds of new extensions that diluted the entire market.
It used to be a lot easier when holding .coms and selling em for a multiple back then over today, when new gens will pick whatever extension because it’s dirt cheap.
More and more people care less about owning the .com than a decade ago. More and more people settle for less and the sales process gets so much more difficult.
If I had to pick today, I would only bet on:
Anything else means not enough for me to invest or acquire from an investor perspective.
Since we run out of 3-5-6 letter .com domains and are much harder to grab at a reasonable price (under 100K) I feel that I had my time and I am going to make room for those new-gen domain flippers that make it look that easy.
The problem is, just like any other valid business model that turned into a bottom-chasing model like dropshipping, I would never recommend it anymore to anyone. Unless you’re well-funded and can outswim the sharks in this industry.
Back then I had less competition. Today there is just too much competition with lesser .coms available and way too many fucking new extensions.
Domain Parking Is Not What It Used To Be
When I tell people I pay almost 200 grand a year in renewal fees they cannot phantom that. And yet, that is true. What they don’t know is that I hedge my renewal fees with CPC ads on parked domains and use platforms like Bodis to flatten out the renewal fees.
Except, in 2023, I took a loss of 40K or so and I saw CPC decline over the years. I was already surprised I could go breakeven for YEARS without using actual out-of-pocket money to fund the renewals. This was another sign for me to get the fuck out of domain investing.
Simply because I would spend way too many human resources and my own time to find a new and better model.
There used to be less toxicity amongst domain investors. Nowadays, it’s polluted with people that can barely piss straight or are ripe for a straitjacket. The level of toxicity reminds me of those crypto groups on TradingView or Telegram where they all believe they know it better and cannot accept the valuations of domains others give.
One of my team members who handles my domain portfolio told me that it’s getting too much to handle and this was also a sign for them and for me that we can spend our time and resources on something better or new.
I am extremely bearish on the domain market right now. Because it turned a lot more into a fest of speculation than making data driven decisions. We are seeing so many hypertrends flying by left and right that it’s too hard to keep track for.
I feel that we are entering a bearish cycle after OpenAI and markets need to cool down. Just like traditional Real Estate, I see domain investing going into traditional 7-9 economic cycles with a current downtrend of overall sales.
I am going to blame the new-gen TLD extensions that pop up fucking everywhere. It’s like they want to devalue the entire market on purpose just for the sake of buying premiums at a lower price strike in 10 years from now.
Fuck that, I am not going to wait for it.
My Net Returns Are Lesser
Because the sales process has changed over the years and the market flooded with too many half-baked domain investors, my returns became a lot less. And I am unable to adapt to the newer approaches.
Domain investing is very much 24/7 sales. Not just park your domains on Dan.com or other marketplaces and call it a day. Nowadays, everyone is making attempts to sell their garbage domains to anyone and I receive daily proposals about domain XYZ for an xxx or xxxx figures that aren’t worth anything other than their reg fees.
I see more and more people liquidate their portfolios because they are on the losing end of the stick.
Whenever we cold outreach, we got more responses that they could get the same name with a diff extensions for 1/10th of the price. The difference is that mine is .com theirs is not and yet they go for the minor version.
I am almost forced into a position to sell domains at a lower price to ensure myself a high enough STR (Sell Through Rate) but at the expense of earning less than the projected asset.
Whilst I am okay with that, I feel the human resources, time and headaches are simply diminishing my returns.
I consider myself a mini-whale in domain investing. And probably I am. But I just cannot find any good reason anymore that can justify this amount of effort when the stakes are getting higher and higher.
180K per year is not nothing. And the more I looked into it, the more I decided that I am leaving the domain investing scene within the next 2 year.
I will screw down my portfolio from 11K+ domains to 2K or so. And go more from domain investor to domain developer.
I feel happy with this decision and I had a good run for 2 decades. I am glad I went into this space in the early 2000s’ when everything was less polluted and there was no toxicity amongst this particular group.
Rather spend 180K on acquisitions per year than domains, simply because I can control the narrative a lot more than just speculating on a new trend.
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