Domain Name Investments IDNX – A Healthy Stable Market

I have been keeping a close eye on the domain name market for quite some time now.  It’s really nice to see that domain names are a consistent way to make money.In my opinion, Domain names continue to yield the highest amounts of profits. They blow away what your traditional stock market can do in regards to flipping your cash into more cash. I keep a close eye on the domain price index & other financial factors I believe contribute to the domain name market overall. For instance, I blend in comparisons of the top search engines & web companies into my research.

What I have noticed is that recently, domain name sales have been higher than usual. There was information released by SEDO showing a 3.1% fall for NASDAQ 100, 2.5% fall for Apple, 0.4% fall for Google while the domain market has experienced close to 22% growth over the past six months. The domain market continues to grow at this outstanding rate.  The growth is much more when you weigh in private sales that are not published to the public.

The IDNX (Internet Domain Name Index) & SEDO are closely keeping an eye on comparing domain prices to the NASDAQ 100 index. Their core comparisons establish domain investments are closely tied to the economy. In my research, I am seeing the overall picture for domain names to continue to become more valuable assets & gain higher sales prices.  If you compare domain names to the stock market on a personal portfolio level – I can prove how the domain name portfolio can outperform a traditional style stock portfolio.

Let’s start with a $200 example. Loosely figuring this scenario, let’s take a look at what we have to play with. I take the $200 & I split it in half. I take $100 & I invest it in the traditional stock market. I take the other $100 & I register up to 10 domain names to complete my 2nd portfolio.

My assumptions are that if I can double my $100 in 1 year, I will be happy. Usually the profits made from the stock market are much lower & I risk losing my investment entirely. My assumption on the domain portfolio is that I will pay $10 per domain & they are of mediocre quality. The domains have end user potential & I have completed up to one hour of resell research per domain.

If my stocks portfolio reaches $200 in one year, I would consider myself very lucky. To most stock investors, that is worth it & they will want to invest larger amounts of money. The domain portfolio of 10 domains has a $5,000 potential in one year. I came up with $5,000 calculating $500 per domain & 10 domains total. You may get more than $5,000, you may get less or even $0. This is where the domain name quality will matter most. But even if you sell one domain @ $500 & lose the other 9 domains – It has clearly outperformed the regular stock market.

I understand that most domain name investors are making out very well. While domain names as investments is rather new to most, the pioneers are making a killing. Most domainers I frequent are from the domain name forums or they have domain blogs. Most do not invest too heavily into the domain name market. With domain names, there are a few rules to keep in mind to become very successful.

1.) Quality over quantity. I would rather have a small handful of very good domains versus hundreds of junk domains that are worthless.

2.) Generic, brandable & service or product oriented domains yield the highest amount of profits. Ask yourself if the domain can be put to use. If so, who can use it & how?

3.) Don’t cut yourself short on the price by leaving money on the table. Do research on the buyer to feel out their budget & push the envelope. You’d be surprised how valuable your name might be to someone who needs it.

I would like to emphasize on the pricing. I usually go higher than expected on my pricing. This has yielded two sales this year around the $800 mark. Originally I was asking $60 per domain name & I decided to reprice my domains on SEDO where the sales took place. Sometimes the higher price tag makes the same more legitimate & encourages a buyer to buy the domain name. A domainer closed a private sale seven days ago at $6,800. He purchased the domain months ago on the drop for registration fee of approx $8.

The domain name market is showing dips that indicate the upcoming months will show a steady increase in profitability. Like a roller coaster, April showed a 2% fall for IDNX which should spike back up these upcoming months. You can track the IDNX price index on the Bloomberg & Thomson Reuters financial data platforms.

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Comments »

 
  • gary dell says:

    While I do prefer investing in domains rather than stocks, it is important mind domaining investing does take more labor than stock investing. Granted stock trading takes more activity than stock investing.

  • The average Joe who wants a domain for their personal blog is going to view any price over $50 as unreasonable. Corporate America hasn’t quite caught on to how miniscule a domain purchase is relative to other forms of sales and marketing spend, but how much do even SMBs spend annually on Google Adwords, print advertising, a sales/marketing director/VP, sales-related travel expenses, billboards, radio ads, etc? $1500 is peanuts in comparison if the domain has the potential to create brand recognition. If the domain comes with traffic or any SEO benefit, the potential value is even greater.

  • admin says:

    Gary, I agree & the more labor put in, the more profits are to be gained. I mention in my example how the scenario could yield $500 or the full $5,000 from the $100 domain portfolio. The more labor put in, the better the results.

  • admin says:

    Leonard, great comment. Corporate-America has a bottomless budget to advertise via domain names & they are progressively catching on. The issue comes where corporate America trademarks their brands & the domains they use are specific to their trademarks. Domain investors will mostly benefit from domain names that are not trademarked yet generic enough to attract interest. I mention doing research on your buyer before presenting a price because this is crucial to maximizing your profits on the domain sale. I agree that SMB’s (Small Medium Businesses) continue to lack the proper domain(s) yet have the budgets to upgrade their web presence. The sky is the limit depending on the domain quality & interest to determine it’s liquidity.

 

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>