Domain names sell at various different pricing categories. The range starts from $XX, all the way upto 8 figures. Thus for a person entering into this business, it is important for him/her to know at which level to operate. You should also understand the mindset of a typical domainer operating in that category. This will help you get a better judgment of pricing on domain names as well. Here in this post, I will try to categorize investors based on the price of the domains that they deal with, What type of end-user can you expect from that category? and most importantly, what should be your investment goal?
Beginners: $xx to $xxx range – FLIPPERS Category
In this price range, the aim is to have the highest conversion rate. Domainers who buy domains in expired auctions or hand register names often spend less than $100 per name and try to flip it for $200 to $900 ranges. Most often this type of sale occurs through bulk outbound marketing or also listing domains for sale on platforms like Afternic or Sedo ..etc.
For anyone who is just trying to get his foot in this industry, its the best category to start with. Try to keep conversion rate as high as possible and analyze what type of domains are selling and why are they selling?
Category summary:
- Domain Types: Two keyword.com, GEO domains, newGTLDs, Lower range Liquid domains like 6n.com, 5n.net (Chinese premium)
- Investing Strategy: Fast flipping, High selling rate is the goal.
- Probable End-users : Local Businesses, Small industries, Other domainers who operate at higher prices.
- Holding Period: Ideally it should be as low as possible, sometimes even 1 day to a maximum of 3 to 6 months.
There is another interesting business model for domainers in this category. They usually bulk buy domain names at times when there are offers like $2 or $3 for a .com registration. Then they list all domains for sale at various platforms for ranges in $XXX or higher depending on the sell rate that they are getting. Even if they sell one domain, it covers the cost of about 100 others. Many big players in the industry like HugeDomains , Mike Mann, Buy Domains ..etc have a similar business model.
It must be noted that these guys have spent enormous time on building a deep understanding of domain names. Hence, you must not think that this approach is quite easy because there is also a possibility of no sale.! (LOL)
Mid Range Investors-cum-Flippers
These are the people who operate in mid range from $x,xxx to $xx,xxx . They can be termed as investors because their point of investing in the domain is to get maximum ROI, time is not a constraint to them.
Domainers operating in this price range are more of the seasoned investors who have learned the art of picking the right names. They are now confident enough to pay 4 figure price for a domain name to resell.
Category summary:
- Domain Types: Short Common phrases, Brandables (4 to 6 letters) , Quality new gTLD domains, Mid range Liquid domains like 4n.com, 4n.net (Chinese premium) also Letter.com domains.
- Investing Strategy: Hold for few months to years. Highest ROI is the aim. Waiting for the right buyer.
- Probable End-users : Highly profitable businesses, Funded Startups, Supporting domain for Large MNC ..etc.
- Holding Period: Anywhere from 6 months to about 2 years ( Rough estimate )
Highest Tier investors: The Millionaire’s Club
The most elite domains are the ones those sell for more than 6 figures. This is what every domainer dreams of. But this ain’t a regular affair and is mostly the result of years of hardwork ( assuming you are not a son of a king ?) .
This is the category of highest patience and you are expected to have a lot of inquiries but rarely a real serious one!
Category summary:
- Domain Types: One word domains (Dictionary words that are famous) in .com , Very common short brand names, the Highest range of Liquid domains like 2n.com, 3n.com , 2L.com 2n.net ..etc. ( where n= number , l = letter)
- Investing Strategy: To get the domains at below or slightly below market price and just hold.
- Probable End-users : Big Multi-National Companies, Highly funded startups. Companies that are Public ..etc.
- Holding Period: Ideally it should be as low as possible, sometimes even 1 day to a maximum of 3 to 6 months.
I hope this article will help you get a rough estimate of domain name market, How professional domain investors operate? and more.
Let me know in the comments below, What type of domainer are you? ?
