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Funny story about just how weird this market can be. I recently tried to buy a domain for a client because the .com was a match for their business name of 35 years, and the current owner had it redirected and had never developed it.
We offered $1,000 and got a nasty disparaging note back that we had no idea how valuable the domain was. So we developed a .org. And we watched over the domain as it approached its expiration date which was only three months away. It dropped and we bought it for $60.
Stuff like that rarely happens in a mature marketplace, but it happens all the time with domains.
Only yesterday I told someone who wants a site they had no chance of their chosen domain. If they really want it, it will have to be a hyphenated dot/something odd style domain.
It was available in .com all one word, as are nearly all the ones I go for.
In the cold light of day it was crystal clear that only maybe one of the ideas had merit, and then only if I defined merit loosely.
So, I stuck the domains on Sedo, priced fairly cheap, thinking they may as well sit there for the year. And sit they did - not surprisingly, they were embarrasingly bad. They are up for renewal next month and I was ready to let them all go.
That was until last week when all of a sudden 3 of them sold!
Now that is a return in one year of about 400% for a stupid middle of the night notion and a bunch of really quite poor domains. It's not bad, you can see why people get involved - domains are cheap, and you only need to sell a very few to make it worthwhile.
To the comment, "If you pay $8 a year to have a domain, all you have to do is make $.03 a day and your are enjoying a profit. Make $.10 a day and you are a hero. Make $.10 a day then sell the domain for $500 and you have found yourself a new job!"
The problem I see with this at $.03 you would be making two dollars that year. That is if you got .03. The domains I am talking about (just random no seo junk) will not generate that amount of revenue unless the owner is clicking the ads themselves. Even if the person does get .03 cents a day is it worth the management of everything to make two bucks. I have twenty bucks in my couch in change I suspect but that does not cause me to get it. Sure a dime a day is a bit better, you could make 36 bucks over the next year. Again though it just seems like such trivial money for the time invested.
And before I go on, we can all argue what typicle CTRs are... lets say 1%. So depending on the type of keyword and bidding (we will just say it is 15 cents). Google gives you 10 cents then for every click. You need 100 ppl to visit this crazy domain name every day throughout the year. That aint going to happen. Again I am not talking about a good keyword from you get from WT.
Selling it for 500 bucks is good - sure. But I bet sells like that are few and far between. Again, domain names are not something I would consider I know a whole lot about..
is it worth the management of everything to make two bucks
I have always made at least .03 a day on average with the domains parked at Sedo. I am not at all big into the domain thing, but any I have I stick 'em up there. It costs nothing, there is no management. In less than 5 mins the domain is registered and on Sedo.
Of course $2 is nothing. But multiply by 1000 and it is $2000 and a thousand domains paid for and looking after themselves. If you sell just 2% of them for, say $500 on average each you have a return of $12,000 for relatively little effort. Every now and again you may hit paydirt with one that makes a lot more.
It isn't as easy as that of course, you need to have a knack for picking good ones, time is spent searching for them and so on, but then you can do better too if you put something on them rather than just parking them.
It would be wrong to say there is no money to be made.
The 400% I mentioned above was not based on buying one domain, but on the 20 stupid ones I bought on that one night.
[edited by: abbeyvet at 3:45 pm (utc) on July 26, 2005]
Most of the domain owners <that park their domains> are hoping to at least cover the cost of owning the domain for a year, while hopefully selling the domain for profit.
[edited by: Webwork at 6:19 pm (utc) on July 26, 2005]
[edit reason] Please avoid reference to specific service providers [/edit]
Please keep discussions, wherever possible, in the most general terms: "domain parking company", "domain brokerage", "domain registrar", "web analytics company", etc.
Sedo is pretty well known, so I allowed the reference to pass at first. Abbeyvet is a most helpful and well informed member, never promotional, so I let it pass. However, one can "look Sedo up" for more details about "What do they do?".
When we start inserting "this is what company X does" into threads I'm afraid we begin to open up the promotional doors. First Sedo then what next? That's my dilema. Follow?
Otherwise, nice work folks! Thanks for all your informative and helpful posts.
It's not immediately intuitive if you've never parked a domain before, but this changes the whole traffic/profitable revenue picture out of all recognition.
In fact, for higher value keywords, less than 1 visitor a day can still be profitable. It's possible to make a profit on a domain with a couple of visitors a month - if 50% click and a click is worth $1 (some are worth a lot more than that) then that's $12 for the year and you've nearly doubled your money. I really can't stress how different parking is from relying on that same traffic to make a profit off a real site - there's no comparison!
The "effort" side of the equation also needs examining in case you're not familiar with domain parking. Basically, to park a domain, you...
A) Register a domain
B) Change the nameservers to match the domain parking service you're using (of course you can set these to be the default for all domains you reg, so in bulk you can skip this step)
C) Add the domain to your parking account (some registrars combine registration and parking so you could theoretically even skip this step)
A, B and C can all be done in bulk so you could register and park a hundred names in the same time it takes you to do one.
Note there's no "D" (make a site; update it) since you're using a pre-prepared parking service and it supplies the pages the visitors see.
So if you have a good eye for the kinds of domains that are likely to get at least a bit of traffic (generic keyphrases if you're white hat, typos of popular sites if you're black hat) then you could be doubling your money or better across a large group of domains with little or no initial effort, and zero ongoing effort.