Why are people attracted to the domain name industry?

First question people ask me is “what do you mean investing in domain names?”, the next thing they ask, ‘Why do you invest in domain names?”. Domaining or Domainers didn’t exist in the eyes of a lot of people before, it used to be a hidden topic which only deep internet savvy people who’ll know about this opportunity. Today, it has changed a lot, attracting tons of people (including me) into the industry and hoping that one (or more) of our domain names would sell at a very very high price. Here are the reasons why it has attracted a lot of people to enter this industry:

1. Land of Opportunity

Just when we all thought that most .COM’s or TLD (Top Level Domain Names) were gone, here comes Country Code Top Level Domain Names (CCTLD). It still has lots of open opportunities for people to own their own premium domain names (3-4-5 character domain names and usually is one word) or Generic keyword domain names. If you do have money to invest, you could buy generic or even premium domain names and develop or flip it to earn more money.

 

2. Exploration

 

Looking for the right domain name, isn’t easy but it requires really hard work. However, it is also exciting as you feel like you’re in a treasure hunt game, where what you could potentially find could be worth thousands or millions to others. You can either research deeply into a topic and find related domain names for it (through registering yourself or buying it straight from the owner or auctions), or research through domain names that have expired and potentially see a great domain name left to expire (one man’s trash is another man’s treasure).

 

 

3. Value of a Domain Name

 

 

The most blinding and attractive part of a domain name is the value that it currently has. Going back to a few years before, Domain names were only sold at $30+ (for a .com). Most of those .com has now sold for millions, like how sex.com sold for $12 million. Most Domainers hold on to their precious premium domain names in the long run and wait for that big offer to come by. It’s recommended to do so, as domain names (in general) appreciate in value. A value of a domain name is best appraised by professionals (like Sedo or Moniker), but if you’re looking for a free valuation, either you try website value calculators (I’ve written quite a few of them here) or join domain name forums (DNForums.com or CCTLDS.com) and try to ask advice from fellow expert domainers about it.

 

4. Profit from Development

 

While waiting for their domain names to mature in value, domain names are usually developed to earn profit from it. Developing a domain name is a very exciting process (for me) as you could visualize what your website could do and how much you could potentially earn from it. As popular domainers would say, traffic is directly proportional to revenues, so the higher the traffic is to your website, the higher the revenues become. The goal is to first cover the renewal and web hosting costs and profit while you’re at it. And when domain names appreciate, then sell when the price is right.