Is 50% of the domaining industry about to be washed away? Probably…

Is 50% of the domaining industry about to be washed away? Rick Schwartz certainly thinks so.

And I agree too. But this has started a year ago. Many of the opportunistic people are long gone by now.

But will domaining go back at the 2013-2014 level or above that or below that? If it goes to that same level then it wouldn’t be too bad. I actually think that would be good.

Except that a few people have made a lot of money, a lot of people have lost some money and we have the New gTLDs now.

Domaining grew too fast and without any planning from ICANN or any of the people and businesses that came suddenly into it. All that while Google and Facebook are trying to create their own version of the internet.

A lot of people came into domaining starting with the New gTLDs and then more people came with the influx of Chinese funds in 2015-2016. Then in the past year people have been leaving the industry.

I think the problems started when most of the Chinese money left the domaining market in 2016. And of course when New gTLD renewals started pressuring domainers without any other source of domaining related income. Also domainers that bought the so called liquid domains (3L, 4L, 3-4-5N) at their peak, have now been left with little options.

New gTLD registries have started failing or are losing money from the beginning. (read here about .build) For others like .shop it will be many many years before they get the money they invested back, if ever. That is not good for the industry.

But domaining and the related services have a long way to go and a bright future.

(You can read some more of my comments at the bottom.)

Here are few of the tweets Rick has sent in the past 3 days:

“Top reported #Domains sales 2017 vs 2016. Next 75 days will tell the story. 2017: … 2016:

“We’re witnessing the BIG SHAKEOUT in #Domaining. A wave of worthless Pigeon Shit #Domains & #Domainers have stunk up entire #Domain market.”

“The #Domains shakeout won’t be an overnight thing. It is an era of RENEWAL SURVIVAL. Most won’t survive. Renewals will bury them. #GTLD”

“There is no #Domainer graveyard. No announcement when they go broke. We just never hear from them again. Make lots of room!! #Domains”

“I have seen WAVES of #Domainers come/go over 22 years. This WAVE is going to be HUGE! 50% of industry or more 2b washed away. #Domains #GTLD”

“We are in the HEART of #Domains SEASON! Every year I can remember October/November has proved to be the month w/ most inquiries and sales.”

“I think #Domains industry is about 2 look like a 2-stage rocket. The #GTLD booster and ALL pigeon shit domains about 2 fall from main ship.”

“Main reason new #Domainers fail? They listen 2 guys w/ very limited success that diminish success of others based on when started. #Domains”

 

“So those that think “Law of Supply and Demand” is any different will be set for rude awakening. #Domains #Startups #marketing #GTLD”

“#Domainers r actively leaving the building! 1 by 1 old time & successful investors in #Domains leaving to do other things. #bitcoin #crypto”

“Now that doesn’t mean they don’t have their portfolios. But they realize it’s not the same game & time can be better spent now. #Domains”

“At this point u should have your portfolios finished & polishing up. If not, u would be better off brokering 3rd party #Domains #bitcoin”

“That means if you have a crappy portfolio, you would be better served saving renewals and follow the steps of #RealEstate brokers. #Domains”

“It’s hard to imagine the emails I get daily with HORRIBLE HARDSHIPS. They want me to buy their #Domains. They are ALL WORTHLESS!! It’s SAD!”

“If you have 1000 #Domains and nobody buys them, DUMP THEM ALL. That’s $100k over 10 years. Go buy ONE REAL DOMAIN for $100k and finance it.”

#Diamonds go up in value. Glass not so much! MOST #Domainers STILL don’t know difference. Discard 1, keep the other. Tin VS GOLD. #Domains”

“When someone asks for your 3 best #Domains and you stutter and stammer and flail, that’s when it’s time to re-examine your portfolio.”

“It’s truly sad/frustrating to see so many waste their $$ on worthless #Domains. I have spent 2 DECADES trying to show why some have value.”

“in 1996 I had 2 sustain my #Domains w/ income made from those domains. That was MY starting point. I had 2 build an ENGINE & I KNEW NOTHING!”

“The decision 2 make certain my #Domains were self-sustaining was single most important decision I made. But I could’nt even FTP! Ground ZERO”

Finally here are Rick Schwartz‘s 4 rules of domaining:

1. Never buy anything other than .com
2. Focus on 2 words. AdjectiveNoun(.)com
3. Aim w/ a RIFLE not SHOTGUN
4. Don’t quit day job

, said replying to one of Rick Schwartz‘s tweets:

“Total decoupling of markets. People so confused. I call it cow eyes. They just stare in disbelief unable 2 take action, Top 1% to the moon!”

I think that he is talking about himself being in that 1%. And he should be as premium domains sell like crazy and for good money.

Some more of my comments:

Domain sales at the higher level seem great in 2017. Or just at least just as good as 2016. There might be a problem (or not!) in the number of smaller sales but we need more concrete stats on that. (We especially need stats from GoDaddy but that has stopped for years now…)

I personally made my highest sale ever in 2017 and also made some of my biggest purchases also. I try to keep that scale at 10 to 1.

People need to be careful about renewals. The main point here is that you should always re-evaluate your portfolio. I dropped many New gTLDs saving a lot of money if future renewals. I also count my dropped domains as savings of 10 times the yearly renewal of each domain. And I am dropping domains all the time. At the moment I drop quite a few more than I am buying. But I sure am buying!

Domainers need a steady cash flow and sales are not always steady. So you need to plan ahead. I try to use parking and development so that most if not all of my domains are sustainable.

It is advisable to renew your 10 or 20 of your best domains for as much years as you can. Especially after a good sale. This is what I do anyway…

I too am getting emails with worthless domains but I have been getting them forever so it is a bit hard to distinguish if people are having a harder time now.

Finally, I have to say something about the domain name blogs. I started before New gTLDs and China, in 2012. Then everyone and his dog started a blog. Now we have less domain name blogs than 2012. Some are trying to bury blogs and forums…

Sold.Domains

About Konstantinos Zournas

Konstantinos studied Computer Engineering and Computer Science in London and lives in Athens, Greece. He works on domain names, websites and software development. Has been online since 1995 & domaining since 2002.

30 comments

  1. ❤ Domaining Forever ❤

  2. Great post!

    Good insights.

  3. The mood and hype go in cycles. We are in a lull now. Throughout the numerous pump and dump cycles, the rules never changed. Rick’s advice holds strong then, now and for the foreseeable future. I acquired some of my best dotcom’s in 2015 and 2016 when they were discounted due to the distractions. Not as many bargains this year as the money is back in dotcom but I’m pretty happy with my portfolio and on auto-pilot.

  4. Learning to drop is just as important as learning what to buy. 🙂

  5. A lot of investors are, frankly, bored with domaining, and realize that crypto has far more upside at this point in time.

    Capital gets allocated to the asset that has the highest potential ROI. And while quality names are still a good investment they won’t come close to the returns you’ll get over next few years from ETHEREUM.

    • Crypto has upside in the sense of paying $5200 for a bitcoin, and selling it for $6K, or watching it fall to $4K, or investing in the hundreds of worthless ICO’s issuing billions of coins in a unregulated manner, only to use the funds for their own personal toys?

      Investing in crypto is such a general statement

      • Completely disagree with you on the potential. And I think that I was (very) specific when I referred to ETHEREUM.

    • I am not sure what bored in business means. Not making money? Not making a lot of money? Not making money as fast as you could make it elsewhere?

      Domaining may be like an investment but not quite like any other one.
      Domains you can actually use and create something. A new business…
      Ethereum could get you broke as well.

  6. Rick is right, if you have a portfolio of pigeon shits all you got is bills … 😀

  7. I am glad everyone is chasing the shiny crypto. Less wholesale domain buyers = less competition which means higher ROI. Thanks!

  8. somebody will always know better

    until you yourself make an unexpected sale
    of stuff people would not evaluate high

    so now you know

  9. I love this one… LOL – Made me laugh out loud. “If you have 1000 #Domains and nobody buys them, DUMP THEM ALL. That’s $100k over 10 years. Go buy ONE REAL DOMAIN for $100k and finance it.”

  10. I do not understand why you all say this.
    Frank Schilling said the future for the newTLDs is very birght.
    I believe him, he is a very nice guy and when he made his own interview he had pictures of family in the background.

  11. I am confused.

    Domain names and cryptocurrency?

    Why are domain names being compared to cryptocurrencies?

    A domain name, correct me if you think I’m wrong, is a brand used to develop an online business or presence.

    How is this accomplished with a cryptocurrency?

    How is investing in domain names related to investing in cryptocurrencies?

    How is investing in domain names related to investing in gold, or commodities or any other form of investing?

    Why is investing in domain names being compared to investing in cryptocurrencies?

    What am I missing here?

    • You are 100% right.
      There is no comparison. We could be talking about gold, oil, stock markets, currencies, or whatever but of course we don’t as domain names are different from all that.
      The only thing I can think of is that people are always looking for the faster way to make money but that is not domaining.
      Sorry but I don’t go around writing posts all the time about how I bought a painting or an antique book or a house in the mountain that will make me rich.
      No one cares. Just like I don’t care about bitcoin. Did you make a lot of money with bitcoin? Great! There are bitcoin blogs and forums for that!
      What you are missing is that some people want the domain name money and/or attention move to bitcoin.

      • well said. i don’t know why crytpocurrency is getting tied to domaining..

      • Glad you guys mentioned this, as I was pondering the connection too. I and associates invest a percentage of income into crypto for potential returns. But that is alongside other investments and while continuing to build digital assets which are the main focus. As Konstantinos says, all of the blogs about Bitcoin, etc. require domains. Each to their own, but I like models which provide the shovels in a Goldrush.

  12. I can reach the whole world with a domain. Or the world can find my business through my domain. $3 billion in drugs used to treat AFib are sold every year. If I am one of those drug makers, I can reach out to all those people naturally through AFib.com.

    Bitcoin is digital monopoly money built on solving ever more complicated math problems. Blockchain is a shared ledger that gets updated in timed intervals – blocks. I get their is technology built in but it is too complicated to ever be used by the general public.

    http://www.investopedia.com/features/crashes/crashes2.asp

  13. I really all that is written is pure truth, the only difference is that they do not know to search the keywords to be a premium domain every day I encounter 100 domain names dot-com I have today in my portfolio 2000 to buy in the end I will sell only the keywords to the advertising agencies and Seo because having the best of my entire career as a Domainer at Uniregistry.com/market does not sell, I send email to the Domainers who are important in this market domain etc and not being domains Pigeon shit are from a single word of 5 to 7 letters what happens that they want cheap and I also value what I have.

    In the end do not leave this market because if you sell every month to live and pay the expenses of home and save etc I would like more but not find a broker who paid me $ 1.2M as Myworld.com (As a keyword “My World” the first Justin Beiber Album 2009)
    I see that for a single word domain 5-letter premium fashion or a 10-letter domain premium digital currency that if they had Rick Schwartz or Frank Shilling etc. already have buyer and sell for more than 1 Million USD but I do not have these names.

    I will sell them through Brokerage.

    The GTLDs are a diamond mine for many domainers and can not complain now the Chinese market has also been a market that if having a Chinese agent sell all secure the important Domainers have sold many millions of USD. From their domain portfolios. I have Historyyuan.com and no one has sent me an offer to buy.

    While Rick Schwartz bought 75 domains and others like him can buy, the market domain will always be alive

    • Lets use your example Historyyuan.com. How would someone benefit from owning it? historydollar.com is not registered, unsurprisingly.

      I assume you registered it,why would someone want it? To write about the history of the yuan? I definitely suggest you look towards the aftermarket for opportunities like auctions, godaddy closeouts, and drops. Remember quality over quantity.

      Friendly guy

      • @Big bird, Thank you for your comment.

        When buying Historyyuan.com many US investors like these to write blog and pots of Chinese market. I know the market if I let it expire for not selling, three months later that domainer who said he would like to sell it for $ 25,000 this is not an imagination is a fact, Godaddy with his TDNAM.

        This is so, I have thought many times to leave this market domains because they see that today and until October 18 in the conference domains are the kings of the cake like any other market that interests them. you do not know if it is of these, I at least not, there are many that I admire and others do not.

        I have the philosophy of if I sell cheap and earn a living to make me a year net 2500000 USD I am already happy, I like to be myself, I know what I want and where I want to be.

        To finish my friend, Historyyuan.com will have your blog, today you give me the idea when this online publish.

        Best

  14. Changing of the guard within the domain Industry, is what is really happening.

  15. This is awesome, there is a saying, “the truth hurts”. I believe it is necessary in order to grow and do better. Many people get started in the domain industry just to end up buying crappy names pay thousands in renewals (making the registrars money) only to then fade away slowly.

    My favorite statement was this one, “When someone asks for your 3 best #Domains and you stutter and stammer and flail, that’s when it’s time to re-examine your portfolio.”

    This is so true and something to keep asking yourself until you are able to answer with confidence knowing you do have at least 3 valuable names.

    – Will

  16. Domaining is Great

    Great reading as usual, thanks Konstantinos.

Leave a Reply

Your email address will not be published. Required fields are marked *