The Pitfalls of Domain Speculation
Like many other kinds of businesses, domain selling has its own set of risks. Unlike owning stocks in the stock market where you virtually own the stocks forever and ever, having registered domains means you need to shell out cash every year to keep your ownership of that domain. This I think is the biggest downside to this business. The major offset to this risk is that you only need one domain to hit it big to compensate for your losses.
As with most risks, there are ways to mitigate them, things that we can do so that we have some sort of cushion from the potential losses that these risks may lead to. One is pruning. Pruning means we need to carefully keep stock of our owned domains. We need to see which domains are performing (bringing in money) and those that are not. This is like cutting our losses. We maintain those that bring in money to the table and abandon those that do not.
As everyone knows, choosing a domain name is a hit and miss thing. There are no guarantees that what we buy will achieve what we hope for them. Again, there are ways to increase the probability of them making money for us, but there’s never a 100% guarantee that what we buy will end up smelling roses.
Another pitfall that most domain selling noobs falls for is bulk buying. Bulk buying is not bad per se, but bulk buying on a whim is. If we ever hope to have some semblance of success in this business, we need to keep our thinking hats on. Bulk buying for the sake of vastly accumulating a large number of domains can be very painful towards the end, especially during renewal time. This one doesn’t take a lot of experience to process. It only needs some forward thinking.
As online entrepreneurs, we need to really monitor where our money goes. This is to ensure that when we look at our bottomline at the end of the year, we are assured that we have taken into consideration all of our cashflows so we can really say that we are in the black, and not in the red.
To dollars and cents!
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