The reality of investing in domain names, rewards and risks coexist!
DomainCn
Domain name investing is often portrayed as a way to make quick and easy money, but the reality is very different. Countless books, videos, and articles highlight anecdotes of domain names sold for high prices, promising readers an easy path to profitability. However, many in the industry understand that most domain names either take a long time to sell or may never sell.
1. Misleading expectations
Every day, we hear about success stories about domain name sales, including some names that don't look attractive at first glance. However, in reality, most domain names fail to sell. According to estimates, there are about 40-50 million domain names actively sold on the market. NameBio has recorded about 8,660 sales of more than $1,000 in the past year, an average of only 24 retail sales per day. If only 5% of sales are reported, this means that the total number of retail sales per day is only 480. With such a large inventory, the probability of any particular domain name being sold on a given day is about one in 100,000, especially for those domains that do not meet the average standards.
2. Survivorship bias
Most successful sellers spend years perfecting their strategies before achieving stable sales. New investors are often influenced by survivorship bias, seeing only success stories and ignoring the countless failures behind them. It takes many domain owners years to get a return on their initial investment.
3. Don't quit your job
People who aspire to invest in domain names full-time should consider this idea carefully. Even with a moderately sized portfolio, sales can be volatile. The risks of relying on domain income as a primary source of income are significant, especially in the early stages. Working elsewhere can put you in a stronger position in negotiations and reduce the financial pressure of selling a domain.
4. Consider the risks
Before investing, ask yourself some key questions:
-Is this money enough for me to live?
-Am I dependent on a quick sale to get approval?
-Do I understand the probability that this domain will sell within the first year?
-Do I have any reservations about this name?
-Have I researched this potential acquisition?
These questions can help you better evaluate investment decisions and recognize the potential risks and rewards.
Domaincn.com Committed to providing fair and transparent reports. This article aims to provide accurate and timely information, but should not be construed as financial or investment advice. Due to the rapidly changing market conditions, we recommend that you verify the information yourself and consult a professional before making any decisions based on this information.