The millions of domain names that are bought and sold every year have given rise to an industry of countless domain name investors. Despite their vast numbers, however, most domainers fall into one of four types: Freshmen, Hustlers, Builders and Aristocrats.
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If you have been buying and holding tons of domain names but have yet to consistently turn an annual profit, you just might be a Freshman; if you are a savvy dealer who flips domain names for profit, then you are probably a Hustler. Maybe you are a long-haul kind of domainer, a Builder who works to add value into a select few domains. Lastly, if you are enjoying huge revenues from one-word domain names you registered back in the mid-1990s, then you are definitely an Aristocrat.
Which type of domainer are you?
Type 1 – The Freshman
The “Freshman” might present as a successful domain name investor but, in reality, is usually sinking money into domain name purchases without making a profit. Freshmen have yet to gain the experience required to reliably discern the “good” domain names and to develop sound revenue-generating strategies. Although they might have an impressive number of domains in their portfolios, they are likely not consistently covering the costs of maintaining that portfolio, let alone making a profit. With time, however, these domainers could develop into Hustlers or Builders.
Domainers who are typical of the Freshman type:
- Are usually industry newbies; they know that there is money to be made through dealing in domain names, but have not found a consistent process for turning a profit in the industry.
- Are active on discussion boards and forums, contributing ideas, asking a lot of questions and responding (sometimes inaccurately) to questions from others, trying to put forth an image of authority.
- Buy and hold large numbers of domain names with no plan about what to do with all of them. They feel that holding 1,000, 10,000 or 50,000 domain names is key to their success.
- Are obsessive trend watchers, hoping to get a jump on the next great fad. When they spot what they think is “the next big thing,” they quickly buy up related domain names (e.g. 3D, cloud-based computing) in speculation that one of those domains will be their winning lottery ticket.
- Spend significant effort trying to buy the next million-dollar domain name, and in the process sink themselves into debt. Freshmen spend more money than they make each year buying and maintaining domain names.
- Often rely on a parking strategy to monetize their domain names, despite a downward trend in parking revenue over the last few years.
Type 2 – The Hustler
“Hustlers” are always working and consistently turn a profit. Focused on flipping domain names, they recognize that even in the web-based world of domaining, relationships and connections are critically important. Hustlers make an effort to network with the right people, building relationships that will contribute to their success.
Domainers who are typical of the Hustler type:
- May or may not be new to the world of domain names, but they live by the old adage of “buy low, sell high” to make sure they generate revenue.
- Flip domain names for a living and do not necessarily chase trends or fads.
- Often also broker websites and know how to get a cut of all the transactions they are involved in.
- Are proving themselves in the domain name industry through grit and determination. They are not flash-in-the-pan type of people – they are here to stay.
- Are all about making money and moving product for some profit on a regular basis, rather than pursuing that one domain that will make them instant millionaires.
- Often start flipping domain names as a sideline, eventually becoming proficient and profitable enough to quit their day jobs and deal in domain names full-time.
Type 3 – The Builder
A “Builder” is a domainer who buys specific domain names with the vision of developing them into products, services, brands or e-commerce sites. Builders have very clear ideas or goals in mind when they purchase a domain name, and they prioritize revenue generation in their plans for domain development.
Domainers who are typical of the Builder type:
- Will buy a domain name with a long-term vision to build value into their online property.
- Use domain names as ways to display portfolios, provide information, or sell a product or service.
- Are interested in marketing, developing websites for e-commerce, and lead generation. Focused on developing revenue, they carefully choose each domain name they buy, rather than buying anything in a niche with a shotgun approach.
- Realize that type-in traffic is merely a fraction of the traffic that can be obtained from being in a top-three position of the organic results at a search engine like Google or Bing.
- View a domain as a long-term investment; unlike Hustlers, they typically hold onto their online properties rather than trying to flip them or marketing them for sale.
Type 4 – The Aristocrat
“Aristocrats” are the granddaddies of the domain name industry. These domainers had foresight (and some luck) back when domain registration first was free and then became $100 for a two-year term. Aristocrats jumped on the single-word, generic domain names that now can be virtual money trees.
Domainers who are typical of the Aristocrat type:
- Had the realization years ago that domain names are like real estate: there is only so much oceanfront property, and everyone wants it.
- Took a big risk and bought domain names before they had value, paying upwards of $100 for each domain name – what seemed like a waste of money to most people at the time.
- Make a healthy profit parking single word, generic domain names – without having to do any work to build or flip them.
- Have tens of thousands of domain names in their portfolio, and routinely sell a handful of their premium domains for five, six or seven figures.
- Are among the most respected people in domaining, seen by many as gurus of the industry.
- Have in some cases developed egos that match the size of their domain name portfolios.
What Type of Domainer Are You?
By now you have probably recognized traits of yours and of your domaining colleagues’ among the four types. What type of domainer are you? Are you more than one type? What type do you want to be?
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