There are quite a few approaches to domains and domaining that domainers take. Its like the stock market or real estate market to a certain extent, everyone has their own strategy and most of them pay well for their proponents. I’ve pretty much seen most of the types and will try and enumerate them to enable you to follow what you’d rather be doing.
The Investor
These are the sharpest of them all. Buy good quality when prices are low, hold long term, sell high. These guys hold onto assets, maybe even develop them, ensure that they’re hot and in demand when the market is totally ripe, then sell them. The advantages of emulating this type is that you can afford to sell 1% of your portfolio each year and still manage to pull in the major bucks. The downside is renewals, unless your portfolio generates enough revenue, this cost needs to be factored in. People like Frank Schilling, Rick Schwartz, Sahar Sarid, Adam Dicker, Michael Goldman and probably most of the other big ticket guys will be found in this group.
The Flipper
These guys live to make a fast buck and sometimes the ‘buck’ can be a hundred thousand dollars or more on great buys. They know exactly which domain they can sell and to whom and for how much. If they can buy domains that they can sell immediately (1hr to 3 months) for higher valuation, they’re very liable to take the deal. This kind can be equated to the floor traders of yore. They’re fast, nimble and never hold large portfolios, in fact some only have the one domain they want to sell, right now, before moving on the next big deal. There is a lot of money to be made this way too, however its short term, here and now. So if you don’t sell, you don’t churn. I’ve seen some huge success stories in this lot too, Derek Giordano and Reece Berg are top of the mind here.
The Developer
Theres one more breed of domainer who makes money by doing something with their properties, hand regs, niche domains and the type. They take the domain, develop it, add content, do seo, market it and voila, eventually these low value domains become decent value properties. So $20 on a domain + $500 developing could easily lead to a sale, a few months down the line, in the $5000 range. Guys who do this have substantial skills in development, seo and promotion, without which this is just not possible. You could outsource development but then that could also kill your profit margins here. Guys who do this with some success include Adrian Allen and Lord Brar.
The Builder
A lot of people build websites on domains for their own selves. They are not looking to sell the sites or even would even with good offers, simply because the sites normally create more opportunities than can be equated into the bottomline as credit. These type of domainers are actually a major credit and can be found among all the types listed above. Top names that come to mind include Justin Allen and Tan Tran.
The Monetizer
These guys are only interested in the traffic revenues. They’re happiest buying domains that get traffic and make money via parking or similar. In fact some of the biggest deals in the past have included portfolios of well known monetizers. Now of course this particular breed has been overrun by big time players with hundreds of millions of dollars invested and go under the guise of ‘media companies’. This is probably the holy grail of domaining, whats better than pointing a domain to an automatic page and let clicks get you revenues? Kevin Ham, Yun Ye, NameMedia, DemandMedia and others fit into this group, as they do elsewhere but a vast majority of their revenues probably come from this.
To read the full article, you can follow the link: http://www.mwzd.com/2008/04/10/the-different-types-of-domainers/
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