Today we have Part 3 of a special guest article by Robert Kaay from Domain Broker Australia.
I had the pleasure of meeting up again with Robert in Perth – below is a piccie of the two of us.
He is an amazing man who has packed an awful lot into his 40 years on earth. What I love about him most is his true entrepreneurial spirit – plus he seems to have bucketloads of integrity to go along with it.
In this final episode, Robert details his financial outlays in his first year of domaining. As usual, he writes with clarity and a touch of self-deprecating humour.
Hope you enjoy. 🙂
My First Year As A Domainer – Part 3 – by Robert Kaay
As promised, here is my next article breaking down the $47,178 I spent during my first year as a Domainer. Feel free to laugh at my expense as you read along, as I’ll be laughing at myself a lot as I reflect on some of my stupidity.
My two young sons (one is only 4 months old!) and various businesses have demanded my full concentration since my last article, so that’s why this one has taken about a month to write. However, I finally find myself with a day in my South Perth office to catch up on my to-do list, so let’s get this done so I can cross it off. I’m sure this will also see you relieved to stop having to hit the refresh button on your web browser three times per day, hoping to finally see this article pop up on Domainer.
$47,178 in a year on domain names is nothing to sneeze at, in anyone’s budget. Even if you’re sitting on a lazy one million dollars in your bank account, you can do a lot of nice things with $47,000! To spend this amount of money on domain names, instead of doing something else with it, proves one of two things. I’ll get to these two things in a moment.
Firstly, let’s think about all the things you could do with $47,000.
You could put it on your mortgage; own your own home sooner! You could spend it on your wife and family. Hell, you could go and rock the hell out of the Greek Islands with this amount of money, easy! You could buy a new BMW Z4, if that’s your thing. You could give it to your mum so she could go cruising around the world for six months (something I hope to do one day!)
If you become a domainer, you’d better be willing to spend at least this amount of money during your first year or else you don’t really stand a chance of being able to play the game properly. And, at least in my mindset, by spending this amount of money on domain names, hopefully you’ll have secured some gems here and there that will produce a good return in a few years, which will enable you to do all the things I listed above, instead of just one of them.
Like I was saying earlier. If you spend $47,000 in your first year buying domain names, instead of something else, to me, it means one of two things. You have an investment-type personality and believe in investing in something that people are going to want in greater demand in the future, making it a good investment with future high return. Or, you have an addictive/gambling type personality that will see you going bankrupt before having the chance to make any money at all. If you’ve got a gambling-type personality, make sure you’re getting into domaining for the right reasons, instead of just a new version of a casino. You can definitely have a little bit of both personalities, but hopefully you can quickly figure out when to say when and control your addictive/gambling side as you catch the first glimpse of the wave beginning to break. Before it actually smashes you into the rocks onshore. And this analogy rings very true to me. Because that’s exactly what it felt like to me. I felt as though I was blindsided by a massive wave. And although I have now survived my rock-pummelling lesson in domaining, I am about to share my survival story for the sake of new Australian domainers entering this industry. I want to offer them the blue pill and the red pill, The Matrix style. I want trainee-domainers to have the chance I never had.
$47,000 was only really a third of the amount of money I wanted to spend, to really be a part of this game. I have since learned that some people in 1994 had awesome foresight into this industry. Many clever people snapped up names for free at the time. In the early nineties, Australian domain names could be registered for free! Where were you?! Where was I?!
Meanwhile, back to reality, my own first year. I witnessed a lot of names drop that I wished I owned and passed on a lot of names from owners I directly approached because I couldn’t afford the price. However, $47,000 is the amount I got to spend before I was smashed on the rocks, which saw my first year of learning come to a sudden halt.
I’m sure by now, if you’re thinking about jumping into the great big blue ocean of domaining, that you can see it helps if you can swim before you start blindly wading in.
This website is a great place to start for newbies, so you’ve already taken your first good step. Only 999 more to go. Many articles on this site will allow you to jump 20 steps at a time, if you can keep up.
The first year in any business venture is your learning curve. We all pretty much know that. For my first year in domaining, I didn’t read many articles because there weren’t many around in regards to Australian domaining (other than forums) and I certainly couldn’t find any professional domaining sites like this one. I blindly waded in to this industry, fully clothed in a business suit and leather shoes. I took one step after the other into the ocean, headed toward the setting sun, my eyes closed, not sure when the next bunch of waves were going to crash through.
Looking back, I believe I wasted one third of my time and money buying silly names. I spent one third on really good names that I was interested in developing for myself and one third on names that I didn’t really want for myself, but thought were strong enough to sell reasonably quickly and in high demand because they were in the news or on tv or popular words of the moment.
Let me tell you that I’m well into my second year now and I won’t be using this method as my next template. I won’t be buying any more silly names and I won’t be buying any names I think could be in high demand just because they appear in newspapers or on tv.
Most of the silly names I purchased were .net.au’s and hyphen names. I’m not saying they are completely useless (although I know a lot of domainers would say they are!) but I have just figured out the hard way that it’s not worth the time or money investing in them. At least, in this moment in domaining time.
I caught around 20 of these types of names off the drops and spent around $3000 on them. Out of all the names I got, one of them is data-centre.com.au and one of them is domain-broker.com.au and I believe these two are the best names I got from a bad bunch. The rest, I wasted my money and I won’t be buying any more .net.au’s or hyphen-names again. Ever. I was offered $200 for data-centre.com.au on the same day I bought it, which says a lot. I have never been offered anything on any of the other names of this ilk and I am going to let them drop when their time comes. Not soon enough though, as I’ve already deleted them out of my (locally-stored) ownership list. That’s how much I care about them!
During my first three months I got caught in the newbie-trap of thinking that every exact match domain name I came across was a masterpiece that could be easily developed and everyone else in the world was late to the party. One night, when the Sixty Minutes program advertised most Australian homes had the wrong type of smoke alarms installed in their house, and that everyone should go out and buy photoelectric smoke alarms instead (you can see where this is going), I had a brilliant idea. Within sixty seconds I rushed into my home-office, found photoelectricsmokealarms.com.au was available, couldn’t believe it, purchased it, and started planning what my life was going to be like as a multi-millionaire. I bought four other keyword-loaded domain names around this soon-to-be-booming niche-industry. I didn’t exactly know how I was going to become the king of smoke alarms in Australia, all I knew at that moment was I needed to secure the domain name before anyone else. The rest would happen organically, I thought. Once I created the websites, I was going to make money while I was sleeping, I thought.
Now. When you do this a few hundred times as a newbie, even when hand-registering domain names for about $25 a pop, wholesale, that works out to $5000. Let’s say you do this around 250 times. Like I did. I spent around $6250 like a muppet on these types of names. You often see other people who have fallen into this mindset on the drops. When you see hundreds of similar names dropping all at once like checkperthhotels.com.au, checksydneyhotels.com.au, etc…
One of my biggest pieces of advice to newbies is this: it’s better to own one quality name worth $1000, than 20 weaker versions of the name. For example, it’s better to own PerthHotels.com.au than BookPerthHotels.com.au, CheckPerthHotels.com.au, StayPerthHotels.com.au, etc…
So. You can see that three months in to my first year as a domainer, I’d spent nearly $9000. And it took me another month before I realised that I was a chump.
For the next month I tried to sell these names to everyone I could. I put them on all the marketplaces and I personally emailed businesses I thought could make good use of them. Little did I know at the time, that I didn’t only waste my money on rubbish names, I was also wasting my time trying to sell these types of names to anyone. It’s not unlike the penny-stock scenario in the Wolf of Wall Street movie. Only, at least Jordan Belfort knew he was peddling penny-stocks. I thought I had some great stuff to help people’s businesses!
I’m sure you can guess I didn’t sell one name and had zero enquiries.
This was good though. For someone like me, who has to learn things the hard way, it showed me that I was doing it wrong. It forced me to look at my mistakes and try a totally new approach, which I did.
This is around the time I created DomainBrokerAustralia.com.au(.) I deliberately created this name to represent I was an Australian Domain Broker before I was any good to create a self-fulfilling prophecy type situation. It was as though I was forcing myself to become good at buying and selling domain names, before I was. I caught some heat from it at the time from various domainer forums, because the old-school domainers I looked up to knew that I was a newbie. How could I call myself this name when I was still so wet behind the ears? But I knew it was my line in the sand to show myself where I had come from and where I was heading next. Hopefully from the mistakes I had been making as a bumbling amateur, I would become a careful, smart and professional domain broker and domainer.
What I understood at the time and what I still believe now is this. A Domain Broker buys and sells domain names for other people. A Domainer buys and sells names for themselves. I believe I am now pretty good at being both and I believe I have now paid my dues. When I broker a deal between a buyer and a seller, I have my domain broker hat on. I do the best deal I can for whichever side I am representing. When I broker a deal for myself (either buying or selling), then I’m a domainer.
I should point out at this stage that where I am today is not only thanks to self-fulfilling prophecy concepts, but also thanks to a few domainers who were nice enough to tell me I was doing it wrong. Ned in particular (the owner of this website) literally phoned me up when I was buying all these .net.au’s and said, “Why are you wasting your money on such garbage names?!”
Sometimes you need this sort of blatant constructive honesty and hopefully I am paying it forward by writing this article for other new young-buck domainers to help them get off to a good start too. Hopefully they don’t waste as much money and make as many silly mistakes as I did on garbage.
From that point on, I only starting buying good names. Names like airportcarhire.com.au, perthtaxis.com.au, aussiehotels.com, aussieflights.com, aussiecruises.com, flightsNY.com, flightsNZ.com, hotelsNZ.com, accommodationbali.com, sydneyaccommodation.com.au, accommodationsydney.com, melbourneaccommodation.com, melbournehotels.com.au, perthhotels.com.au, brisbanehotels.com.au, perthwebsites.com.au, aussienames.com.au, aussiehosting.com.au(.)
None of these names were cheap to buy. Half were bought from drop marketplaces and half were bought from contacting the owners directly.
Roughly $24,000 was spent on names by contacting the owners directly. I literally performed a WHOIS and emailed the registrant contact and we negotiated a price. If the name was too expensive, I would hold out and hope they would email back a week later. Half the time if you can hold out a week, the seller will email you with a lower price. Patience in this game and bluffing that you don’t care goes a long way. You might want to get in on some poker games with your mates every few months, like I do to, because those sorts of skills help in this game. Knowing when to keep your cards, or bluff that you don’t care about what someone else is holding, comes in handy. Watching the drops is like watching the flop.
Roughly $11,500 was spent on the Australian drop platforms. Looking over my records, it’s roughly 75% with Netfleet, 20% with Domain Shield and 5% on Drop.
I’m a big fan of transparency. This article clearly shows you how I spent $47,178 during my first year as a domainer.
From what I’ve learned, the best names really do come from contacting existing owners, rather than the drops. And it’s better to buy a premium name worth a few thousand dollars, than a bunch on the drops for a few hundred dollars each.
Are there any other domainers out there who are willing to give us a rough-figure on how much they spent during the last 12 months and how long they’ve been in the industry? I know normally it sounds like you’re showing off if you talk about money, but in this case it would be nice for a few people to show their hands for the sake of a snapshot at this point in time in the Australian domain name industry. I’m truly interested. I’m sure it would be greatly appreciated by all, to get some rough figures and hear about some of the good names you’ve managed to score over the last twelve months. The old-school domainers know for the most part, most premium domains are bought and sold behind dark curtains. It’s fun to open the curtains up every year or so.
Well, that concludes my three-part article of my first year as a domainer. I am thoroughly enjoying helping two or three businesses every day at the moment through Domain Broker Australia and can only see the domainer and domain broking industry getting bigger as more and more Australians begin to realise how important domain names have and are becoming.
Everyone who frequents this website is in the business of buying and selling names. Good luck with your name hunting!