He also runs a very successful insurance brokerage in Queensland specialising in insurance for tradies. Have a look at TradeRisk.com.au – it’s a great example of a thriving business website!
Author: Shane Moore
Development is a hot topic when it comes to domain names.
Whilst we’d all love to make six-figures from flipping domains, the reality is that only the very best domainers can achieve this.
So we need other ways to supplement our income.
In years gone by parking was a great option for monetising a portfolio, but revenue certainly isn’t what it used to be.
So if you can’t make the money you want from flipping domains and parking, the next option to consider is development.
But before you get stuck into developing your domains there is a very important questions to ask:
Is developing my premium domain going to help or hinder my overall goals?
We all know that premium domains can be very valuable assets.
We also know that great development can increase their value, especially if the development has resulted in a profitable business.
Some people may argue against development, but there is no doubt that a developed domain which is already providing a decent ROI is going to be a more attractive acquisition target.
On the flipside, poor development may actually hurt the value of your domain, and could make it more difficult to sell the domain at all.
Development Does Not Suit All Domains!
This may seem obvious, but development is certainly not going to suit all premium domains.
For certain product or service related domains, development can work very well.
On the other hand a two-letter domain may be every bit as ‘premium’, however there is absolutely no point developing a domain like this.
I would only be developing a domain where the development matches what a likely buyer would be doing with the domain.
Ultimately your development should have one or both of the following goals:
1. To create an income stream – either from advertising or ecommerce.
2. To show prospective buyers the potential in the domain.
If neither of these goals seem realistic for your domain, then you probably shouldn’t be spending time or money on development.
Weighing Up The Positives And Negatives
Good development isn’t cheap, especially if you have to pay others to undertake the work.
So before jumping in, here are the positives and negatives as I see them:
The biggest positive impact will come from developing the domain to the point where it is generating ongoing revenue.
The benefits of this are twofold. Firstly, you are generating an income for yourself, and secondly you are showing prospective buyers that the domain will generate a return for them.
A revenue generating domain may make it easier for an end-user to justify the purchase.
For example if the domain alone is valued at $20,000, this could be a big ask for many SMEs without knowing for sure that the domain is going to work for them.
On the other hand if the domain is already generating $10,000 a year in revenue (or potential revenue from leads), the buyer may be able to justify a purchase price of $40,000 or more.
Any asset, be it a domain or otherwise, that comes with recurring revenue is always going to be more attractive to a buyer.
Great development that results in high search engine rankings may also increase your chances of a sale by increasing visibility.
If a business owner or marketing manager Googles their core product or service offering and sees your website above theirs, they may be more likely to contact you to make an offer.
At the very least they will be more familiar with the domain and the benefits that it could bring to them if they can see that it outranks their current site.
There are some very serious potential negatives when it comes to developing a premium domain, so it’s important to know what you’re doing before you jump in.
The biggest risk is that you prove the business model doesn’t work.
Say you have widgets.com.au and you setup a great looking website selling widgets. You do a great job with design and SEO, and there’s not much left to improve.
What if you do all this, but the site makes very little profit? You’ve just proved to any potential buyer that the business model best suited to the domain does not work!
In this case it would have been better not to develop, and wait for someone else to come along with the same idea and spend their money on acquiring the domain from you and developing it.
The second risk is that you do a very poor job with development. This could lead to a number of negative outcomes.
For starters, you’ve put time and money into something which has provided no return.
Potential buyers may also be put off by seeing the domain developed in such a poor manner.
And if you do end up with a potential buyer, your amateurish development may lead to the buyer seeing you as an amateurish seller, putting you in a weaker position from the outset.
In this case, again it would have been better to leave the domain parked.
The final risk is that no potential buyers contact you as they presume the domain is in use and not for sale. This would not happen if the domain was parked.
This is not a major issue, especially if you are proactively contacting potential buyers, but it is still something to consider.
Should I Do It…?
Successful development is not easy, and it takes a lot more than installing a WordPress site and throwing up a bunch of $10 outsourced articles.
In years gone by this may have worked thanks to Google’s love of Exact Match Domains, but as we all know this is no longer the case sadly.
So think hard before developing your domain. If the answers to any of the following are no, then development is probably not the right option:
- Is the domain related to a product or service?
- Do you have sufficient time/money/expertise/motivation to develop the domain properly?
- Is there potential for the developed domain to produce meaningful income from advertising, ecommerce or lead generation?
- If the developed domain cannot generate revenue, can it at least generate high levels of relevant traffic that will provide value to an end user?
Personally I am very pro-development, and I would encourage people to give it a try provided that both they and their domain are right for it.
You never know, you might develop a domain so effectively (and profitably) that you no longer wish to sell it!
If you like our articles, would you mind sharing with your friends and colleagues please? Simply click one of more of the Social Media buttons below? Many thanks. 🙂