As the industry continues to progress in 2020, domain investors are looking for what’s next. Many trends in domaining have developed over several years, while other trends will be new this year. Here are some of the trends you should be taking note of in domain investing.
The best domains sell for hundreds of thousands – even millions – of dollars. There are two main issues that prevent most people from investing in these domain names.
1. You need to have lots of money. Many of the best domains cost as much as a new home.
2. It can take a while to sell a premium domain for top dollar.
That’s where the idea of fractional ownership comes into play. Think of this as buying shares in a domain name. If a domain name is worth $100,000, people could buy 1% shares in that domain for $1,000/each. If the domain later sells for $200,000 then each share would be exchanged for $2,000. This offers people the opportunity to invest in domain names that they otherwise couldn’t afford. It also gives people holding liquid assets (premium domains) a way to cash out quickly. While there are still many challenges to fractional domain ownership, 2020 might be the year they are solved. By putting in place the technology and proper legal/tax structures, domain investing could become a lot more liquid this year.
The cost you pay to register domain names will likely go up this year. Back in 2018, the U.S. Department of Commerce amended its agreement with Verisign, the company that runs the .COM extension, to allow it to increase the price it charges for each year someone owns a .COM domain. Verisign charges domain registrars a fee to let customers register domains, so if they increase the fees registrars will need to pass those on to the customer. It’s likely that Verisign will increase its price for .COM by 7% this year and in each of the next three years. That certainly adds up and will increase the costs of holding onto domain names year after year.
There’s also a good chance we will see .ORG prices increase this year. Last year, a for-profit private equity company bought the rights to run the .ORG extension. The extension had been run by a non-profit for nearly two decades before last year. So, don’t be surprised to see those prices increase!
Focusing on Landing Pages
Domain parking has been on the decline for a while now, and domainers are choosing to sell their domains instead. With domain parking, domainers earn money every time someone lands on one of their domains and clicks an ad. Changes both in how web browsers work and with domain name advertising platforms have reduced the money domainers can make from it. These changes have led many to focus on selling their names rather than holding them to collect ad revenue. They’ve removed the ads from their domains and now park their names with messages informing people the domain is for sale.
Domain investing can be extremely lucrative, but it’s not as easy as it seems and can take a long time to achieve profit. As more people start investing in domains, there’s more competition in getting good names at reasonable prices. Ask anyone who’s invested for over a decade and they will tell you that the market to buy domains is more difficult than ever. This is especially true with expired domain marketplaces, where auctions are driving prices to all-time highs. That means domain investors need to get more creative and use more elbow grease to get the best deals. Doing things like cold calling or sending emails to owners of domains to see if they want to sell them. It also means that it could take longer to close deals when buying names. Combine this with the higher cost of renewing domains thanks to price increases, and some domain investors may need to rethink their entire strategy for 2020 and beyond.