Buying Domain Names Is Not A Business Model

A new domain investor emailed me this week in a panic. He told me that he had been “investing” in domains for over a year now and was yet to make a dime. So I asked him the question that I ask any new investor, “What’s your business model?”

His answer was, “I am buying domains in a niche that I know very well.” My response was, “And how do you make money?”

This is where he got stuck, his grand plan in the domain world ended there. A business model is a plan for how your business makes money. Last time I checked, buying domains is how people spend money, not make money. Unless someone else is paying you to buy domains (which would be awesome BTW!) then buying domains is not your business model, it might be part of it, but if the buck stops there you’ll probably lose money, well, forever.

Here’s a business model most people start with, and most also fail with. Buy domains and sell them for a profit. Now that’s a business model except when you’re this vague you’re really not going deep enough to know if what you’re buying can really be sold for a profit. In fact, most new Domainers start by buying domains that are not assets but instead are liabilities.

This is where a repeatable business model is key. Rather than buying hundreds of domains hoping that one will sell for big bucks I tell new investors to start small and prove they can sell one or two domains before investing thousands of dollars. It can be easy to look at a list of previous domain sales and say, “I have domains like that in my portfolio!” However you have to realize that every domain is different and every domain sale is different. Until you have some sales under your belt you really don’t know if you’ve been buying real assets or not.

That is why I recommend that new investors reach-out to experts for help. is an incredible resource as are forums like DNForum, all of this information is free and if you take the time to learn more about the market and how other people have built their businesses, you’ll waste less money buying worthless domains. Remember, domains have been available to register since the 90’s, if you hand-register a domain that you are “amazed” is still available you should be more cautious than celebratory.

My point is simple. Buying domains is not a business model, in fact, unless you have a solid track record selling domains you’ll probably buy a lot of junk and spend a lot of money. Take the time to learn from others, don’t be afraid to ask questions, and yes, attending a conference like TRAFFIC is incredibly valuable and can dramatically accelerate your business. Think conferences are expensive? Spending thousands of dollars on garbage domains you drop a year later is expensive, conferences are incredibly valuable because at the end of the day you’ll learn the most from other people who are where you want to be now.

Morgan Linton

Morgan Linton