Are you living in denial when you think about your domain name portfolio? Let’s find out.
Denial is a powerful behavior.
It can make you do things that are illogical. Like wasting money year after year on domain names that have no value because you think a buyer will finally come along.
Let’s look at some numbers.
Most investors will keep a domain name for years. Let’s just say 10 years for a round number.
And in the best case scenario, they have special pricing like the Domain Discount Club at GoDaddy, where you can buy .com domains for $8.47. With tax it’s $9.21 for me in Seattle, Washington.
Year 1, your total cost of ownership of that one domain name is $9.21.
Year 2, it’s $9.21 for the first year plus $9.21 for the second year, or $18.42 total cost of ownership.
Year 3, it’s $9.21 for the third year, plus years 1 and 2, or $27.63.
We continue onward. Year 10, we have $92.10 into this domain name — if it hasn’t sold.
Now, $100 is workable by most investors. The problem is that most investors don’t know when to say *enough* — because denial keeps them buying domain names that have no value.
So they add 9 more domains and their total cost of ownership is now $921.
And they add 40 more domain names and their total cost of ownership becomes $4,605.
Heck, I know people who have hundreds in their portfolio where only a few of them are good, salable domains.
Let’s say they have 450 valueless domains, their total cost of ownership is $41,445.
It’s hard to imagine wasting $41,000 but it happens because they get a sale here and there — and they trick themselves into thinking that maybe they’re cash flow positive.
But denial keeps them from realizing that they could be $41,000 more cash flow positive if they got rid of their junk domains by selling them wholesale at NameJet, GoDaddy or NamePros, or dropping them at their next expiration date.
GoDaddy charges $10 per year in whois privacy and if you are silly enough to hide your contact information from potential buyers, that could drive your total cost of ownership up to $86,445.
Use the calculator below this video or follow the link to use the calculator on DNAcademy.
Do an annual portfolio review, and face the facts.
If your domains aren’t receiving inquiries or traffic year after year, and you don’t think that a domain name is in a burgeoning industry like recreational marijuana or consumer solar panels, then drop it and save the cash for better domain names.
What can you buy?
Here are some great deals that just sold at NameJet in the past year:
Deals like this are always around the corner.
Save your money, be diligent about investing in domains with a clear commercial purpose, and focus on upgrading your domain name investing portfolio slowly over time.