Richard Lau has an interesting post that points out several factors and examples to look at when calculating ROI.
If you see a domain sell now for 7 figures, and the owner did not own it before around 2003, then it’s likely that the ROI on the sale is more akin to Real Estate than to striking gold.
Quite an interesting point, this is essentially saying that Pre-2003 domain investments were more riskier and had higher ROI because of the unknown nature of domain names early on in this game.
Interesting points - Spot on!
I do think that the factor of risk should also be factored in. A $35 investment for most people is less than 1 months worth of Starbucks Mochas, whereas a $150k investment in the early 90s was an amount equal to a house. A lot of little $35 investments may help finance that $150k investment, and in fact that’s usually the case with most domainers. Most buyers of domains early on were either individuals that had the foresight or some group of people that wanted to start a business, as was the case with business.com. It did take a bit of risk to spend $150k on business.com but it took far less risk to spend $35 a few times over to register some early name. Then again, it’s all relevant to your financial situation, risk for some, may be Starbucks Mochas for another.
The real opportunity in the domain market is the same as the real estate market - to find (and buy) undervalued, or under-monetized, assets, then improve the property (best PPC/CPA/Developed Solution) and flip it out, and do the same.
Exactly - and from my experience with domains and real estate, you make the $$$ on the buy and cash-in on the sell.
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