Rick’s Christmas Present. 10 POINTS and a Story About How to be a Successful Domainer

Morning Folks!!

No matter how many times you tell folks the answer to their
questions, they still ignore the answer. It must be human nature. Two types of
people. Give folks a million keys to sort through to figure out which one
unlocks a vault and you will have two groups. MOST will try any key
other than the one you give them or the one where you tell them where it is but it requires EFFORT on their part. The FEW will try the key you give them or will put in the EFFORT. The first group has a very small ratio of people that figure it out and unlock it. So they fail. Frustrated and angry. You see it everyday in this business. The second group has a very small failure rate. They find success.

So folks ask over and over and over again, how to make a lot of money with

1. 1. YOU MUST learn what constitutes a GREAT domain
as opposed to a WORTHLESS domain. MOST domainers buy WORTHLESS domains. It's a FACT. They try to sell this CRAP all over the place. But it is CRAP so they have to find other domainers that don't know the difference and that is NOT HARD!!! They do this because they really have
not studied what makes a domain have value. Either present value or future
value. They are clueless domainers and their bank account proves it.

2. 2. Then the laziness factor sets in. You point the
direction, even sometimes give the url and they still can’t get there. They
want to know so damn bad but won’t do a damn thing to learn.

3. 3. Domains are about Nouns with Adjectives and
Verbs and such. That is the foundation of domaining IF you are looking to the
future. IF you want to know what many of the successful have in common. But no
matter how many times I have given the KEY to domains, NADA! I have an entire
blog post about just nouns and verbs and adjectives. Now I am not going to dig through to give you the url. If
you really want to know, you will find it.

4. 4. I have ALWAYS said there are many ways to climb
this mountain. I can only share the way I did it. It does not mean you have to
be on the same path. Chart your own, just make sure you are wildly successful
before you take shots at others. My path just happened to work well for me and
many that followed that path became very wealthy and transformed their lives. I
always said that path was “Time Sensitive.” (But it still works)

5. 5. I have always said that your FIRST purchases are
your most important. If you can’t get the cash flowing, you are stuck.

6. 6. Everyone excuses my success because they say I
started with a lot of money. EXCUSE ME, That is FALSE! It is a LIE! It is NOT
TRUE! Now that does not mean I was not successful before and it does not mean
that I did not have some money and a going business. BUT, I started this with
$1800 on a credit card! That was my TOTAL investment. Like any other investment
or dabbling, you take a dollar amount that you are comfortable losing and you
TAKE A SHOT! I took a shot with $1800.
I bought 18 domains at that time.
By the time the bills came in, I was in a positive cash flow and was
able to buy another 18. Another $1800. Each time I bought a domain I would
learn. But there were no tools or ppc to learn with. My only compass was
NUMBERS and DOLLARS. That’s it. And a bit of gut. And knowing that to do what I
wanted to do without running out of money while I waited YEARS for mainstream
to develop, ADULT was the only way to accomplish that. So I made $$$ with adult and focused them on mainstream domains that were YEARS away from being income producing.

7. 7. So I took my adult earnings and would buy
completely worthless mainstream names with no chance whatsoever to monetize
those domains. I had to be patient, hold and wait for the Internet to develop. I knew some of how it would unfold, not all. But that was enough.

8. 8. Since others employed methods that I DID NOT
BELIEVE IN, and were short term, I was able to buy their GREAT domains. Sometimes they were flipping so fast
(And still are) that they never took the TIME to evaluate the domain name. That
was to my benefit.

9. 9. So if I started again today, I would DO THE SAME
THING even tho everyone says that can’t be done. Well that is BULLSHIT!

10. 10. So
there is a formula, a map and a way to make a lot of money. If you can’t do it,
then it is on YOU not me. But you MUST know what makes a domain name GREAT and
that is the #1 shortfall. Much easier to sell gold then SHIT. You say you can’t
afford gold? Bullshit! Just get a smaller piece and build it up. It takes PATIENCE. But when you are starting, you need to flip and make a GREAT profit as quick as possible. Want to do that? Go back to #1 and you will.
Again, this was MY way. I can only share MY story. Anything else would just be nonsense and have no value. And while I focused on 'Type Ins' back then, it is NOT essential NOW. Things have changed. Valuation is different. The old 5x or 8x is GARBAGE that was thrust upon the industry by VC guys and like fish in the sea, domainers took the bait and swallowed it hook, line and sinker. It was nonsense then, it is nonsense now. Those that knew laughed and those that did not sold out at a fraction of the true value. And now that PPC has plummeted, how is that formula working for you now?
Rick Schwartz

28 thoughts on “Rick’s Christmas Present. 10 POINTS and a Story About How to be a Successful Domainer

  1. Andrew Douglas

    I always find it interesting how guys like you say you invested in names that
    A. were generally considered worthless by their contemporaries, but where you saw future value.
    B. you held them or built sites on them until they were valuable and
    C. now you think that new people should invest in the same names that are now valuable instead of speculating on names that contemporaries consider”worthless” but that we hope to buy and hold the same way you did in the 90’s.
    Just because you see a name as worthless doesn’t mean others can’t find value in them. I’m all for getting out of the domainer to domainer rut so many are in (and that I’ve profited from to some extent), but my long term strategy is speculation in names where I see huge potential but many today look at as worthless. I still invest some in keyword .com’s. Why not, right? But if I don’t speculate, I’ll never see the kind of return I’m looking for long term.
    I’d like to think we are on the same path to success, but that we just aren’t listening to you. Instead we are following your example.

  2. Aron

    Good post.
    I always disliked the revenue multiple as a way to valuate a domain name.
    I’m glad to see we’re all getting away from this terminology (5X revenue… 10X revenue). Blah.

  3. Tia Wood

    “Just because you see a name as worthless doesn’t mean others can’t find value in them.”
    I agree but Rick was also said:
    “I have ALWAYS said there are many ways to climb this mountain. I can only share the way I did it. It does not mean you have to be on the same path.”
    Thank you, Rick for the insight!

  4. Rick Schwartz

    @Andrew, that is not at all what I said. Please re-read. But as far as worthless domains, many folks have portfolios of worthless domains and they are going broke. Somewhere in your equation you have to have RESULTS. What I did was FIRST build a revenue engine to self finance all future acquisitions. That allowed me the luxury of following my gut for the future. Without that revenue engine, I would not have been able to do that. So I focused on that first.
    Also, I can take what you wrote today and show you dozens of posts that echo your. But they are from 1997!!! And they did not see it then when there were tens of millions of domains there just for registering them.
    What I show folks to do is make money TODAY. Immediately. Not looking for a ship to come in that may or may not happen. You can look back to my posts from over a decade ago. YEARS before most even became domainers. I have never wavered. What gets folks in trouble is someone telling ME what makes a great domains when I am looking at something that I view as worthless.
    You can build an empire on any domain in the world if your idea is good enough. If your product or service is needed and wanted. But hula hoops don’t happen that often so a great domain gives you a little wind at the back.
    There is a tried and true approach that works most every time and then there are all the new ways still looking for a result. Still looking for a success.
    Climb the mountain any way you see fit. Whatever it is that is in your gut. I am not telling you or anyone what to do. On the same token, I get so many emails each day loaded with crap telling me how good SHIT is.
    So there are results and everything else. Buying a great domain for $2000 and flipping for $10,000 in a few days, week or months is the path of least resistance. If you do that and repeat, repeat, repeat……within 18-36 months ANYONE that does that will have an income stream of over 6 figures and will have a very handsome portfolio of names.
    Find something that works, WHATEVER IT IS and then REPEAT, REPEAT, REPEAT. Simple but folks are always too much in a rush to see past tomorrow. 18-36 month horizon?? Way too long for most. But getting the timing right helps alleviate a lot of frustration along the way.
    Do it your way, do it anyway, but until there are results to point to, it just does not count.

  5. Rick Schwartz

    btw, In 1997 I was telling anyone that cared to listen about type in traffic and domains and of course most of them had a better way. The ones with a”Better” way are gone. The guys that understood what I was saying and copied it did pretty damn well.
    They were there for the picking. They accused me of this and that and the majority did not even believe there was such a thing as type ins.
    As the game changes adjustments need to be made. But the foundation really never changes.

  6. Andrew Douglas

    Thanks for the thoughtful follow up, Rick. I think we can agree on a lot of things, but saying”show me the results” is as impossible for me today as it was for you to show for your”mainstream” names back in 1997. I can pontificate about brands and such as much as the next guy, but it’s a game of patience. It’s a vision thing, and in the end we’ll see if my speculative investments pay out or not. I’ll be sure to tell the world when they do :)

  7. Rick Schwartz

    I believe for success you need results along the way. If you drill 1000 holes waiting for a gusher and nothing comes out of any of them, is it an oil well or a pipe in the sand?
    In 1997 I had plenty of results to point to. It was the results that financed the speculation. Had I done it the other way, most peoples way, I would be stuck pretty fast. That was true in 1996 as well. It was 6 months from when I bought my first domain until I got my second one. First I had to focus on cash flow THEN I could start to build and speculate. As long as all the speculation is self financed by income from domains, there is no limit. That is why I say the FIRST domains are the most important ones.

  8. Alfred Kaur

    Rick, do you think you can apply this logic to the .in domain extension? Can one expect the value of english noun and adjective domains in the .in extension to increase in value, in say, 5 years?

  9. Rick Schwartz

    I know very little about .in domains. Let me tell you what I focus on. Population and buying power. So let’s take Somalia. You could have every domain there and you would be broke. No buying power.
    India on the other hand has a huge population with emerging buying power. So it would be more meaningful.
    That said, you still need GREAT domains names no mater the extension. That is the first rule. This is the cardinal rule.

  10. UFO

    Lets be honest, there are diddly squat names to reg now that can make you a worthwhile return for the effort you put in, unless your time has little value.
    Only real opportunities I can see are getting the 1-2k domains and building great cashflow sites off them.
    Once domains were undervalued, now to be honest the majority are overvalued. If you blindly buy domains then you will never succeed as the easy money is long gone.
    Nb: Rick, I see that Google is sniffing around big time here in the UK to work with real estate agents, Google really is now moving into business and businesses will slowly and surely stop advertising with them, and the advertising will move to direct contact. It’s obvious. Nobody is going to pay the executioner of their own business.

  11. Michael Toth

    For someone who owns klosters.com, unitedkingdon.co.uk and canada.co.uk, plus 1000’s of others like this i totally agree with your sentiment

  12. sigma Names

    Genetic ccTLD will rock in the future. Right now if you type CrispyChocolate in Address bar it will land in CrispyChocolate.com
    but, in the future, it will land on ccTLD where the search originates. So all type ins will go to ccTLD.

  13. FloNames

    Hi Rick, I’m new to your blog and somewhat to the domaining game. I say I’m new, but I’ve been in for around 2 years now and am still learning what constitutes a GOOD domain. My hang up I think is trends… I watch open markets and see what is selling, but more often then not, I have trouble actually moving names for a decent profit. Admittedly, I don’t spend high dollar on them as I’ve mostly been a bit of a bottom feeder, buying what seems to be selling and striking out. I do feel that I got in late and am trying to transition to the upper end, but I’ve not found that cashflow generator to offset the cost of my time.
    What strategie could you offer a seasoned newbie to climb the next step?

  14. Rick Schwartz

    It sounds like you are chasing yesterday’s news. You got to get ahead of the pack not stuck behind it. Obviously what you are doing is not working.
    Add up all the $$$ you spent on domains this year. Add up all the renewal fees. Now divide by 10 and next year stop being a bottom feeder. Buy just 10 names that have meaning and value and you will find them much easier to flip. Right now you could only flip to someone that knows less than you. Wrong direction. Flip it around. Find gems with value and have them overpriced and you will be a happy camper.

  15. CurtisNeeley

    A parked page licensed to GOOG AdSense for Domains is deceptive advertising.
    Priceline.com is a Google advertiser.
    GOOG sponsors or license deceptive ad sites all around priceline.com site.
    Try to find one on another site like aamazon?
    I filed a TM complaint and they ignored it. I was once a Google Inc advertiser.
    This site is blocked by parked page exclusions but it has at least an attempt at content?
    Game over guys.

  16. Farid Mammadov

    I think the main point is the end user. When he comes, he never asks about revenue, traffic etc. I sold ccTLD to end user for xx,xxx in the beginning of this year. And it was a good experience for me.

  17. Ken E.

    Rick, Thank you for sharing your knowledge and continuing your”stewardship” of the community, those that do not understand the value of your generosity are foolish. I am new to the industry (2005) but have a couple names that are positioned for end users, and some that should generate revenue however. The end user domains need a broker who will work the deal, and I understand your previous suggestion of “graduated commission” Great idea! I know enough to say I could spend hundreds of hours working the “revenue domains” but if time and energy are devoted to the WRONG approach, all I have gained is a lesson learned. While that lesson will be valuable, where does one start these days to make money? Do I develop and have to bill each advertiser (and how to keep up with that)? Do I use Whypark? Something else? Adwords has produced nothing (no surprise there) What I’m saying is – there is no real guidance on how to proceed except trial and error, that hurts the industry. I’m not asking for a golden spoon, you and others like you figured it out so you should retain information – you earned your path. I just need some guidance on where to find information on proceeding in today’s environment, books are outdated before they are released… message boards are filled with poor info, and how to tell the good info if you are new? Help!

  18. Ken E.

    Regarding the broker subject: How does one place a price on the domain without leaving”money on the table”? Or avoid overpricing the domain thus rendering broker and end user without anything to discuss.

  19. wanda

    Noted this comment on a blog:
    what is your view
    I guess that Enforced ” Personalised Search ” from Google will make outside adversing more important & possibly the keywords more important ? The type in traffic in Europe is a myth we do not use it, we use the search engine.
    The keyword AdSearch exact match stats are important, you at least know the possible footfall.

  20. Ken

    Well, thanks anyway – I’m still looking, if anyone has tips on learning today’s industry they would be much appreciated. There is a lot of info out there but putting it all together without direction is like rowing a boat from one side, round and round…

  21. Jeff Schneider

    Hello Rick,
    The three most important factors in any domain sale are :
    1. End User
    2. End User
    3. End User
    The highest recorded and private sales all involved End Users. The rest is Mental Masturbation.
    Gratefully, Jeff

  22. Ronald Regging

    Most of my $xxx and $x,xxx sales have been from hand regs and $5 closeouts at GD. Trust me, you gotta swim through a lot of shit to find a shot, but if you’re good at recognizing end user potential, branding potential and maybe have an ounce of luck, there’s still good money to be made at the bottom. I’ve had insane ROIs from domaining. The only thing that keeps me at the bottom is my inability to reinvest my profits due to the financial demands of real life. But as Rick pointed out, you need to create a self-sustaining revenue engine and that is what I hope to accomplish in the year ahead.

  23. twitter.com/Jessica320

    Rick, as always you are always reasonable.
    “That said, you still need GREAT domains names no mater the extension. That is the first rule. This is the cardinal rule.”
    Hmmm. This gives me great encouragement as I own carinsurance.xx and scholar.xx (cctld’s)…
    Now, your wisdom about nouns, verbs and adjectives is so valuable. This is originally from you and even for that alone, you deserve some accolade. I bet before you many never value domains that way. so thank you even if others discredit some of your claims. What matters is you share your experiences and your ideas, to the benefit of those who care. We can’t be all in the same boat at the same time or it will capsize. One idea could spring forth other ideas, but not all will prove effective. so if you’re lucky enough to get the formula that works for you, repeat it, do it again and again, as you said. but also, never stop experimenting, ‘coz possibilities are endless for those who brave the tides and stay on for long. Even bad results are good because then you will know what you’re doing something wrong. you just have to be humble enough to listen to the gurus and to those who say,”been there, done thata.” :)
    now i would like to take advantage of your skill and experience, Rick – if not your fame – hope you will agree, but will not discuss it here…
    Again, Merry Christmas and Happy New Year to You and to all of us, domain enthusiasts. :)

  24. Wakas Mir

    Great stuff rick.. I sold two of my domains.. one for 3k and other for 5k very happy at that, but I have a few domains I know will go for more .. and your post is encouraging :)

  25. Stefan

    Hi Rick,
    I read this post dozen times and in easy way helped me to better understand ‘domain game’. Just one late question, where is in your opinion best place to buy quality domains in the range 500-5000$?
    Best Regards.
    P.S my English sucks, I am aware of that :)

  26. harrist

    nice post ! no wonder Ali quick fliper domain recomended your site :) , anyway if we talk about business basically its all about test and trial! we never know until we test it! but once we found out what works! then scale the hell out ;) its same like selling domain! first try we failed! second test buying chips, fails, the third test! should works :) but I have to be honest its long way to go for me to reach 6 figure, but it doesn’t matter, cause all i need is to figure it out which one that really works for me!

    anyway, nice post :D


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