Think of”Domains” Like you Think of”Diamonds”

Morning Folks!!


If you want to know what makes one domain have great value and one domain have almost no value, you need to look no further than the Diamond Business. For years I tell folks to get the best domains they can. That would be like me telling Diamond miners to get the biggest and best diamonds.


Here is the parallel that I hope will have you understand how I see things so you too can see what I see.


A 1 carat diamond can be any price. It depends on the quality and a few factors. For this example let’s leave that part out for the moment. Let’s agree that an average 1 Carat diamond is about $5000 today. As you go up in size to 2 carats the price just does not double. It goes up much more. So by the time you get to 10 carats you are not at $50,000. You are more likely at $500,000.


The opposite holds true when going smaller. If you have 100 little diamond weighing 1/100 of a carat each,(1 point each) you would have 1 carat of diamonds. But that 1 carat ain’t worth $5000. It isn’t worth a fraction of that. Those diamonds may only be worth a few hundred dollars. They are not significant. Their value is much less. No significance.


But when you have BIG diamonds, they mean something. They have exponentially greater value. That is why I look to domains that are like raw diamonds. I am not looking for tiny insignificant things and no domainer should with all the opportunity with the GREAT domains out there.


So we can see parallels with domain names in Land, Real Estate, Oil, Gold, and Diamonds among so many others. That is why it should be easier for many than it is. The road map is already there. Understanding of the map is what holds the KEY to getting a domain name that others would desire. If nobody desires something there is no value. Simple. Selling sand in the desert just may be hard to do. But if you look at it the right way you may have the right idea just the wrong domains. You sell water in a desert.


Have a GREAT Day!

Rick Schwartz

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13 thoughts on “Think of”Domains” Like you Think of”Diamonds”

  1. James

    Nice analogy. I use sportsmen or actors to get across domain value. There are lots of actors out there – people who can act – but there are only a handful of George Clooneys or Brad Pitts; those guys will fill cinemas, and that’s why they command the wages they do.

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  2. Coder

    In that regard (size) it’s like diamonds, but in terms of market dynamics, it’s more like gemstones.

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  3. Richard Haigh

    I like the analogy, but the”map” is constantly changing – it has to… I do believe, however, that english.com names are still the”gold standard”, but as the Internet evolves there will be much more value placed on names that are in other languages.
    Don’t worry, i’m not an IDN evangelist, per-se, and I certainly won’t be recommending that folks go to idnforums.com; which, in my view, is a truly horrible forum (!).
    Cheers

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  4. Domains, Oil, Gold, Land, and Food

    Good analogy.
    I’d also add that it’s easy to spend your money on those”$300 diamonds” when you think you are getting them for $50. You can make a living doing this, but it’s akin to selling stuff at a flea market. Sure, you may make $100 to $600 a day at the flea market, but you NEVER hit a home run and drive home with $10,000 or more in your pocket.
    You have to ask yourself, would my money have been better spent by buying three great domains and selling for the same or much more than the combined total for all the mediocre domains? You’ll make much more buying the great domains if only for the fact that when buying great domains, their worth is very evident to almost all that take a look, and when buying mediocre domains you’ll make some mistakes where you thought they were decent but turned out to be total duds. Those dud purchases are cash right off the bottom line earnings. You now have to recoup that from your profitable domains. Also, some of those dud-domains will sell causing you to second-guess what you are doing and begin thinking the other mediocre domains are good and then you keep renewing them. It becomes a vicious cycle where you never know when/if sales will come, you overhead is high, and you keep adding more backfill in hopes of making more sales. That’s a dizzying biz model. Buying true quality is not. You can choose either one. I’ve seen both and made my choice, but there are plenty of others that still do it. Even big companies like BuyDomains and Marchex hold a ton of trash domains. Honestly, I don’t know how they do it, but IMO, don’t follow their lead unless you want a miserable business model to live under for a one-man operation.
    @Richard….nice plug….I like IDNForums.com as well. :)
    I’ve been moving into IDNs more heavily and it remindes me of where the market was in regards to buying .coms in about 1997. The market is not new, but is it seems to be coming around. I’ve been getting $1-$2 clicks lately at NameDrive on my IDN domain for”Airlines” in Thai. :)

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  5. Tony

    It’s actually a great analogy but it’s not always that simple.
    Rick Schwartz always says patience is key to selling but then puts a post out there that you can make million$ in 36 months. Kind of self-contradictory. I will tie this into my point.
    Domains, as anyone who’s been in it for more than a few years knows, is a numbers game. In theory, ten $10,000 domains is better than one thousand $100 domains. However, in practice, it might take you YEARS to sell even one of those ten whereas you might get a sale per week or month if you had the thousand. If you can afford to wait years and years to realize your investment, buying the biggest diamonds you can is great. However, for the rest who need to trade up or generate a constant cashflow by selling, quantity is a necessity. This is why FS and MHB sell hundreds of domains a month vs RS who sells less than a dozen per decade. It’s a numbers game.
    Either way, you still need to buy domains that other people want or need. That is the key.

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  6. Richard Haigh

    @Domains, Oil, Gold, Land, and Food
    Please re-read my post. I said that I don’t like the forum, and the reason is because they don’t tolerate any new thought or ideas and continually try to pick on new members and make them feel ‘small’.
    In fact, it is like a grumpy old man’s”hate” forum; people join, realise what it is, and run! Small wonder then that they have over 7000 members, but there’s only two dozen or so members who EVER make a comment…
    That forum has done more to hinder the growth of IDN than anything else.

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  7. DomainReport.ca

    Just realized from your header post that if you rearrange the letters in Diamonds you get Domains (with a d left over).
    Good analogy, diamond valuation is a tricky business just like domains. Diamond quality has many attributes, like color, flaws, size, shape, weight, and so on.

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  8. Rick Schwartz

    Tony, Does not sound like you understand the concept of”Appreciating assets.”
    You state info that is not correct about others.
    Why not focus on you and your sales? How many have you made? What is the total value of those sales? How many did you leave money on the table? How many did you regret? I am not a”Flipper”. I wrote a post about that last week and it will be up sometime next week.
    On the 36 months, I give a ROAD MAP. One that works IF you understand what make one domain worth 6 figures and another domain worth $6. And if you don’t make $1MM in 36 months, you will sure as hell be on your way. This is just ONE WAY!
    Your time would be better spent looking at your own business because mine works just dandy! I am happy with over $10 Million in sales on 17 deals and retaining royalties and equity, stock and even a piece of the action on Candy.com, Property.com, Punchbowl.com, eCruise.com, Luv.com. That income on just those names gives me funds to do things others just dream about. I am not a ONE DIMENSIONAL domain seller. :-)

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  9. David Wrixon

    The problem I have with selling, is that the price needs to reflect the fact that the asset has more value to the buyer than it does to me. Most of the time, it is not even close.
    Does that mean our investments are worthless? Absolutely not, because if we did sell we would make substantial profits on the acquistion price. Does it make it worth selling? Absolutely not, because I would need to replace with a more promising investment, which I am largely unable to do.
    If I needed to spend the cash, it would be different.

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  10. Bill Winans

    As one of the owners of IDNForums.com your comment about”hateful” posts or hateful members is a HUGE mistruth. Overly brash and outspoken members? Yeah we got them just like they do at DNF, NP etc.”In your face” honesty about pidgeon shit domains and”know it all” attitudes…. you can get a quick dose of that too. The Moderator staff tries to keep as close to zero censorship as possible, but will take stern action against anyone that crosses the line into hate or anti-religious posts etc. Anyone that spends even 5 minutes scanning threads on the forum will see it is cleary 99.9% serious dicussion about domains, ICANN news, monetizing domains, and also a pretty active amount of trading and selling domains.
    For the record, IDNForums is owned by an ethnically diversified group with owners based in the US, Russia, Israel, Japan, China, Mexico, Holland and the UK. I can tell you without a doubt, not a one fits into your any catagory of”haters”. Our membership comes from 50+ countries around the world many whom do not speak or write English well so they are not big on posting, but do participate and do business there, much in private due to language barriers. IDNForums is a mix of cultures of the world, but”hate” is not welcome or prevalent.

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