Nobody gets into this business planning to lose money.
They get into it because they saw a screenshot. Some five-figure sale on NamePros. A guy on Twitter talking about a hand-reg he flipped for 50x. A blog post about someone who turned $10 into $15,000. And I get it. I really do. It looks like the most accessible business on the planet. Low overhead, no employees, digital inventory you can buy from your couch at 2am. What's not to like?
What nobody sees is the quiet disappearing act. People register a bunch of names, renew them once, maybe twice, sell nothing, and just kind of fade out. No dramatic goodbye post. They just stop logging in. I've watched this happen dozens of times over the years and I'm not going to pretend I was some kind of exception when I started. I wasn't. I made most of these mistakes myself. Honestly, I'm probably still making some version of them, just with better excuses.
The first purchases are almost always emotional. I think this is just human nature. You see a name and your brain immediately starts designing a logo for it. Picturing a landing page. "This would make a great startup name." "This just sounds premium." But that feeling isn't demand. A domain is only worth something when a real business actually needs it and is willing to write a check. Not when you can picture it on a business card.
Here's what I wish someone had told me early on. There's a massive gap between what impresses other domainers and what actually sells. I spent way too long optimizing for peer approval. Getting "nice reg!" comments on threads. Feeling validated. Meanwhile the names sitting in my portfolio that eventually sold were boring. They were the names nobody on NamePros would ever get excited about. Two-word industry terms. Straightforward service names. Nothing clever. Nothing futuristic. Just obvious names for obvious businesses.
Then there's the math, which is probably where the most damage happens.
A new investor buys 40 names and figures at least a few will sell in the first year. Seems reasonable. It's not. Sell-through rates for a typical portfolio sit somewhere in the low single digits annually. I've written about this before but it bears repeating because people still don't internalize it. If you own 40 average names, you might sell one this year. Maybe. And that one sale might not cover what you spent on renewals. The model works. I've seen it work. But it works when the inventory is strong, the pricing is realistic, and you give it actual time. Not Twitter time. Real time. Years.
And look, every hype cycle makes this worse. I've watched it with crypto names. NFT names. Metaverse names. Web3. Now AI. Same pattern every time. New domainers pile in late, register a bunch of trend keywords, and sit back waiting for companies to start calling. But the best inventory in any trend gets locked up early by people who were already paying attention. By the time you're reading the third TechCrunch article about a trend, the best domain names in that space were registered six months ago.
Can trend names work? Absolutely. But you need to know who the buyer is before you register the name, not after. If you can't name the buyer profile in one sentence, you're not investing. You're buying lottery tickets. And that's fine if you know that's what you're doing. Most people don't.
Side note on this. I see a lot of portfolios from newer investors and there's this pattern that comes up constantly. The names are all... replaceable. Two generic words pushed together. Synonym swaps of a stronger name someone else already owns. Slight variations that feel close to something good but aren't quite it. Here's a test I use. If a business could easily pick a different name without losing any clarity or brand power, your name isn't that strong. The best domains feel like the only option. Average domains feel like one of many options. And one of many options doesn't command premium pricing. It just doesn't. I've got names like this in my own portfolio that I'm trying to get rid of. The difference between me now and me five years ago is I'm at least honest about it.
Pricing is where ego really takes over.
A new investor buys a name for $12, falls in love with it, and lists it at $4,999. Not because there's any market data supporting that number. Because they want it to be worth that. Because they spent three hours researching it and convinced themselves it was a gem. Then an offer comes in at $400 and they reject it because it feels insulting. Name expires. Or worse, they renew it for another year out of spite and then it expires.
I get this because I've done it. Not once. Multiple times. You anchor to your own expectations and stop listening to what the market is actually telling you. And what the market is telling you, almost always, is take the money. Build the cash flow. Let that confidence and capital fund better decisions next time. The compounding effect of actually selling things is worth more than any theoretical perfect sale you're holding out for. It took me an embarrassingly long time to learn that.
Actually, here's the thing about that. Early cash flow changes your entire psychology in this business. When you've sold a few names, even at modest prices, you stop white-knuckling every listing. You start buying differently. You start seeing your portfolio as a business instead of a collection of personal bets. That shift matters more than any individual sale.
Scaling too fast is the other trap nobody warns you about.
Someone makes their first sale , maybe $500, maybe $1,000 and they immediately plow it all back into 30 new registrations. Or worse, they haven't sold anything yet but they read a thread about how volume is the key, so they go from 40 names to 200 in a month. All you've done is make your renewal bill bigger. Portfolio growth should follow proof of concept. If you can't sell from a small portfolio, a bigger portfolio just means you're losing money faster. I know that sounds harsh. It's also just true.
I've been working on this myself. I've been dropping names that haven't gotten a single inquiry in three or four years. Every time I drop one there's this little voice that says "watch, someone's going to want that next week." It hasn't happened yet. What has happened is my renewal bill went down and I stopped feeling guilty every January when the invoices show up.
Which brings up the thing I think about more than almost anything else in this business. Renewals.
Every domain in your portfolio is a recurring bet whether you think of it that way or not. You're re-buying that name every single year. Ask yourself honestly: would I register this name today if I didn't already own it? If the answer is no, you're paying to hold a mistake. And that sounds brutal but it's actually freeing once you accept it. Letting names go isn't failure. It's how you run a portfolio instead of a museum.
I know a guy, met him through some DMs years ago, who told me he'd never dropped a domain. Ever. Not once. Wore it like a badge of honor. I remember thinking that's either the most disciplined person I've ever talked to or the most stubborn. He's probably spending more on renewals annually than some people make in sales. But he can't let go because every name represents a decision he made, and dropping it would mean admitting the decision was wrong. I get it. I just can't afford to think that way.
So what actually works?
Honestly? Boring stuff. Start smaller than you want to. That's not exciting advice and I know it. But the people I've watched succeed in this business over years, not months, almost all started tight and expanded slowly. They focused on who the buyer was before they bought anything. They owned names they could explain to someone who isn't a domainer. They priced based on what similar names actually sell for, not what they wished the market would pay. They expected long timelines and they were right to.
And this is the part I keep coming back to. Stop trying to impress other domainers. The market that pays you isn't on NamePros. It's not on Twitter. It's a business owner in some industry you might not even think about very often, who needs a name to launch something or rebrand something and is willing to pay because the right domain solves a real problem for them. That's the whole game. Everything else is noise.
This business isn't gambling. But it punishes impatience the same way. Most people lose money because they sprint when they should be playing probability over years.
If you're new and you've lost money in your first year, join the club. Seriously. That's normal. Almost expected. But if you're five years in and still bleeding, that's not bad luck. That's a pattern. And the fix usually isn't intelligence or some secret strategy. It's restraint. Knowing when to buy, when to hold, when to drop, and when to take the offer sitting in front of you instead of the imaginary one you keep telling yourself is coming.
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