I’m planting lots of small seeds and making marginally bigger bets.

There are lots of great domain investors out there. People who make bold investments and great sales.

I am not one of those people. I’m good at it, but not great. (Note that some of the people you think are great at domain investing actually suck, and there are lots of quiet people on the sidelines who are making a mint.)

Here’s how I look at it: Domain Name Wire has been my primary business for a long time. Now, from a revenue perspective, PodcastGuests.com has caught up with it. So I have these two very high margin businesses and then domain investing, which is more capital intensive. Domain investing is something I do as icing on the top; it helps me stay on top of what’s going on in the business, to understand more when I write, and to have fun.

I don’t count on domains for cashflow. In fact, I try to reinvest everything I make selling domains into buying more domains and improving my portfolio.

Over the past few years, I’ve grown my portfolio from about 1300 domains to around 1600. I’ve pruned quite a few over that time, so my total additions is higher.

Most of my adds are low-cost auctions sub $300, and the majority of these are sub $60 including “closeouts” and uncontested expired domain auctions.

These domain acquisitions form the portfolio model of my business. This means I’m buying domains for cheap and selling them for 10x-200x the purchase price — but at median prices below $5,000.

While some of these new additions sell quickly, I look at it more like planting seeds. Most of the sales occur at least a year after I buy the domains.

Those seeds have come to fruition nicely this year. When I look at my BuyNow sales at Afternic, I have 11 sales in the past 3.5 months going back to June. The domains sold for between $495 and $5,800 with a median of $2,300. I’ve made additional sales outside of Afternic.

Lately, I’ve tried to acquire some more marquee names that could make great brands and businesses. I picked up Warmfront.com in an expired domain auction. I just bought Shortbread.com yesterday at GoDaddy Auctions. The Shortbread.com purchase alone cost the same as about 700 closeout domains. But it’s also a domain that has a decent liquid value should I ever need to cash out. The same can’t be said for 700 domains you buy in closeouts.

So that’s my model. It’s been a good year so far, and I hope it continues.

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