Part 1 - What is your Business Model?

Part 1 - What is your Business Model?

I was approached to write a series about to start a domaining companies and reveal some of the opportunities and pitfalls for the unwary.
When I show some shops the first thing I look at is the underlying business model. If there is no business model, so there are no shops, only a game. In many cases you would have better odds to play in any of the casinos in Vegas.

When you look at the domain industry, there are three models that are different from each other even though they are not mutually exclusive. One of the great things about domains is that a single domain can have design features that reflect all three business models.

1. Monetary domain - have incomes now sell for more revenue later.
2. Capital growth - treat domain as a stock item and sell the domain of natural owners in the future.
3. Development - design shop for domain, make money and sell in the future.

When you look at a domain that it is a good idea to think about what kind of business model does this domain support.

For example, if I have a domain with significant traffic that I can make money now so this will reduce the depreciation period on my investment. On the other hand, I bought "asdcffddsc.com" then I would be prepared to continually reinvest the cost of re-registration until the domain is sold to a natural owner / speculator.

Always, always, always think in terms of the underlying business model. I have seen so many newcomers in the domain industry to spend much money on what they thought was fantastic domains, just to have a near zero return on their investment.

For example, "SeattleMedicalBenefitsSchemeForOlderPeople.com" is likely to take a long time to sell at a "natural" the owner of the domain and is unlikely to have any traffic. To develop such a domain to a site will become a branding nightmare.
I know that you might think it is a sovereign domain, but remember that ultimately you have to subject your personal opinion that the business model. Just to reinforce what I say the picture yourself sitting before a table loaded with $ 10 bills. Now Imagine tearing them up one at a time, hundreds and then thousands of dollars sent to the trash. That is what domaining is that without focus on business fundamentals.

If you insist on tearing up the money that then sends a part of it my way and sponsor whizzbangsblog.com?

In Part 2 I'm going to unpack what is the fundamental building blocks you need to start domaining, and that is no probable partner you may want strategy to support your business