How Domain Investing can be worthwhile in an Economic downturn

By John

Along the line of economic impact owing to the pandemic, how can an individual domain investor respond in this uncertain time?

Domain name investing is a huge business, and any domain investor will often tell you the rush they encounter when selling a domain at a high profit.

But now, people are paying a lot more attention to their finances as the world enters an economic downturn. As it’s very important to have a firm handle on your financial standing during these uncertain times.

While numerous analysis have been reported on what businesses will emerge stronger after the pandemic, our takeout, is on the possible shifts in domain demand; whether the pandemic will lead to an increase in demand for domain names.

Domain investors need to understand this fact and amply consider the opportunity that may present itself.

In this article, we’ll look at how domain investing can be worthwhile in an economic downturn.

5 Steps to Domain Investing in an Economic Downturn

The current situation call for proper introspection, and time to put pen to paper to plan out your goal in extending your cash flow as long as possible so that you can make it to the safer side after the downturn.

1. Start with Financial Forecast

Start by assessing your domain portfolio and when they are due to expire. Then create a forecast for how much will be needed in renewing the domains each month.

And multiply that number of domains to expire each month by the renewal fee, which will be the renewal costs for the next 12 months.

The forecast represents the minimum spends you’ll need to maintain your portfolio so that you don’t have to allow any domain to expire.

Albeit, forecasting sales is trickier than forecasting renewal costs, as you’ll be able to generate sales to offset the renewal costs.

2. Be More Conservative

The aftermath can move in any direction during a recession, as people are laid off from work or have less on their hands to start an online business, thus needing a domain name. Also, some businesses will put off the buying of a domain name until the future is certain.

So, try to be conservative with your domain sales forecasting and compare it to your renewal costs. Always assume that sales will decline, not to improve. And any sales coming in above your baseline is a bonus, but don’t get caught shorthanded when it comes to renewal of your domains.

3. Optimize Your Sales

Make sure all of your domains are getting maximum exposure. And check the nameservers to verify that they actually point to domain sales page. It is also advised to check the major domain marketplaces to ensure all your domains are listed there.

You can consider adding a “buy now” price to increase the attractiveness and the odds that the domains will be sold faster.

Additionally, have a close look on offers you previously declined and if you’re strapped for cash, you can consider reaching out to those interested buyers to see who can negotiate a deal.

4. Set Your Priorities

At this juncture, it is best to divide your domain portfolio into three groups: renewable, let go or sell before, and uncertain. The factors to consider include number of inquiries, offer amount and value of traffic, among others.

And remember to look at possible areas that may be stronger in the coming years, as even a modest return on sales from unwanted domain names, may encourage you protect the names you want to keep.

Most importantly, do not panic and sell off your domain names that need to be retained a bit longer. However, there should be emphasis on the quality of your portfolio to help protect what is more important.

Finally, make a priority list, which is set aside for a few days, then return after additional research, and see if your opinions remain the same.

5. Explore Buying Opportunities

It’s the best time to keep a close eye on the market, especially if you have cash to spare.

As people await lower asking prices til they have to buy. Just like real estate, domain name values may also take a while to adjust during a recession. If it persists for a long time, some domain name owners may eventually lower their prices as they try to generate revenue to pay for renewals or other personal bills.

Therefore, take the time to look through domain inquiries you’ve made before during the past year which the owner refused your advances. Try to contact them again to see if things have changed and they are more interested to sell now in light of current circumstances.

And keep an eye open on expired domain names, as the expired domain auction prices may remain high until domain investors are in dare need for cash. It takes one or two major buyers, nonetheless, to stop a bidding in order for auction prices to fall.

Conclusion

The domaining business landscape looks promising, even as opinions vary significantly on the resale market outlook for the next 6 months. Many are optimistic and see a boom as more people join the digital lifestyle and those that lost their jobs starting new online ventures.

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By taking the time to forecast your domain business future, you’ll not only be clear about the costs, but also about what you’ll receive as sales or negotiation to buy a domain name. And perhaps, this recession will be offering the momentum you need to hit the sky running, but always prepare for the worst.

We hope you’ve learnt how best to know what to expect and how to prepare for what is ahead with domain name business. You can also check out this list of best Expired Domain Auctions to seek for best buy and find ideas for your next domain name.