Domain development has never been a more popular topic in domaining circles than it is today. But what exactly is domain development? For some people, domain development means nothing short of a full-featured website while others would see a developed domain as being any domain with content on it. It doesn’t really matter what domain development means — what matters is how to best go about developing your domains.

One person asked a good question on Namepros a few days ago — How much money can you realistically make from domaining? Most newcomers jump in with both feet after hearing about domains selling for large amounts, so it was a welcomed change to see a new domainer asking for guidance. Looking through the answers given, it’s clear that many domainers are now doing or seriously considering domain development. It’s not necessarily about developing all your domains, however even earning enough off developed domains to never have to worry about renewal fees would be a nice position to be in for those with thousands of domains not covering their renewal fees. I’ve been shifting more and more towards domain development myself over the past year.. I remember DomainTools publishing a list of millionaire domainers awhile back and if you looked over the list (yes, I know it was missing hundreds of names), there were far more people who earned most of their money from developed websites than as domainers. Let’s face it — there’s good money in starting a successful domain parking, auction, registration, or resource company.

Why People Buy Domains

I’ve always seen it as follows — people are paying you $X for your domain because they believe it to be worth more than that. They might be reselling the domain, they might be developing the domain, or have other reasons for wanting the domain, however they’re never going to pay you more than the domain is worth to them. So as a domainer, you’re pretty much always selling yourself short. That’s not always the case and it’s quite possible a certain company has the resources to monetize a domain through development far better than you or I could or that the domain has value to them for reasons other than it’s development potential. Cnet was the first company to really understand this back in the mid-90s – buying domains like News.com and Download.com for a few thousand. Sure, these would be valuable domains today even if undeveloped, however how much more valuable are they granted they’re developed (redirected to a relevant subdomain of a developed website - same thing)?

Once Upon a Time Revenue Domains…

As fun as it is to tell new domainers today that there are still lots of opportunities left in domaining, reality is that there aren’t — if you’re coming in with a few hundred dollars like many past domainers did, you don’t have much of a chance. You’ll meet the odd one here or there that have made out well despite coming into domaining in 2008 or 2009, however it’s far more the exception than the norm. Even with domain prices having fallen as much as they have since 2007, they’re still far higher today than they were in years past. Many domainers talk about buying revenue domains — it sounds great that if you buy a domain for 24x rev that earns $100 per month, you’ll double your investment in 2 years.. Great until you realize it took 2 years to turn your $2400 into $4800. Are you honestly going to get anywhere in a hurry at that rate? Not unless you buy 100+ domains like that one.

Professional Domain Flipper?

Even with flipping domains, most new domainers first of all will lose money trying and second of all, will need to do one heck of a lot of successful flips if starting out with anything less than several thousand. Some people are natural domain flippers — they’re great at finding domain deals and great at reselling them at a profit. Again, more the exception than the norm if we’re talking about making a living off of it starting with a few hundred bucks. Let’s get back to the domain development topic now and if you’re a new domainer reading this post, hopefully this helped you realize that just because you’re not making much domaining doesn’t mean you can’t make money online.

How to Develop Domains

When we speak of domain development, there are 2 very different types of domain developers – those who undertake domain mass development and those who develop a few of their domains into flagship websites. Which domain development strategy is right for you? Do you have it in you to do what it takes to build an authority website – there’s a lot of work involved in first making a website popular and then keeping it popular. Minisites on the other hand are pretty easy to create and require minimal upkeep. The downside of minisites is of course that most make a fraction of what a flagship website is going to make and they’re much more dependant on search engine placement (and hence their earnings are much more likely to fluctuate wildly). Google craves consistent additions of unique content, yet how would that be possible to do with 1000 domains? It certainly wouldn’t without hiring a domain development team. Who’s to say Google doesn’t decide someday that they don’t want minisites at all in their index? Just look what happened to all those Made For Adsense sites before thinking it couldn’t happen to other minisites.

Something suggested that one develop 1000 domains that each make $10 per month — that’d be nice to earn an extra $100k or so a year once setup for doing relatively little, no? How many people do you know that have even 100 developed domains earning $10 per month? Many domainers are so terrible at domain development that they’d probably make more money if they parked their domains than they are by developing them… That doesn’t mean they can’t learn to properly develop them however. It’s a lot of work developing domains and the alternative of hiring people to develop minisites for you is prohibitively costly in most cases — If your domain is only going to make $100 per year, can you afford to spend $100 developing it? If on the other hand developing it will earn you an extra $100 per year, then it probably does make sense to hire a minisite development company to develop it for you, as you’ll be in the black after just 1 year.

Flagship Website Domain Development?

Another reason I think a few flagship websites are better than a large number of minisites is because if you focus your websites all around similar topics, then you’ll be able to convert visitors of one of your websites into visitors of another much easier than it would be to acquire that traffic through other means. This website is largely about domaining and domain development — I’m willing to bet if I created a website about web design and focused on the design elements of successfully developing a domain that more than a few people currently reading this blog would be interested in. Not only that, I could setup the sites on different servers (or using different C blocks) and I could use a PR5 website in example to make my other website a PR3 overnight.

There’s nothing wrong with starting out with minisites — minisites are a great way to get your feet wet without a lot of expenses. When you start developing flagship websites, paying for custom websites, marketing and link building costs… Speaking from experience, mistakes are costly — in my case, BQB.com was 5 figures costly, not to mention thousands more in the opportunity cost of time spent on the project that could otherwise have been spent doing something else that would have been profitable. If that was your whole domain development budget, you’re basically SOL. Hopefully it isn’t and you can view it as an expensive lesson and go on to try and build something else. That’s the one real risk trying to build a flagship website — if a minisite doesn’t work out, it really is no big deal but if a flagship website doesn’t work out, it’s a lot of time and money down the drain.

Domain Development For You

So which one is the right choice for you? In my opinion, that should largely depend on how much time you can invest in domain development. If you have a full time job and kids at home, trying to build a flagship website probably isn’t going to work out well. If on the other hand you have plenty of money you can afford to lose and plenty of time on your hands, why not give it a try after having built a few minisites to make sure development is right thing for you. Whatever you choose to do, try and develop the best domains you can. If I take this domain as an example, it was getting around 1800 uniques per month I was told from the previous owner and by the time I acquired it, about 3000 uniques per month.

It’s sure one heck of a lot easier to build a successful website when you have lots of free traffic from day one.

Related posts:

1. Domain Development
2. Minisite Development
3. Cheap Minisite Development