Bringing new money into the domaining industry	2.3/5.0 (4 votes total) Rate: Select 1 - Terrible 2 - Poor 3 - Average 4 - Good 5 - Outstanding
Barry Goggin March 04, 2009

I have been reading both Rick and Sahar’s blog posts recently on auctions. I come away wondering if auctions are really the best model for buying and selling domains. Are auctions bringing new money into the industry or recycling old money? Is the industry growing through new domainers bringing in new money or through sales of domains to end users effectively bringing in new money or is it stagnant with money (and domains) being recycled within the industry? I wanted to think out loud and see what you had to say.

Growing any industry

For an industry to grow, new money must be entering from outside the core industry. This influx of money allows that industry to expand. If dealer to dealer sales within the core industry are the prime activity, then this churn can lead to stagnation and even contraction of the industry.

Domaining Auctions

I think both Rick and Sahar make no bones about the fact that the majority of buyers in auctions are dealers. My question is whether dealers are just churning domains around or whether there is really a net flow of domains to those outside the industry and a corresponding net flow of money into the industry? Personally I think the industry suffers from too much of the former and not enough of the latter.

Alternatives to help grow the domaining industry

Firstly let me say I think auctions have their place but I don’t think they are going to be key drivers of growth in the domaining industry. I think there are three key sources of “new money”. 1) the entry of new domainers buying their way into the industry,  2) the sale of domains to those outside the domaining industry and 3) domain development

New domainers entering the market

Most new domainers are learning from scratch and often hand registering and buying very cheap domains. They make many mistakes but on aggregate they are probably bringing new money into the industry.

However this is not a place for top, or even middle tier domain names for the most part. In my view there seems to be limited growth or at least limited ability to control the growth of that piece of the industry.

Selling domains to end users

Selling to end users is notoriously difficult to do. It is time consuming to find end users and they will often not appreciate the value of domains and resist prices that seem excessive to them. This is an area that I think has potential for new ideas and new growth.

Target domains to industries?

There are large business conventions based by industry sector going on year round. There are trade groups, associations etc all centered around each industry. Within these are some of the best potential buyers so why are there no efforts to market to these groups?

Is the number of potential buyers ready to buy  too few to warrant the expense of having a marketing presence at such conventions or ads in trade publications?

Without hard facts I find it hard to tell but something tells me that ads in trade publications might be a way to explore this area. A domainer with a themed portfolio may find it worth the investment.

Domain development

Domain development is all the rage now. Ad revenue, subscription revenue and so on is all money flowing from outside the domaining industry into it. This money can then feed purchases of more domains and so on.

I think this has the greatest potential to grow the industry with an influx of new money. A domainer who develops and tastes success is going to want to repeat the experience. So they go buy new domains to create new revenue and this revenue is from outside the industry. So in effect, domainers become the new end users.

So what do you think? Feel free to disagree with me if you wish. Do you have another “new money” stream that I have missed?

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