Domaining by the Numbers

In my last post about domaining, I mentioned that it is possible to get a steady stream of income from owning domains. Since then I have had a couple of people ask me for more information, so I thought I would try to explain the concept a little better.

I know no better way to explain the concept than to dive right in and do it by the numbers. The yearly cost of registering or renewing a domain is about $7.20 on average after discounts. This equals $.60 a month or about 2 cents a day. Our goal is to monetize the domain thru Pay-per-Click (PPC) so that it brings in more than the $.60 a month. Everything else is gravy so to speak. If the domain brings in just a dollar a month, it would bring in a total of $12.00 a year. So our yearly profit would be $12.00 minus the $7.20 for a grand total of $4.80. At this point you are saying to yourself “Great I can buy a Starbucks coffee with my profit”, but you are missing the point. Just like buying a stock, you would never want to buy just one.

Domain parking is a passive stream of income. Other than the initial outlay to purchase or find the domains, there is little work involved. Since there is no ongoing effort needed to keep the parking revenue rolling in, other than a tweak now and again, what is to stop you from owning 10, 100, or 1000 domains? If you owned 10 domains your profit would be $48.00, 100 would be $480.00, and 1000 would be $4,800.00. For every $1.00/month increase in revenue, your profit would increase by $12.00/yr. A domain that was making $2.00/month would bring in $16.80/yr and at $5.00/month your yearly income would increase to $52.80/yr.

Of course, acquiring 1000 that can be used for domain parking is not a simple task, but it is possible. Companies like Name Administration or Great Domains own domains in the tens if not hundreds of thousands and they all started out by buying one domain at a time. Unfortunately, they started years ago, but there are still good domains out there.