61% of UK domain sales are undeveloped investments

Domain InvestmentYou may think domaining is a niche subject and you would be right, for now, worldwide forums like NamePros have 75 thousand registered members and the main UK domain forum Acorn has almost 5000 members however it is still a very young cottage industry that progressing fast but under the radar from the average person in the street.

The selling of domain names is generally thought to consist of speculators who have bought/caught and acquired the domains eventually selling them to end users to make their profit, just as a developer would in the offline world would buy land and either selling it to someone who realises the value of it or building on it to add value and then selling.

I had often wondered whether the market has been driven by end users or whether more and more web savvy would be domainers are fuelling prices, for example the double in value of LLL.com’s has been greatly due to shortage of supply and a growing interest in them by investors rather than end users, there have been some huge sales of LLL.com’s and success stories + demand has and will continue to push their value upwards at a phenomenal rate that would attract any investor.

inv.jpgI decided to look at the UK domain market seeing as it is more affordable at present to get into and one of the top domain extensions, using Domain Prices who publish a list of  public UK domain sales you can get a good idea of what sells and for how much it sells for. The standout domain being Recycle.co.uk which included a website, that domain was caught after it expired a number of years ago for £5 and later sold for £150k, Fly.co.uk at £87500 is being developed but at present one of the other top drawer domains mobile.co.uk sold for £120,000 is parked, if you carry on looking through the list and checking them you would be surprised how many decent priced domains are parked, tip.co.uk £10k, eshares.co.uk £10k, Employment.co.uk £17k, thousands and thousands of pounds spent on domains bought this year that as yet have not been developed. It also includes at least one domain that I know of that was registered for £7 and sold within 1 month for over £1000.

The same trend continues if you look back to previous years sales, large sales of great domain names parked and undeveloped, it would be logical therefore to say that these names are possible future development projects or just long term investments. I checked hundreds of domains sales from this year using domain prices and 61% of the domains sold either do not resolve to a page or are parked.

Delving a little further and looking at domain sales over £5000 you would expect the amount of those developed or in production to rocket up but greater outlay can bring greater rewards and 62.5% of £5000+ domain sales are undeveloped or parked with only 37.%% actually being used or forwarded.

Boom!If you compare the domain market to investing in stocks and shares then it is only a matter of time before the success stories filter through and the mystery of buying domains as investments becomes more mainstream, a few years ago it was quite complex to buy and hold shares but today it’s a breeze, every taxi driver seems to know the stock market better than the city and has shares or a stash of Iraqi dinars 🙂

Overall domains look to be an attractive investments, extremely low maintenance costs with only the domain renewal to take care of, that aside their value can double, triple, quadruple in only a few years without developing them if you buy wisely, the secret won’t last forever though and the value of domains could balloon if more mainsteam individuals, businesses and investors decide to put their money into the market.

About Scott Jones

Scott hails from the north east of Scotland and started earning online at the end of 2000 building websites for local businesses during which time he won an award from Lord Alan Sugar for Excellence in Enterprise. After having quite a bit of success with domaining Scott mainly runs educational evergreen websites which generate over 3 million visitors per month but is always on the lookout for a fresh thinking out of the box way to turn a buck. Follow on Twitter.

Comments

  1. I’ve looked down the list…

    As an example, what do you think of GoKarts.co.uk, £3100?

    • Parked for now but at that price you would expect something to go up soon, Go Karts are popular and a fairly decent sized market so a decent sized sale.

  2. Well, that should apply to other types of domains, too. I own a little over 100 names (mostly .coms) but only 15 are developed. I have more ideas than time to implement them …

  3. Domain names are extremely easy to purchase. I bought my daughters name for £400 so when she is older she can start her own business called Tamzin.co.uk

  4. Yeah definity domains in an attractive niche.

    That’s why I am still running http://www.domainleft.com (or tbh trying to) publishing lists of expired domains with PR. Because that shows they have traffic. I occasionally get a Valid PR4 or a LLL domain with various TLD and they are registered within 2 hours max.

    It would get so much more competitive and expensive if your average joe became a domain owner.

  5. I prefer to undeveloped or minimal SEO in case of niche domains. Either way, I think your time is much better spent finding further investments rather than slightly increasing the value of your current properties.

    However, I acquire domains on the back of trend spotting, so that might be unique to my segment.

  6. Scott, I know I’ve asked this question before but I’m still not 100% sure what “buying wisely” means.

    You have said previously that you need to look at things that will also be available in the future and things that people search for. In one of your other posts you mentioned that you kept the http://www.ledbulbs.co.uk domain and sold the ledlightbulbs.co.uk domain.

    From I can see it seems like “led light bulbs” has about 5x the amount of searches that “led bulbs” have.

    So from that I conclude that you’re not only looking at the amount of searches performed on the main keyword of the particular domain.

    Could you share a bit more about what makes a good domain purchase when it comes to domains that haven’t been registered yet?

    • I don’t see the longer domain getting 5x more searches Mikael so not sure where you get that data, ledbulbs is shorter, more memorable and in my eyes a much nicer domain, it describes it product the best. Buying wisely for me means something at or below current market value, so either a good deal or a future technology, also something futureproof that isn;t about to be a fad or disappear so a subject with longevity.

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