I am going to warn you ahead of time, this post will sound extremely bias! Well it is my blog after all, so what do you expect? In the domaining world if you were to count the number of domain names I currently have in my portfolio you can consider me to be “small potatoes.” Currently I own around 120 domain names. The majority of my portoflio is currently held with GoDaddy. I also utilize a few other domain registrars as well such as Moniker.
As I get further and further into the domain investment side of this industry my portfolio has started to surpass the initial limit of domain registrations I have set for myself. Now that brings me to my question!
Can You Ever Register Too Many Domain Names?
For me the answer is yes! For you it could be different. There are a few reasons why I believe that it might be better to keep a smaller number of quality based domain names and rid yourself of registering domains based on the time of day. Confused? Don’t be, we have all done it. For that split second we feel we have identified the best domain name in the world and register the name based on emotion and not financial sense. Some might identify with this as being FINANCIAL FOOLERY!
I was planning on using that term one of these days in a blog entry and by golly today happens to be the day! Yes as a domainer you can commit FINANCIAL FOOLERY! You can find yourself registering domains just because it feels good rather than thinking about the long-term effects. Budgets are important! I repeat budgets are important. You’d think I would take this advice myself…I have committed the cardinal sin plenty of times.
In order to limit myself from doing this, I have decided to assess my portfolio as if it were one with ticker symbols and stock prices. The ticker symbol is the domain name and the stock prices would be the amount of revenue generated from the domain name minus the cost. This could also be considered a gross margin. As some of you may know, in accounting the gross margin is the amount of revenue left over after paying the cost of goods. The goods in this this case would be the domain registration and ICANN fees.
Anyhow, back to my point. To keep myself from registering domain names based on emotion I am making my portfolio more transparent. I want to see the overall financial outlook at any given time. Part of the reason why I have decided to do my own accounting and taxes is because of this notion. The more familiar I am with my portfolio numbers, the better equipped I will be to harness the power of my portfolio. Just as in accounting you have three principal financial statements: Income Statement, Balance Sheet and Statement of Cash Flows. These statements equip a business owner with the tools needed to identify any problems within a business.
Everyone’s domain portfolio has a problem, whether we decide to admit that or not. My main way of handling my domain problems is to get rid of the sore assets, those that just sit around generating negative returns. Instead I focus my efforts on domains which can be turned into positive returns. It makes sense doesn’t it? Well, its not that easy to embark on such a task and for that reason its time to get back to work!