The saying goes “You’ve got to start somewhere”, but in reality some places are much better than others.
Trust me, I of all people understand being excited, pondering the limitless possibilities, and the rush of making quick money. However, when you are first starting out, you risk losing everything if you go about it incorrectly.
To increase your chance of becoming and staying a profitable investor, you should take this list into consideration.
Mistake #1 – Shoot First, Aim Later.
The absolute biggest mistake you can make as a new domain investor is buying domain names before you have a solid grasp on valuation. You may want to start by reading: The Ultimate Guide to Developing Valuation Instincts
It’s very likely that all the money you spend when you first start will disappear. You are better off throwing that money into a pit of fire or flushing it down the toilet. Why? Because at least then you wouldn’t be filled with false hopes of seeing it again.
So, instead of throwing your money away, start saving it. Create a separate bank account and every time you have the urge to buy a domain name, put the money into that bank account instead. That way, when you are TRULY ready to start investing, you can buy higher quality domain names.
Mistake #2 – Mr. & Mrs. Know It All.
I was the same way when I first started, I already knew everything, duh. How dare those wiser, smarter, more experienced investors tell me how to spend my money? What do they know anyhow?! Well, it turns out they were right. And they were trying to keep me from making the same mistakes they did.
“Take the cotton out of your ears, and put it in your mouth”. You don’t know it all. No one does. Don’t let your ego get in the way of you making a living buying and selling domain names. Take the advice of the most seasoned investors. They have been through it, and they are kind enough to offer their advice to you. I still reach out to more experienced investors and ask their advice, why? Because they know more than I do.
Mistake #3 – It’s Premium, Bro.
The term “premium” gets thrown around more than a (insert crude and shallow joke here).
In reality, less than 5% of all the registered domain names on the entire web can be, and should be considered premium. Just because you think it’s premium, doesn’t mean it is.
We all want to own premium names, but not all of us have the ability to do so. For our industry to be taken seriously by the masses, we must first respect the domain names in our industry. Use the word only if the domain matches it.
Mistake #4 – Hiding Behind a Mask.
People do business with people. Let us know who you are, we want to get to know you. I’m not saying to put your last name and social security number on blast, just a first name, a photo on your profile, and some contact information. This industry is about creating relationships – and that all starts with building trust. No one likes to do business with someone who seems to be hiding their identity. It’s creepy.
Mistake #5 – Picking Fights.
It’s one thing to have a heated debate, and it’s another to run your mouth to the point where you are cast out. Be respectful of your peers, they are in the same line of business as you are, and you may eventually need their help. Why would you want to limit your resources in an industry where quality resources are an already rare thing? Be mindful, considerate, friendly and respectful of others. It’ll get you much further.
Mistake #6 – Spamming Other Investors.
This one will get blocked on every level. It happens way too often; newbies will send out bulk emails, include everyone’s email address in the CC and try to pitch something like: “PigeonShit.Tornado is a SUPER PREMIUM domain at auction, only $50,000!!!!!!!!!!!!!! BID NOW!!!!!”. Then follow up every 36 seconds with another email. Cut it out. They don’t need you to blow up their inboxes telling them about your domain name being at auction.
Mistake #7 – Hi, My Name is Unprofessional.
Before you ever start connecting, make sure you have a professional presence. No one wants to do business with Harry the Hobo. Ensure that you have some social media profiles, with proper information filled out, and a nice profile photo. The more you come across as a stable, high-integrity professional, the more seriously you’ll be taken. Save the bong-ripping photos for SnapChat.
Mistake #8 – Overpaying for the Domain Names You Shouldn’t Have Been Buying in the First Place.
Overpaying for domain names when you first start (or ever) is a big no no. You shouldn’t even be buying domain names yet, and you just buried yourself in an acquisition that you will likely never get out of without taking a sizeable loss. Take a few steps back, put that money in the bank. You do not need to buy a domain yet, let alone overpay for one! You’ll regret it, and you’ll end up taking a loss, hurting your domaining self-esteem, and likely stop investing altogether.
Mistake #9 – Taking the Word of a Valuation Tool.
Valuation tools are not the end all be all. You cannot just place a value on a domain name because an algorithm told you. Albeit, there are some excellent tools at your disposal, but they are meant to guide you on your valuation journey, it’s not a one-stop shop. You have to take into account numerous other metrics before you can conclude a value range for your domain name. Sometimes computers get things wrong, and that’s why it’s up to the human to do the research and compare it to the computers valuation. If you find that both the computers valuation and your research field a number that are along the same lines, then you know you are onto something.
Mistake #10 – Jumping on Bandwagons & Buying Into Hype
There are so many marketing campaigns thrown around daily that you don’t even know what’s real or not anymore. Take a step back and do some much needed due diligence. Just because someone says a new TLD is going to be the future, doesn’t mean it will be. It doesn’t mean that all beliefs are false, and you should avoid all hype – it just means that you must do a ton of research before believing something. Make sure you dive headfirst into your research before spending a penny on your investment.
At the end of the day, it all comes down to knowledge, integrity, hard work, and most importantly, patience. If you can master those, you will surely succeed in any venture you take on.