Frager Factor

Wednesday, November 17, 2010

How A Newbie Parlayed a $45K Investment Into a 35% Annual ROI and Built A Domain Portfolio Appraised at $1.4 Million Moonlighting His Day Job


“Cash on Cash Return is one way of deciding if you want to go ahead with an investment, and in that case investment in domains is far more tempting than anything else on the market right now. Especially when you develop the domain on a platform.”


I am always hearing domainers whining that those with great domains got lucky by getting in early and that it’s nearly impossible to achieve that level of success today. They claim that the decline of parking revenue is a deathblow to hopes and ambitions of all professional domain investors.

35-year old Vishal Vithlani is dispelling these myths. Born in India and working in the UK for the last 20 years, Vishal — who holds a lucrative day job as a risk advisor in the energy field — started domaining only four years ago. Today he holds over 200 domains appraised by Estibot at $1.4 million (Vishal places their value at a more conservative $275K), generating $16K in revenue and has never “parked” a single one of them. And even though he now owns a development and SEO firm in India that develops for others, he relies on Epik to accelerate his own success. The revenue generated through Epik on Vishal’s $45K domain portfolio represents sort of a bonus on top of the profits he’s already pocketed — and expects more of— from sales.

Setting realistic expectations and doing his homework.
Introduced to domaining by colleagues, Vishal studied the industry quietly by monitoring DNJournal and the chatter in forums. He heard about the land rush for .EU domains and had contacts in India who could build them out, so he jumped in.

Even while working his full-time job, he built out 12 affiliate sites and started chasing more domains on the drop and at auctions. And he had some impressive flips like Skis.EU bought for about $600 (US) and sold for over $5500, and Metaphor.eu caught for just $135 and sold for $4600. With those results, this professional risk manager caught the domain fever. From his professional experience, he knew of no other asset class that compared to the possibilities of domains. It was the kind of excitement and challenge he thrived on.

So he set a goal for himself to supplement his lucrative day income by building a portfolio of carefully selected names that mitigated risks and would enable him to build wealth and eventually leave the day job.

For Vishal, it all comes down to strength of conviction. He says, “For me, it’s all about results. My personal view is to hedge your bets. I do believe investment in quality domains is worth a punt as the risk compared to other investments such as real estate, stocks, and precious metals is far less. But again you do need to have some understanding of what works and what does not. Investment in domains does not have the same level of vulnerabilities as other investments and hence a far less likelihood of impact on investment.”

After wetting his feet in .EU, Vishal turned to .com and .net domains, scouring the drops, forums and auctions for bargains. The results? Gems like canoes.net, dishwasher.net and stiletto.co.uk, all rapidly deployed via Epik and earning money out of the chute. “It’s best to be very specific like ‘Stilettos’ instead of ‘shoes.’ And to be quite broad as with ‘Drapes.net,’” says Vishal.

Go for real value and put skin in the game.
revenue — not just counting on the resale — is the whole point, he says. “It’s the same as buying any investment property, like an apartment: you earn rental income on it until the values go up and then you sell. With bank deposits paying only a half percent, you have to wonder with something so simple and profitable as domaining, what’s the catch?”

The catch is to do painstaking research and understand what makes a great domain and what doesn’t. “I don’t give any credence to CPC rates because they’re prone to change, but I look for domains with high search volume. If there are 50 or more a day, chances are you have a winner. I don’t do verticals, I just look for high search volumes and in this economy won’t let a great deal pass.” He finds those “deals” at the Epik Swapfest where he buys domains that come with indexed and revenue-generating websites like MensClogs.net for $499 that quickly started to earn $3 a day.

To approach domaining with the same logic he applies to his day job as a risk adviser, he doesn’t accept the stats most others thrive on. Instead he uses the free WordTracker and Google keyword tools at the free membership site http://tools.seobook.com/keyword-tools/seobook/. He also uses tools to catch and eliminate duplicate content. “If you buy according to search and due diligence to content, you minimize risk.”

Realizing the impracticality of self-developing hundreds of sites while working a full-time job, Vishal researched and tested all of the monetization options including SiteDepot, WannaDevelop, ShoppingScript, Amazon Stores, Associatematic and WhyPark — all with disappointing results. Some banned his domains; others offered simple sites with no SEO flexibility. And they all looked the same. He discovered that many of these firms are not developers but white labels for other people’s platforms. And he wasn’t getting conversions or making the returns he knew were possible.

Then Vishal contacted Rob Monster of Epik and his luck changed overnight. His businesses started to take off unlike anything he had seen on the other platforms. After testing a few sites he was pleasantly surprised with 30-40% returns, even beating the returns on the sites he developed himself. Now, with 200 sites on Epik, he averages 30-40% conversion rates in just 4 months.

What’s possible?

Take Drapes.net as an example. It took 12 weeks to creep up to the #8 position. Once indexed, it attracted 10-20 visitors a day. But after 12 weeks, the potential started to become real. With 443 motivated visitors this past week (and growing), there were 1900 page views and 431 conversions earning $104.



“The key,” says Vishal “is to put some skin in the game.” Why he’s earning over $40-$45 a day comes down to the hands-on work he does. “I compare what Epik does for a domain to feeding an undernourished person. Give him the energy and he can build himself back up. They give you a jumpstart to success with a decent website that shows better to end user prospects, but you have to do a little bit of work yourself to make it a winner.” To accomplish this, Vishal has great writers in India. “Invest an additional $50 in unique content for each site and you’ll get SEO on each page on a variety of related keywords. Once you make it yours you’ll start flying.”

Give it time, then enjoy the results.
“You have to be patient,” Vishal adds. “Give it six months and revenues will only increase. Of my 200 sites, 40 are deindexed. But that’s all part of the risk you take and mitigate by hedging your bets across a diverse portfolio. If you get deindexed, don’t panic. Fix the site and resubmit to Google. I’ve done it dozens of times and in every case the site was back in 3-4 months.”

Aside from the results, what Vishal likes about Epik is transparency. “They are quick to respond. They have a future plan. They know where they want to get to” What has impressed Vishal the most is Epik’s responsiveness to site performance issues. “They took the developer’s feedback and made the needed changes. Not a single email was ignored.”

What advice does Vishal offer to newbies in domaining?

“Have a goal and a realistic budget, say $5-10K to start. To minimize risk, follow the auctions and drops. Do careful research. Understand who’s advertising and paying for position and what other company in the industry is buried in the results and would be attracted to the position you hold. Seeing the domain developed gives end users ideas, it plants seeds. Parked domains, they just don’t get it. And remember high search keywords always do well. High search versus CPC is misleading.”

In the end, says Vishal, it’s all about results. “Cash on Cash Return is one way of deciding if you want to go ahead with an investment, and in that case investment in domains is far more tempting than anything else on the market right now. Especially when you develop the domain on a platform.”

Vishal is by far not one of the big names in domaining you hear a lot about. But given his track records and ambitions, you just might be hearing more about him soon.

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About The Author: Owen Frager is an Internet marketing expert ready to help take your company to the next level.

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