Building a successful, sustainable domain investment portfolio is something that thousands hope to achieve. Thanks to Dennis Tinerino, founder of Domain Smoke, we get an insight into what it takes to build a domain portfolio and how to manage it.
Q&A with Dennis Tinerino
Since beginning his side hustle as a domain investor in 2013, Dennis has expanded from a handful of domains to a portfolio of 12,000 domains using GoDaddy services such as Domain Auctions, Afternic, and Premier Services.
Can you tell me about yourself and how you discovered domain investing?
I was born in Los Angeles and my father was a four-time Mr. Universe in professional bodybuilding. With a background in sales, my journey into domain investing began in 2013 when I started developing websites and discovered the significance of domain names.
My interest grew as I tried to buy a one-word.com priced at $60,000. It was clearly out of my budget for the project I was looking to start, and I didn’t understand the value of domains yet, either.
I inquired on a domain at Afternic, but I was quoted somewhere in the low five figures, prompting someone at Afternic to suggest more budget-friendly options. This led me to realize the potential for buying and selling domains.
I decided to register four domains as an investment, focusing on the legal niche because I was studying that area. I listed them on Afternic and around 50 days later, I received an email congratulating me on a $700 sale. I was super excited, and I thought, “Let’s go ahead and try to do this again.”
I started looking online for more information about the industry. I found DomainSherpa and started watching their videos over and over. Watching those videos became my primary source of education at that time.
Once you bought those original four domains, and you sold one for $700, did you go back and acquire more legal domains for $10 each?
I continued the $10 hand registration process, exploring various industries and thinking about other websites I wanted to start. I didn’t know anybody in the domain industry at that time and I was just trying to figure out what to buy.
Around 2014, I found GoDaddy Auctions, and started to understand that there are expiring names that you can buy at auction, and a great place to get inventory.
What other tools were vital to you at the beginning?
In the early stages, GoDaddy Auctions was the main site I used to find domain names to buy. I also used Microsoft Excel to create lists for domain research and portfolio management.
Did your background in sales have an influence on you starting a side hustle as a domain investor?
Working in sales and gaining insights into web design and website development, I realized the crucial role domains play as the backbone of the industry. This understanding, coupled with my exposure to various aspects of web design, sparked my fascination with domains and motivated me to explore their potential further.
What kind of domains did you tend to buy, and what keywords and niches did you go for?
I tried legal, sports, music, and events because I was interested in those. I really like sports and love music festivals, so I went towards those niches because I had a passion for them.
I found that if you’re passionate about something, you’ll enjoy it more than if you’re not, so I focused on finding domains in niches I was passionate about.
When you went to GoDaddy Auctions to buy these keyword domains, what was your usual budget?
In the early days, my budget was typically under $100. At that time, I didn’t have a full understanding of domain values. I was focused on finding domains that I could buy for $100 and potentially sell for $1,500 to $2,500 based on my knowledge of the niches.
With that background in sales, did you do any outbound selling of your domain names?
Once I figured out that you could buy and sell domains, I did recognize the potential for outbound domain sales. For about two to three years, I did do outbound marketing, reaching out to potential buyers via email and phone calls.
Once I started building my portfolio to around 100 names, I wanted to boost sales volume. This led to the creation of Domain Smoke, my portfolio website. I created it because when I called potential buyers, I wanted to have a website where they could see my business.
It sounds like being proactive helped you to scale faster. You’ve got around 12,000 domains now, so how fast did you scale, and was there an ambition to get to that 12,000 domain mark sooner?
Scaling the portfolio was a gradual process. Even if you have the capital, you at least want to begin making regular sales before scaling up. My approach was to grow organically, using the money I was making from sales to buy the next domain, rather than taking the money from my own pocket.
In 2015, I had a few hundred domains. By 2017, the portfolio grew to roughly 500 to 1,000 domains. In 2019, I reached around 2,500 domains and it was from there that I really started to scale up, adding roughly 2,000 to 3,000 domains per year.
On average, I’d buy between 5 and 10 per day, usually from GoDaddy Auctions Closeouts or by registering the domains. Once I hit the 5,000-domain mark in 2020, I noticed it was more work to manage the portfolio. There was more daily activity and regular management involved.
You mentioned Domain Smoke earlier – it has transitioned into a popular newsletter focusing on expired inventory from GoDaddy Auctions in particular. Why did you opt to build and grow Domain Smoke?
Domain Smoke evolved from a personal need to share the wealth of domain opportunities I encountered daily while browsing auctions, particularly on GoDaddy. There were so many domains that I wanted, but I couldn’t buy them all. So I made a business of sharing domains with other people.
Domain Smoke became a newsletter in 2019 and the goal was to share these valuable opportunities with domain investors.
I promote Domain Smoke a lot on X (formerly known as Twitter), where there are a lot of active domain investors. Since joining that community I’ve found a lot of activity and a lot of excitement. It helped me understand that there were a lot more people domain investing that I thought. That was big for me.
It sounds like networking has been pivotal to your success as a domain investor, is that true?
Networking, especially through social media, has been pivotal for me in multiple ways. Firstly, it opened my eyes to the number of people that are in the domain investing industry. I was able to open doors because of that community.
The impact of networking extends beyond online. Here in Los Angeles, I’ve met domain investors in person that I knew from the online community.
Networking also led to me being a part of NamesCon, where I was a moderator and an MC.
Being part of the community has brought me all those opportunities and opened doors for me that I may not have had if I didn’t put myself out there.
For new domain investors, I say get involved in the community. It’s how you learn. Everybody is very welcoming in the domain investing industry.
You manage your portfolio of 12,000 domains at GoDaddy. What strategies do you have to manage your portfolio now, and how does your Premier Services rep help you manage your domains?
Initially, when I had a smaller number of domains, I didn’t use any tools. I'd log into my GoDaddy account, scroll through domains, and quickly check to see if any domains didn’t have nameservers. I had no real methods.
It wasn’t until my portfolio grew to around 1,000-2,000 domains that it became clear to me that there was more to remember to check, and that I needed a workflow. I set up an Excel spreadsheet to track registrations, expiry dates, sold domains, and acquisitions.
As the portfolio continued to expand, I added valuation tools and domain trackers.
Once I started to grow more, I found I needed my GoDaddy Premier Services rep more and more. They’ve helped me manage my portfolio, make bulk changes, and their expertise has been really helpful.
It’s nice to not feel alone with your portfolio management. They really get domain investing and they’re very knowledgeable, so that has really helped me a lot.
I like the fact I have a go-to person any time, even weird hours or times. Having that in your tool chest is amazing. They want to help you and they want to help you succeed in whichever way.
Once you’ve acquired a domain, what do you do?
When a new domain arrives in my inbox, my first step is to add it to my spreadsheet, where I manage all my domains. Then, I list the domain for sale at Afternic and Dan.com, and I use Dan.com landers to facilitate quick inquiries. Quickly setting the lander is important because I've experienced same-day inquiries with DNS changes. I make sure to price all of my domains, too.
Out of my 12,000 domains, roughly 70% are listed as Buy It Now with an option for buyers to make an offer, too. The remaining 30% follow a Buy It Now with Lease to Own model that I’m testing out. I have eight Lease to Own deals in progress at the moment and it’s great to have recurring revenue.
What do you focus on in your 12,000 domain portfolio? Are you mostly buying and selling .com domains?
The majority of my portfolio, around 85% to 90%, are two-word .com domains. That’s primarily what I focus on. I have a chunk of brandable domains and then the rest are keyword domains.
I find the best sell-through rate with two and three-word .coms, but I love other extensions, too. I have .org, .net, and various other extensions like .io, .gg, and .cc—mainly popular ones.
In terms of categories, I tend to focus on domains related to tech, health, and finance and I tend to stay away from anything too trendy, except for occasional experiments.
For instance, a few years ago, there was a big craze with ‘meta’ keywords as well as NFT and Web3 keywords. I did a small experiment with those, but they were domains I bought with a plan to let them expire – I wasn’t going to renew them. This was an experiment to test out those niches.
It sounds like you’re building a more sustainable portfolio than focusing too much on trends, is that right?
There’s a lot of money to be made on trends if you know what you’re doing. It's easy to get caught up in the excitement without proper research, but the key is to do your own research. Trends are great, but you’ve got to make sure you catch them at the right time.
Ideally, you want to enter the trend just before it gains momentum because once it starts declining, demand decreases, and the domains are harder to sell.
Trends, by their nature, come and go. Buying in a trend can be the easy part but selling and making a profit can be hard.
How did your portfolio fare in 2023? Did you continue to scale?
I’m definitely still growing the portfolio, and I still want to scale. 2020 to 2022 were busier and there was more demand for my domains. Despite that, I still made sales in 2023 and I was still profitable. While I continue to make sales and maintain profitability, I've become more strategic in my purchases.
I’m looking for domain names with some quality to them. I’ve learned it’s not necessarily about the quantity of domains, it’s the quality. There’s a lot of opportunity to buy good domain names still.
What do you expect for domain investing in 2024 and beyond?
There has been a bit of a slowdown in 2023 but I think as things start to trend upwards again in the wider economy, domain names will go right up again.
Despite these challenges, I believe that holding valuable domains and having a strategic approach will position investors well.
Looking ahead to 2024, I am optimistic about the domain market. There are more and more people going online than ever before, and guess what? Everybody needs a domain, everyone wants to own their piece of virtual land.
What are your top tips for anyone just starting out in domain investing?
Here are a few tips:
- Have fun: The foremost rule in domain investing is to enjoy the process. Find what genuinely excites you in the domain space. Passion and enthusiasm can drive better decision-making.
- Education is key: Don’t go on a buying spree, invest in your education. GoDaddy’s Domain Academy is the best place to start your education.
- Join the community: Actively participate in domain communities and forums. Engage in discussions, ask questions, and learn from the experiences of others. Networking within the community can provide valuable insights and broaden your understanding of the domain market.
- Avoid hasty investments: Resist the temptation to jump into a buying spree without a solid understanding of the domain industry. Hasty investments can lead to regrets and financial losses. Patience is crucial; take the time to absorb knowledge before making significant investment decisions.
- Learning is never done: Stay informed by regularly reading domain-related blogs and ebooks. Industry experts often share their experiences, strategies, and market trends, offering valuable information for both beginners and seasoned investors.