Advice for Beginners, Buying Domains December 21st, 2007
Do you feel like it’s too late to get into domaining? Does it seem like all the good domains are gone? Are you looking for concrete advice, and not finding it? Well, here you go. Some of these are tactics that have worked very well for me. Others I have borrowed from top domainers and tips I’ve spotted on domain discussion forums over the years.
I’m giving away secrets here: there’s some real gold, so don’t say I never did nothin’ for you.
1. Spot Domain Industry Trends
Read domain industry blogs and journals. Read DNJournal.com and check out the blogs listed in my list of Must-Read Domainer Blogs. You’ll notice that some of these tips come from other domainer blogs and magazines. That’s because I read them on a daily basis and I have learned much that way.
Industry trends are important. Be aware of what’s happening with valuations of various types of domain names. For example, two and three-letter domains have all been bought up and are selling for high, even astronomical figures. But what about four-letter domains? Dominik Mueller recently expressed his belief that CVCV (consonant – vowel – consonant – vowel) domains are inevitably going to rise in price. They’re short, brandable and supply is limited.
ccTLDs (country code top level domains) are another possibility. I personally believe that .in (India) domains represent a huge opportunity. India holds a fifth of the world’s population, English is widely spoken, and internet usage is growing quickly. The .in extension was recently introduced and is rapidly overtaking .co.in. Sales in the $x,xxx to $xx,xxx range have already been reported for .in domains, and yet amazingly premium domains can still be hand-registered by someone with a creative mind. Not long ago I bought Achieve.in for $10 from a DNForum member, and in recent months I have hand-regged domains (at $4 apiece!) such as propertyauction.in, discountbroker.in, slacks.in, khakhis.in, sizes.in, judaism.in, synagogue.in, dedication.in, beachhotel.in, appreciate.in, swimmer.in & swimmers.in, nonfat.in, frozenfoods.in, indianlife.in, indianliving.in, freewebpage.in, computerschool.in, pacifist.in, pacifism.in, nonviolent.in, coindealer.in, webjob.in & webjobs.in, internetjob.in, computercollege.in, lemons.in, avocados.in, castes.in, wiremoney.in, offshoreservices.in, banktransfer.in, buyclothing.in, sendcash.in, hardwarestore.in, candystore.in, nationalnews.in, and more than 100 others equally good. Several are already getting good traffic and making money.
I’m not saying that .in domains represent the best or only opportunity out there. Through dedicated research and study you can discover other emerging opportunities. I’d advise you to ignore brand-new speculative extensions like .asia, and steer clear of failed extensions like .biz or .name. Instead, look for trends that are relatively new but have already caught on with some segment of the population and are growing quickly. There’s got to be some momentum, some growth.
2. Science/News/Tech Emerging Trends
Subscribe to blogs and magazines that discuss emerging trends and technologies (Business 2.0 was fantastic for this, but unfortunately has just shut down. You could still learn a lot from the back issues, though). Search for and register domain names related to those emerging trends. Ignore trends that may have a cult following but are not widely known. For example, I recently read about a new trend among photography hobbyists called lomography. I tasted several domains related to this trend but found that they got no traffic, so I let them drop.
Instead look for trends that have the potential to be huge. If it’s a product or technology, it should have the potential to be used by every middle-class consumer. Alternatively, it should have corporate appeal: a trend that will make money for businesses and corporations is one that will attract investment dollars.
3. Drop Auctions
SnapNames.com, and now NameJet.com as well, are especially important. I don’t care much for Pool, but I find Snapnames to be easy to use and I have acquired many good domains there. Of course there are reams of junk domains, but you can find gems in the pile. I usually bid between $100 and $300. That way if there are several bids at the default price I come out on top, but if the bidding gets frenzied then I let someone else have it.
NameJet.com: Nowadays, any serious aftermarket bidder must use NameJet as well. They get many of the good domains that formerly went to Snapnames. I place bids on both sites.
I rarely use TDNAM.com, so I can’t say much about it, but I know it’s the primary hunting ground of some domainers.
I have found good deals by searching Sedo for domains with traffic, and picking out the domains that sound good and are reasonably priced. I’ve acquired some of my best earners this way. If I make an offer of $300 on a traffic domain and the seller comes back with a price of $10K, then I just cancel the negotiation and move on. Surprisingly, however, it’s still possible to get domains with traffic and revenue for under $1K on Sedo.
Yes, that’s right. There are deals to be had at BuyDomains if you search carefully. Domains there can be purchased on the spot at the listed price with no negotiation, so if someone has carelessly under-priced their domain or forgotten to update the price, you can often get it cheap. For higher priced domains, you can sometimes get good discounts if you establish a relationship with a sales rep and work with him/her.
I picked up this tip from Peter at DomainersGazette.com. Drill down into the old DMOZ.org links to find websites that are now defunct or have not been updated in a long time. Use a WHOIS tool like DomainTools.com to locate the owner and make an offer on the domain. Many of these folks are people who started websites years ago and have since let them lapse. They often know little or nothing about domain name values and will part with the domains cheaply.
7. U.S. Patent Office filings
This tip comes from PredictiveDomaining.com. Go to the website of the United States Patent Office. From the left-side menu click Patents and then Search Patents. Rather than the Issued Patents section I’d concentrate on the Published Applications. Do a search on a term you’re interested in, like monitor, headphones or VR. For example, I just did a search on “headset.” I looked at the recent applications and I saw a listing for a “biometric encryption key generator,” which is not exactly what I was looking for but intriguing. Turns out it’s an application by Motorola for “a method of facilitating an encrypted communication for use in communication between a local device, operated by a user, and a remote device.”
That’s too technical for me, but it got me thinking about the future of biometrics in security. We see it all the time in science fiction movies: eye scanners, fingerprint scanners, voice recognition systems, etc. So I searched about 30 domain names representing commonly used items that are well suited to biometric locks: BiometricPhones.com, BiometricPadlock.com, BiometricStarter.com (for a car, motorcycle, scooter), etc. Lo and behold, BiometricStarter.com, BiometricCar.com, BiometricCars.com, BiometricScooters.com and BiometricFloorsafes.com were available and are now mine! Want to bet that some tech company or auto maker will want these someday? This goes back, by the way, to point #2 about monitoring emerging technology trends.
8. The Question of Debt
Be very, very careful about going into debt to acquire domain names. Debt can be useful, but use it wisely. Don’t pile up credit card debt by hand-regging hundreds of bad domains that get no traffic and have little re-sale potential. I made this mistake two years ago and have still not fully recovered.
Of course this implies that you must study up on just what is a good and bad domain name. So when it is ok to go into debt? When you’re buying a proven commodity. Shop around for a domain (ideally a dictionary dot com) with proven traffic and earnings. Try to find a seller who really needs to sell, so that you can offer as low a multiple as possible. Calculate how much it will cost to service your debt, versus how much the domain name will earn you on a monthly basis. If the domain name will be profitable, you have a winner on your hands. And of course you can always re-sell it for a profit in the future, as valuations are always rising.
9. Focus on a Niche
Focus on a particular subject area, ideally one you know a lot about but you can always study up and become an expert in any area that interests you. Become familiar with the companies that do business in that space, and follow the sales of all domains related to that subject. This allows you to become an expert on domain names in that space, so that you immediately know what’s priced well and what’s overvalued.
10. Think Local
A specific example of focusing on a niche is the area in which you live, because you are already something of an expert on that subject. For example, I live in Panama right now. Recently I saw that someone was offering PuntaPacifica.com (“Pacific Point” in Spanish) for sale for only $10. This happens to be the name of a very expensive neighborhood in Panama City, with luxury condos selling for millions of dollars. I snapped up the domain name, and it’s now getting traffic and earning parking money. I have many other Panama-related domains that make money, at least enough to cover the reg fees. I’m sure there are plenty of Russia-related domains that make money too, but I don’t buy those because I know little about Russia, so I can’t recognize what’s good and what’s not. (I certainly would bid on Moscow.com, but I think you get my point).
To quote Dominik Mueller on this subject:
|“Regarding place names, I see a great future for geographic domain names. City and village names, also when combined with the name of a branch of business (e.g. CarlsbadInsurance.com, CarlsbadOfficeSpace.com), are sought-after domains under .com already. If you concentrate on smaller towns you should be able to find some good available domains or domains that are for sale at relatively low prices. I think that geographic domains are especially consistent with ccTLDs. I like Frank Schilling’s advice on this subject: Invest in .com and the ccTLD of the country you reside in.”|
11. Stay Away From These
Trademarks: Some trademark variations and typos make money, but it’s not worth the legal repercussions if someone comes after you. In addition, it gives you a bad name and perpetuates the conception of domainers as cybersquatters. Before you buy, check US and international trademark databases, for example, at the U.S. Patent Office website: http://www.uspto.gov/
Tragedy Names: Don’t try to capitalize on national or global tragedies. It could damage your reputation and it’s bad for your karma.
Bad Extensions: Avoid extensions that come from tiny countries and islands, speculative extensions like .asia, and failed extensions like .biz and .name. Stick to .com, .net, .org, .info if it’s really premium, and perhaps a few very good .mobis as a long-term investment.
“Brandable” Nonsense: Don’t waste your time with nonsense words that some call “brandable”, such as ogeejogee.com, or crashgalaxy.com (I just made those up – if someone actually owns them, don’t take it personally). There are too many new domainers registering and buying domains that are just trash. Stick to real words, three keywords or less, spelled properly, no hyphens or numerals. The exception to this rule would be pronounceable four letter domains, which have value.
12. Be Ethical
Keep your word. Don’t back out of done deals because you think you can get more money somewhere else. It’s fine to change your mind if you have not yet reached a formal agreement, but if someone posts a domain name for sale on NamePros, for example, and you reply with an offer, and the seller posts “Sold” and closes the thread, that represents a commitment on your part just as if you had made a winning bid on eBay.
Don’t lie about traffic stats, don’t generate fake traffic, don’t use advertising to drive traffic to parked domains (a violation of most parking services’ TOS), don’t sell your parking account, don’t sell domains with deceptive characters (e.g. making people think a numeral “1” is a letter “i”)…
One might argue that engaging in unethical practices could ruin your reputation in the domain industry – which is a lot like a small town where everyone knows everyone – and thereby affect your ability to make money.
That may be true, but more fundamentally, being honest and ethical in your business dealings gives you a feeling of self-respect, and a peace of mind that is priceless.
Ok, now get out there and find those great domains, make money, and be happy.
P.S. Are there any important tips for finding great domains that I missed? What has worked for you? Comment!