Buying and selling
domain names is an exciting adventure that for some seems to conjure up
images of finding hidden pirate treasure or guessing the winning
combination on the next Powerball. Stories abound of domains that were
purchased for $8 dollars 15 years ago being sold today for millions. Of
course, that leads the more adventurous of us to wonder, “How can I do
that?”
Well, the ocean is big. Your likelihood of
cashing in on the motherlode is low, and you’re liable to waste a lot
of time and money chasing after the wrong ships. You need a map or some
other advantage to guide you toward that elusive booty.
Here are some tips to get you pointed in the right direction when trying to buy or sell a domain name for profit.
Narrow your focus
There are millions of domains already
registered by someone and endless combinations of available domains to
register, especially when you consider the hundreds of new domain name
extensions like .xzy and .club. If you plan on buying a domain to resell it, you should start by narrowing your focus.
What do you know about already that can
make this easier? Do you know about pets, are you in car or home sales?
Do you know about education or healthcare? Think about some of the
spaces you are most familiar with and start there.
It is much easier to sell a domain you know would be valuable to someone in a particular industry.
Here’s what you DON’T want to do: Target
prospective buyers based on their perceived economic status, without any
insight into the industry you’re targeting. “Lawyers seem to do well,”
you think, “maybe I should start selling names to them.” So you rush out
and buy a bunch of domain names you think would appeal to the law firms
you’ve identified as potential buyers. Without knowledge of the space,
you may not know that the American Bar Association and other
industry-specific organizations set rules that govern some aspects of
legal advertising. You’re not going to strike gold selling names your
target buyers can’t use.
Understand your audience, and the sales will follow.
Find names that offer real value
Think of ways that the domains you buy
would be a valuable asset to the buyer. Picture someone who would
benefit from buying the domain in a space you are very familiar with. If
this was you and someone was trying to sell you this name, would it be
beneficial for you to own? Be honest. If so, why? If not, why? Use those
answers to refine your search for names.
Let’s play this out with a real example.
Say you’re familiar with the real estate market in Tempe, Ariz., and you
have the opportunity to purchase tempeapartments.com for $200.
This might be a good deal. Tempe has a lot of rental property; it’s a
competitive market; and there’s ample turnover in the apartment space
because the city is home to a major university. Ask yourself:
- How much does one month of rent profit a landlord, property manager or other prospective domain buyer? How about a year’s worth of rental profit?
- Would you buy this name if you were in the space? If so, why?
- What kind of domains are landlords, property managers, etc., using?
- How much do they spend on advertising?
- How much would this domain help them to sound authoritative in their space?
If the names are taken (as many probably
will be), head over to the aftermarket to buy from people who already
own the names or who let them expire because they no longer plan on
using them.
A great place to look is auctions.godaddy.com.
Use the advanced search option to quickly
hone in on the type of names you are interested in. You can narrow the
results by price, top-level domain (i.e, .com, .net, .org, .club, etc.),
keyword, and many more filters. Using this feature will help you
quickly sort through the millions of domains on the aftermarket and find
the domain names that best fit your end goals.
Evaluating the price
Once you have a name in mind, how do you know if the price is fair? I like to use namebio.com
to compare the domain I’m thinking about buying with similiar domains
that have sold. You can enter the keyword and also use some advanced
search features to see a list of names similar to yours, what they
actually sold for, and when they sold. You can also research current
domain sales on venues like GoDaddy Auctions and Afternic. Finally, Ron Jackson issues a weekly report on DN Journal that covers the top public sales of the week. You can use all these resources to help you price your domains correctly.
Getting your domains front and center
There are many venues to get your domains out in front of the buying public. You want to consider a few things:
Is the venue trusted and well known?
It’s important to feel confident that you will get paid and that the
buyer will get the domain name they paid for. Pick a place that has good
ratings with recognized bodies such as the Better Business Bureau or
licensing from a trusted government source.
A trusted brand is vital when selling a domain.
Is the distribution network strong?
The potential to get your domain name in front of the right buyer is
key. Listing in a distribution network such as Afternic can get your
domain name in front of millions of potential buyers each month.
Letting a great name you purchased at a
fair price to make a profit sit in your account, instead of getting it
in front of the right buyer, is like finally finding that pirate
treasure map but framing it to admire in your living room instead of
following it to the booty.
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