Become the Next Domain Multi-Millionaire – Learn the Domain Secrets of the Experts

December 10, 2007 · Print This Article

For someone new to the world of domaining, getting started can seem daunting. There is so much to learn and so many different ways to do things. There is also a lot of contradictory advice out there. What’s a beginner to do? I think the best thing is to turn to the experts. For this article, I canvassed the very best in the field to recommend how a beginner should start.

Frank Schilling

Author of Seven Mile

Frank recommends: “Start reading namepros.com and domainstate.com find those who are at the same level of knowledge as you, then learn together. Like school. If you can find somebody more experienced to mentor you thats great but join those in your class and learn together. Read blogs voraciously.”

My thoughts: One of the biggest problems I see with people new to the domaining world is that they go out and start to buy lots of domain names right away, without fully understanding what makes a good domain purchase. I’d agree wholeheartedly with Frank and say – put the credit card away for at least a month while you read as much as you can. In addition to the forums Frank recommends, I also recommend DNForum.com. If you have an interest in UK domains, then try Acorn Domains. If you have an interest in IDN domains, then try IDN Forums. As for a list of good blogs, the ones listed in this article are a good place to start.

Andrew Allemann

Author of Domain Name Wire

Andrew recommends: “Don’t get ahead of yourself. I see so many people get involved and register thousands of domains. A year later they wonder why they haven’t sold any. Take it slow until you feel comfortable with what you’re doing, and never invest more than you can afford to lose. Ideally, invest in a handful of domains and then work on selling some. Reinvest your profits from successful sales.”

My thoughts: Andrew brings up two good points. First of all, even if you are investing in domains for the long term, it’s a really good experience to try to sell a few. This gives someone new to the field a good idea of not only the mechanics of finding a buyer, negotiating a sale, transferring a domain, and so on, but also a better idea about what sells, what doesn’t and how liquid domains are (or aren’t). The second good point Andrew raises is the good old fashioned entrepreneurial principle of bootstrapping. Most people starting out in any business adventure don’t have a lot of capital to work with. Take little of your profits out of your investments early on, and instead use these funds in lieu of a loan. This will help you quickly expand your domaining portfolio and leverage new purchases.

Sahar Sarid

Author of Conceptualist

Sahar recommends: Sahar takes a very different and interesting approach. He doesn’t recommend a particular strategy, but rather an entire tried and tested business model for someone new to the field without funds. In this detailed post. Sahar states: “what a beginner investor could do is identify potential investors, relate to them he is looking to help them out finding deals, discuss their preferences, negotiate a commission, and go hunt for deals for them.” Sahar then goes on to flesh out exactly how to do this.

My thoughts: This is an excellent post and very insightful. Anyone starting in domaining without funds should read this post carefully many times.

Peter Askew

Author of Domainer’s Gazette

Peter recommends: “For someone uber-green starting out, though, I’d suggest sitting in the shadows for 3 to 6 months(maybe longer); watch several snapnames and namejet auctions, follow the domain sales board on dnjournal, read every domain / seo / blog resource available online, and intimately educate themselves on the Pay-Per-Click industry, and how it operates. The more knowledge of the business they can soak in, the more calculated and precise their first investment’ll be.”

My thoughts: Peter emphasizes the all important advice of ensuring you know what you’re doing before you get started. Too many people get the impression that domaining is really easy and people will pay big bucks for any crappy domain. Following sales is a very good way to get an idea of what people will pay for domain names. As well, you can also do well in the industry by seomaining – if you choose to go that route, a basic understanding of SEO is essential.

Michael Gilmour

Author of Whizzbang’s Blog

Michael recommends: “For traffic domains always ask where the traffic comes from. For domain purchases in general always ask what business model you are going to use to get your return on investment.”

My thoughts: Traffic is spectacular, especially if it’s type-in traffic. A well converting pay per click landing page for a top notch domain can be a large source of revenue. As Michael states, it’s important to know where the traffic is coming from, so that you have an idea how defensible the traffic is. For instance, if the traffic is coming from a formerly existing site, this will gradually decline over time. As well, knowing in advance how you’re going to get your return on investment is something many people forget to do. Their business plan is something like: Step 1 – buy domain. Step 2 – ???. Step 3 – make lots of money.

Elliot Silver

Author of Elliot’s Blog

Elliot recommends: Elliot has written a whole piece with investment tips for beginners. The points he makes are: 1. Avoid domains with trademark issues. 2. Read as much as possible. 3. Keep an eye on what’s selling. 4. Join a domain forum. 5. Be honest. 6. Ask experts questions. 7. Read blogs. 8. Hold off buying high value domains until you have the time and resources to develop. 9. Do due diligence before making a purchase. 10. Keep good records.

My thoughts: A lot of good material in that post, and well worth reading several times. I’ll simply comment on trademark typo domains. An early domaining strategy was hunting for trademarked names that hadnt yet been purchased, and failing that, to purchase typos of those domains. These trademark typo domains often yielded a lot of type-in traffic. Because e-commerce law hadnt yet developed to its current state, companies would often buy out these domainers at very inflated prices. But this ship has sailed. Current trademark law treats domainers that dont otherwise have a legitimate business use for owning these names, as illegal trademark diluters. As such, trademark typo domainers typically have to turn over the domain to the trademark holder with little or no compensation. Simply stated, avoid the trademark typo strategy altogether.

Mark Fulton

Author of DotSauce

Mark recommends: “I believe the most important tip that I would give to any beginning Domainer would have to be “Sell, sell and sell some more!” I believe many people in this industry place too much emphasis on the “priceless” value of their domains. Beginners need to focus on making a profit from buying or registering domain names for cheap and re-selling them at a reasonable profit. It is essential to go through the process of registering and re-selling a decent quality domain a few times. Each sale is a unique learning experience.”

My thoughts: Anyone who has been through the dotcom crash knows that paper profits aren’t worth much. The value of a domain is greatly influenced by the probability you are going to be able to sell it and what the chances are of getting enduser interest in the domain. Selling a few domains is a very worthwhile focus for beginners.

Dominik Mueller

Author of DMueller

Dominik recommends: Dominik has written an excellent article in which he discusses how to become a successful domain investor. Some of the tips he discusses: 1. Register lots of domains (wisely) and resell for a profit. 2. Register domains with future potential, for instance, domains for upcoming technologies. 3. Invest in 3 and 4 letter dot com’s. 4. Buy domains through drop auctions. 5. Develop your domains. 6. Budget wisely. 7. Don’t infringe on trademarks. 8. Ask lots of questions.

My comments: All very good points well worth considering. I’ll simply comment on registering domains with future potential. The goal here is to anticipate and registers names that will become popular before they actually do. The best way of doing this is to focus on a niche that you are interested in and can become an expert in (or already are an expert). Keep up with the news in that niche on a timely basis. Keep an eye out for trends, new technologies and hot products. Once you decide something is going to be popular, buy up as many relevant domains as you can. The returns on this strategy can be very high, but obviously it is a long term strategy. As well, a lot of trends you spot will not necessarily pan out; this will be compensated for (hopefully!) by extraordinary returns in cases where you are correct.

W. H. Abdelgawad

Author of DomainerPro

W. H. Abdelgawad recommends: “Buy revenue-earning two or three word generic dot com domain names. Choose domains with real words, such as OrganicAffairs.com, rather than “brandable” or made-up words like ChumDrum.com. A revenue stream is vital in the short term, and these revenue-earning generic dot com domains are most likely to appreciate in value in the coming years. Try to pay as low a multiple as you can (one to five years earnings, the less the better) so look for motivated sellers. Ask the seller if you can first park the domain name in your own account for a few days so that you can verify the traffic and revenue. Use a parking service that provides detailed stats so that you can analyze the sources of the traffic and make sure it’s not being artificially generated in some way. It’s better to pay $500 for a domain name making $10 a month, than to hand-register 60 bad domains that earn no revenue and will only become a burden at renewal time.”

My comments: I don’t think that you can go too wrong buying quality .com’s. Hold off buying in other tld’s until you understand the market better. Brandable domains are particularly hard to sell and it can take a long time for a buyer to be interested. And anyone who has gone on a binge of new registrations (and who hasn’t) will have the experience of the burden of renewal fees. The lower the value of the domain, the greater the burden that renewal fees post.

Shawn Hartley

Author of Clicks and Bits

Shawn recommends: Shawn’s been gracious enough to provide some very comprehensive information. Here’s what he says:

First, a little background. I am a marketing/advertising guy and I primarily look for domains with a branding angle or content development purposes. I dabble in several areas online; domains, content production, affiliate marketing and SEO. Of my approximately 2500 names that I own, about 50 are my bread and butter from parking page revenue and that income is what continues my domaining.

1. If you are just getting started, budget. I can’t emphasize this enough. I know several folks who tried to start domaining and blew through their cash in a month or two and before you knew it, they were out. Even today, I have a monthly budget and tend to stick to it pretty closely. I’ve passed on names that *could have been* revenue streams because I had hit my budget number for the month.

2. I stick to .com, and to a lesser degree, .org. I have very few .net names. There is some value in ccTLD (country codes) but being a part-time domainer I don’t put the time in that I should to keep up. I also stay away from the TLD flavors of the year; .info, .us, .mobi, etc. I suggest rookies stay within the confines of .com until they have a good feel for the game.

3. Read, Read, Read. Not only industry-related forums and blogs, but pay attention to consumer trends and current events. I have grabbed a few domains simply by being ahead of the curve in a few instances just because I kept up with current events and shopping trends.

4. I tend to search out domains in areas I know. Get started by searching for domains that are related to your industry or your knowledge set. As you become more familiar with the process, then start branching out.

5. I still search out drop-lists (domains that have expired and are soon back on the market). A few folks think that there are very few opportunities to be had in expired domains these days, but if you stick to what you know, you can still uncover a golden nugget here and there. I picked up an expired domain a couple of weeks ago that has already returned 50% of the registration fee in the first 10 days I owned it.

6. I’m a small time domainer who probably lacks a lot of the drive and vision to make this a full-time gig (I still have too much passion for online marketing / advertising and web development), but I think there is still a strong upside to geo-location / keyword domains and many of my recent acquisitions have fit this model.

My comments: Shawn’s pretty much said it all. I like geo domains too and think that there is a lot of upside in this niche. Sticking to a specialized niche is also important.

Anthony Noe

Author of DNBizBlog

Anthony recommends: “Think business and remember you have to sell the domain name! FreeTwentyDollarBills.com would be a good domain name – if you knew of an industry giving out twenty dollar bills. Otherwise, look at what you do know and look local. By looking local you have more chance of finding a quality domain name, and by using your personal experience you can more easily determine the validity of your domain name in a business context.”

My comments: Dude, you’ve got to hook me up with that industry that’s giving out free twenty dollar bills! Seriously, developing an expertise in a niche is the way to go. And just because a domain sounds good, doesn’t mean it has value. There needs to be potential commercial endusers for the name. As well, I’ve also previously discussed city + profession or activity or product domain names.

There’s still lots of potential for new investors in the domaining industry. If you follow the advice given above and work hard, you should be well on the path to success as a domainer.

Comments

31 Responses to “Become the Next Domain Multi-Millionaire – Learn the Domain Secrets of the Experts”

  1. Clicks and Bits featured on DomainBits » Clicks and Bits on December 10th, 2007 2:21 pm

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  5. Mark Fulton on December 10th, 2007 6:19 pm

    Love the article Jeff! Some really great tips here, I will be recommending this to anyone looking to learn more about domaining.

    PS. Trackback #3 is a spam site that steals my content.

  6. admin on December 10th, 2007 10:01 pm

    Thanks so much for your help Mark! Heh, should have figured that trackback out myself – it was a .info after all :-). It’s gone now.

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    This is a really great article I have been in the web business since the early to mid 90’s but just started getting into the domain business a few years ago so I would not say I am an expert but I consider myself to know a bit but I learned from this post and got some great ideas so Great job with this post I think it will help out alot of newbies

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  17. Hyrum on December 27th, 2007 3:22 pm

    I have heard of domain name buying and selling but never knew any one who did it who could explain it. Thanks for all the know how.

  18. Oscar on December 29th, 2007 2:22 pm

    Very interesting article, but I think you need to mention other language domains, like french , spanish and more.

    Can we translate part of this article in order to let spanish domainers learn about your blog?

    Thanks,

    Cheers,

    Oscar M.
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  21. admin on January 7th, 2008 8:58 pm

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  24. Victor Cederhage on June 16th, 2008 7:52 am

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  26. Chris Desouza on November 9th, 2008 11:12 am

    Read the forums and do exactly the opposite. Until then – I wish you luck.

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  28. KT on December 24th, 2008 1:39 pm

    I recently started parking at Sedo but don’t understand why some domains consistently get a lot more traffic than others. How do people find these when they are not indexed with any search engine yet? Does the parking provider itself (Sedo in this case) direct traffic to these?

    Thanks,
    KT

  29. admin on December 24th, 2008 3:55 pm

    @KT – People are either typing the domain name in directly through the navigation bar on their browsers, or perhaps following a link to the domain from somewhere else on the net.

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