The following article is a guest post by my friend and fellow domain blogger Morgan Linton. Morgan is the publisher of Domainvestors.tv as well as author of Domain Flipping available at DNFlipping.com.
Many new Domainers are oftentimes overwhelmed with all the information online related to Domaining. This oftentimes leads people to begin buying domains in hopes that someday these domains will be worth money since it seems like so many people are making money in the industry. What these new Domainers miss is the amount of time and energy professional Domainers put into research and development. To put this into a real-world context – this could easily be compared to the housing speculation bust that just took-place in the United States. Many people were inspired by news stories that people were making millions in real estate. While it is true that people were making millions, many people just started buying old dilapidated houses thinking that they were on the road to financial independence.
We all know what happened with the real estate market – and the same is true in the Domaining world since Domain Names are in essence, virtual real estate. The first lesson here is that owning a large portfolio of domains names does not necessarily mean you have made a valuable investment. Many people get started in the Domaining world buying a ton of Domains that sound great to them without considering the actual re-sale value of the domains. Then, when they find that each year they are paying hundreds or thousands of dollars in renewal fees without making any sales they get discouraged and feel like “all the good domains are taken.”
So what can you do to avoid this situation? It’s actually not as hard as you might think – but it does take time. Domaining is not an industry that is great for getting rich overnight – instead if you look at the key players in the industry they all work hard and have valuable online investments. One of the first places all new Domainers should go to learn more about the industry and get a feel for what prices domains are selling for is DNJournal.com. DNJournal is a great place to both read industry news and determine which domains names are currently selling online and where the domains are sold.
As a beginner it is good to look at domains selling in a lower price range as you can’t expect to start buying and selling six-figure domains from the beginning. When you look at the sales list try to get a feel for what makes a valuable domain. You will notice that domains like “IWantACar.com” sell for much less than “BuyCar.com” – it is absolutely imperative that as a new Domainer you understand what a difference even a single letter can make in the value of a domain name. Also, pay careful attention to where these domains are sold – this will help you become instantly familiar with the main services people use to sell their domain names.
Before you buy a domain – take a look at both DNJournal and NameBio to get a feel for what your domain name might be worth. NameBio is a great tool that allows you to search for past sales. If you are buying “NewToothbrush.com” you can look on NameBio for other domains that sold with the word “Toothbrush” in it to get a feel for the price-range your domain will fall within. You can also look at domains with the word “New” in it to see how this word can impact the final selling price of a domain.
One of the best ways to learn about Domaining is from other Domainers and there are now plenty of professional Domainers who run blogs with great information applicable to both new and experience Domain investors. There is no better way to learn about Domaining than from Domainers themselves and there are so many blogs to choose from that new Domainers can easily get a number of unique perspectives on this growing industry. Blog aggregators like Domaining.com, NameBee.com and DNHeadlines.com can save you time by displaying Domaining blogs together on one page organized by the most recently updated blog. If you read an article you like or have a question you can always post your comments and interact directly with the publisher.
At the end of the day it is always better to take your time to learn more about any market before you jump into it. If you take your time to learn more about which domains are selling and how Domainers are running their businesses you can avoid repeating the mistakes many Domainers make when starting-out. Then again, you’re bound to make mistakes along the way and learning from these mistakes will only help you become a better Domainer.
CP:
the thing that helped me get rolling was
constant buying and selling.
You have to build capital in order to progress forward.
Early on, you can’t be attached to any names… they are all a means to a growth.
Buy, sell – repeat.
Build up capital to buy big names and develop bigger projects.
Aron
XF.com/blog
Great post chef! Getting an honest opinion on names before you buy is tricky b/c you don’t want to reveal your potential “gems” (or patterns) to anyone, so it can be difficult at first (we do this live feedback, at GoDrops.com during the daily drop)
And it’s sooo important to understand english syntax and phrasing when browsing top-sales list — there is nearly always a clear right way and wrong way to phrase things.
Also, looking to Google for phrase search frequency doesn’t always yield the best keyword domains; you run into a lot of long-tails, awkward syntax, 3-word phrases etc… good searches don’t always equate to quality domain names.
Direct Navigation (type-ins) are the best to get if you don’t develop or have a sales staff =P. And they tend to be shorter names, up to two words, dot com, and very expensive to buy =O
The Best Way to get Started (AND SUCCEED) in the Domaining World:
1. Never use money that you don’t really have to hand reg domains. (i.e. a domainer with a credit card on file at GoDaddy is a very bad thing.)
2. Only invest in domains in the aftermarket that have verifiable traffic. Be sure to look at more than 30 days of stats. Make sure you really know what your buying and verify who you’re buying from. Ask around, you’ll be surprised who all knows who in this arena.
3. If you do think that you have an original idea for a domain name and the domain is still available – SLEEP ON IT. If the name is still available that next morning and you feel just as passionate about it as you did the night before, then by all means go for it.
4. Don’t be too greedy when a buyer comes along with a decent offer for one of your hand regs. Not every domain is the golden child, like Aron (XF.com) said, “…you can’t be attached to any names… they are all a means to growth.”
5. Less is more. Just because you have thousands of domains does not = success. You can blow $10,500 on 1500 $7 hand regs (+ the annual renewal fees) or take that $10.5k and invest it, like a smart domainer would, on a domain name that you really want and that you know gets some decent traffic. There’s a reason the domain industry’s leading trade show is named TRAFFIC (in all caps.)
So yeah, like Patrick said if you’re just getting your feet wet in the domain game, kick back for a while, read the blogs on Domaining.com and DNheadlines.com, lurk in the forums, study DNJournal (also check out DNJournal’s sister site http://www.namenewbie.com ) eventually you’ll see just how this game really works and who the key players are. You’ll be all the more wiser because of your patience.
It’s never, ever, ever too late to invest in domains, just be sure to cross your t’s and dot your i’s, you’ll be all the more glad that you did. Domaining is all about taking calculated risks at just the right time. Knowing the playing field is the only way to achieve this.
OK that was long.. I’m crawling back into dead domainer mode.
Awesome points by Jamie… I’ll throw in some more:
1) if you do dive into the forums and start to follow individuals and threads, don’t get sucked into pattern domain buy-outs, like the LLLL.net, L-L-L.com, NNNNN.com these have all come and gone in a -very- short time. You can always find a couple individuals heavily investing in this or that pattern… let them, or better yet, sell to them… =) The bubble may only last about a month if everyone’s lucky and then … poof!
2) when you ask for appraisal and get the answer (reg fee), that’s a euphemism for zero — the domain as $0.00 value.
3) if you ARE registering available names, don’t count on fellow domainers to be interested, but instead learn Wordpress and some SEO (for minisites) AND/OR sending lots of sales letters to potential buyers
I would also recommend learning at least one niche inside and out and trying to profit in that niche to then parlay those profits into other niches. For example, Chef Patrick specializes in, among other things, real estate related domains as he has previous experience in real estate and has helped other real estate professionals with domain name choices. If you can become and expert in a particular niche (and even better a niche that is profitable) then that can be a key for success as a domainer. – Joel
This blog post should be stickied =)
You can run niches the other way… like becoming good at using merchant affiliate product feeds, that way you can stand up a product site (store, or thin affiliate site) for nearly anything selling on the internet.
Thanks for the comments guys. You all have great points and tips.
I can’t take credit for this article, it’s all Morgan Linton from Domainvestors.tv. He has been very helpful providing me with a couple articles during my move.