My Domain Acquisition Process | DomainInvesting.com

My Domain Acquisition Process

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I want to share some personal insight into my domain name acquisition process because I thought it would be interesting for you to see how I evaluate domain names and decide what to do with them. It might still be a bit opaque, but it is an off the cuff analysis.

For the most part, I buy domain names either in private or at NameJet. I don’t do much hand registering these days. In fact, I might hand register 50 names a year, and that is probably an aggressive number.

Typically, I will focus on specific verticals for my acquisitions. For instance, I was recently attempting to buy doctor and medical specialty related domain names. I spent time researching types of doctors and practices and then highlighting the keyword domain names I’d be interested in buying, primarily based on the marketability. For instance, doctors that are more patient facing would be have domain names that are more valuable in my opinion. I put together a list of specialist .com names, which included variations such as -ist.com, -ists.com, and -ogy.com domain names.

I do many, many Whois searches using DomainTools to learn more about these targeted domain names. By doing this research, I am looking to see who owns the domain name, if it’s listed for sale anywhere, and how the domain name is being used. I also like to see how many other extensions are registered and being used. Generally speaking, the more TLDs registered the better. This is because if a doctor is using a .info for his website and someone else is using a .org, the .com is probably worth much more. It also means more prospects that may wish to upgrade if given the opportunity.

I eliminate the domain names that look like they are frequently updated and/or active websites. There is no reason to bother people who have busy schedules when there is no indication that the name is for sale. I do like contacting people who have undeveloped, inactive, or “old” websites. Sometimes I make a blind inquiry just to ask if a domain name may be for sale, and other times I make an offer. When making an offer, it’s based on a gut feel. I make a reasonable offer, but it’s at a level I would be comfortable buying, with the idea that I can sell it profitably. There’s no science to this – just a gut feel, which is based on many factors.

Every purchase I make is speculative. In my example, I am not a medical expert, so perhaps I will buy a domain name that doesn’t have much commercial usage. My feeling is that if people and businesses are advertising in Google and there are solid search numbers (from the soon to be disappeared Adwords Keyword Tool), the matching .com domain name probably has value. You can also use Estibot as sort of a “gut check” to make sure the automated appraisal gives it some value.

I use the knowledge that not everyone knows how to contact a domain owner (especially if it’s not listed for sale), which may establish a negotiation with someone who hasn’t been bombarded with offers in the past. I believe if I can buy a valuable off-market asset, I can use my knowledge of contacting prospective buyers to facilitate a sale.

It’s a busy weekend, but I will try to answer questions if you have them. I certainly welcome your thoughts on domain acquisitions and how you go about doing them,


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (19)

    Adi Weitzman

    Hi Elliot,

    I’ve heard you mention this gut feel a number of times. Can you give more insight into this. I have tried to be names based on how I feel about a name but I would love to hear more about the validation process.

    July 19th, 2013 at 11:47 am

      Elliot Silver

      It’s hard to say. I don’t think I can help someone get a gut feel for something by sharing what goes into it.

      I watch sales, inquire about a lot of names to get pricing insight, and I see how others price their names.

      Similarly, real estate agents get a gut feel for the market in which they work, and the MLS helps them verify their intuition. There is no MLS-like database to be able to determine value with domain names. Every domain name is different.

      July 19th, 2013 at 11:51 am

    Anon

    Asking someone to quantify ‘gut feel’ is one of the more amusing questions I’ve seen asked.

    July 19th, 2013 at 11:56 am

      Adi Weitzman

      Yea pretty stupid I’ll admit. I guess what Im looking for is what is a quality name. I still dont get it.

      July 19th, 2013 at 12:01 pm

      Perry

      Thanks for the insight, Elliot. Do you use any tools or have any systems to track your inquiries and help you navigate your gut feelings?

      @Adi – Elliot mentioned how the number of registrations in various TLDs is one of many factors that goes into his calculation. While you can’t quantify a gut feeling, seeing other businesses use sub-par TLDs for their business address helps in valuations.

      July 19th, 2013 at 12:08 pm

      Elliot Silver

      Only Gmail and MacMail. When I enter an email address I’ve contacted before, it lets me know. I can then search Gmail to see when I used that email address in the past.

      July 19th, 2013 at 12:09 pm

      RaTHeaD

      a quality domain is a domain of quality… it sings like music in your ears and you remember it without trying. it is meaningful without being pretentious, stupid, or EDGY. don’t worry about captains of industry not getting it… most domainers don’t get it either.

      July 19th, 2013 at 12:16 pm

    CN

    It is quite an interesting process that you follow. But for most end users / new comers like me I guess “gut feel” or “gut check” does not work! I strongly believe that its the end users perception about what a domains value is and what he is ready to pay. Most of my developed domains do earn me money but when I go out to sell a domain I find that there is hardly anyone interested yet find domains sold in the market at ridiculous valuations at times. I hardly care about the estibot or automated valuation machines these days and only refer it once in a while so that it gives me a feel good factor that my domains have XXXX or XXXXX value! But when I go out to sell its not even AAA on offer! I have been in the IT Industry for over 14 years now and I strongly feel that investors / venture funds out there like “dressed up” figures rather than real figures. If you show them a rosy picture, you can easily rake in XXXXX for any domain or get the investments you want. But tell them it will take you 5-10 years to reach that figure and they go “oh well”. Which all boils down to the end buyers perception where my entire topic began.

    July 19th, 2013 at 12:17 pm

      Elliot Silver

      That’s why I recommend that newcomers read all they can and learn as much as possible before spending money on domain names.

      If you wanted to invest in the stock market, I doubt you’d go out and just randomly buy stocks. You wouldn’t get into real estate investing by opening the newspaper and buying a random listing – or going out and buying a piece of undeveloped land off the highway without any knowledge about it.

      Domain names have a low cost of entry, but that doesn’t mean they are safer investments.

      July 19th, 2013 at 12:20 pm

      CN

      I wish there were some good learning tips anywhere.

      The domain industry has no specific reference points or some good base / methodology based on which a domain is valued at X amount.

      When we talk of stocks or real estate investing, you have multiple reference points and all well documented.

      I consider investing in domains like a sweepstake / gamble because you never know what you could get out of it.

      With stocks or real estate investing you have various parameters like EPS / Dividend Yield, Industry Growth, or Area Value, Area Sales and so on.

      I understand any kind of investments are risky and it could hit a jackpot or be of no value. But I would in the long term love that the domain industry have some basic methodology based on which domains are valued or invested into thus giving better long term returns to investors and more people could consider it in their portfolio.

      July 20th, 2013 at 12:14 am

    Hugh

    Thanks Elliot for sharing your process.

    July 19th, 2013 at 2:36 pm

    Ms Domainer

    *

    When searching to see how many TLDs are registered, it also pays to know if the same owner has the domain in many of the major TLDs.

    I have one name that I own in the major TLDs, including .me, .co, and .us.

    I don’t do this with all my domains (I’d go broke fast), but many end users will reg their brand or company name in the major TLDs to protect their TMs.

    So I would say that, in this case, worth of name may or may not be valuable.

    *

    July 19th, 2013 at 2:54 pm

      Elliot Silver

      I’ve done the same when I had the opportunity to buy .net or .org cheap. It’s a nice “throw-in” if you are in advanced stages of negotiating and can’t get to the final price you need. Saying, “If you come up to my asking price, I’ll give you the .net/.org/.whatever, too.”

      July 19th, 2013 at 2:56 pm

    Nadia

    A few things I’ve picked up:

    – If you come across a couple of names with similar keywords that are expiring that show the same name in the WhoIS, that’s an indication that the particular person or company might be dropping a bunch of names in that vertical. Because people tend to go on registration “sprees” and reg a bunch of names all at the same time, the dates will be within a few days of each other. I’ve noticed this a lot when doing manual searching and on marketplaces, when it’s clear the company has made a conscious decision not to renew the names for whatever reason, and in addition to the 1-2 names you stumble across, it turns out they’re dropping dozens or more (which you can then search for).

    – If the .net/.org/etc. and most of the major ccTLDs are taken, but for some reason the .com has recently become available, that’s great. If the .com has several years of registration on it, even better.

    – I like to have DNSaleprice, Namebio, and DomainTools open in tabs so I can see who’s owns what and what certain keywords have sold for in the past.

    July 19th, 2013 at 4:38 pm

    Easy Names

    This is a classic domain business strategy..
    Well, we heard them overe and over and many of us have done that ..
    But what really needs to be spiced up is how you contact the buyer or sellers ? If you spill a fresh beans then .. You might be consider as Savior ..

    Have a Good Friday :)
    And don’t forget to wave at Saturn
    http://saturn.jpl.nasa.gov/news/waveatsaturn/timezones/

    July 19th, 2013 at 5:28 pm

      Elliot Silver

      Simple as Whois lookups and Historical Whois lookups.

      July 19th, 2013 at 6:26 pm

    Mike

    How fast do you usually turn these around and flip them? What is the best price point to purchase for the best profit percentage sale? When you sell, do you put anything on the domain, like a one page site or something?

    July 19th, 2013 at 10:25 pm

    Arseny

    Elliot, thanks again for sharing your advices with the crowd.

    With all the comments about the “gut feeling” pouring in, I’d like to share my understanding of that phenomena:

    Gut feeling = Experience X Knowledge

    Where:
    1. Experience is formed through the years in the industry by the number of contacts with a buyers made + number of sales closed.
    2. Knowledge is formed by keeping in mind domain sales statistics + knowing the verticals, industries, decision makers who buy most usually.

    I guess both Experience and Knowledge can be formed only keeping your finger on the pulse

    July 22nd, 2013 at 3:26 am

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