Before Investing in Domain Names

Things You Should Be Knowledgable About Before Investing in Domain Names

11

Anyone can go out and buy a domain name or buy a portfolio of domain names. Without some basic knowledge though, it’s unlikely that a person will be successful investing in domain names. I want to share some advice on what I think you need to be knowledgable about before investing in domain names in order to make money.

Trademark / intellectual property law – You don’t need to be a lawyer, but you should know what would constitute a trademark infringing domain name and what is generally safe to own. You should also know how to use a domain name without infringing on someone else’s rights. Not knowing this can cause an expensive mistake.

Negotiations – If you want to get the most for your domain name(s) or you want to buy a domain name for a good price, you need to be able to negotiate. Whether it’s on the phone or via email, having the ability to negotiate is critical.

Domain market – It’s obvious that a domain investor needs to know how to value domain names in order to set purchase and sale prices. Getting this knowledge takes time and quite a bit of market research.

Sales and Marketing – If you are going to reach out to end user buyers, you’ll need to know good sales techniques. My personal opinion is that a great domain name doesn’t need much of a sales pitch if you put the offer in front of the right person, but a marginal to good domain name might need a bit of a sales pitch.

Market Research – Negotiations are important to get an optimal price, but you’ll need to know how to get in touch with the right person at the prospective company.

CAN-SPAM Act – If you are going to be emailing US buyers, you need to know some of the important aspects of this law. Violations can be expensive, and pleading ignorance isn’t going to help you out.

Communications – There are a few domain investors with whom I would never do business because I don’t like them. I haven’t met any of these people in person, so it’s all about how they publicly communicate and do business. When it comes to public confrontations, I think it always pays to be “Switzerland.”

Sales and purchase venues – Knowing where to buy and sell domain names is important, and knowing what you can expect at those places is also important. I know if I list a domain name for sale at DNForum, I am likely to sell it for less than if I’d list it at Afternic, targeting end user buyers.

You certainly don’t need to be an expert in all of the topics above, but it would be helpful to have a basic knowledge. Alternatively, you can probably get by if you have a good friend who is an expert in one of those topics and is willing to offer advice to you for free.

What other knowledge do you need to be successful in this business?


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.


Reach out to Elliot: Twitter | | Facebook | Email

Comments (11)

    Domains

    Good info Elliot. Happy fathers day.

    Hope this isn’t me LOL

    Communications – There are a few domain investors with whom I would never do business because I don’t like them. I haven’t met any of these people in person, so it’s all about how they publicly communicate and do business. When it comes to public confrontations, I think it always pays to be “Switzerland.”

    June 16th, 2013 at 11:13 am

    CN

    Before I comment : Happy Fathers Day!

    Well its a good list of points but I would add one more word which is Perception! How an investor or a final buyer would perceive the domain to be. You might have one of the best dictionary name or the best 2-4 letter domain yet its finally up to the end user what he thinks of the domain and for how much he buys it. I guess, as a starting point before investing similar word / vertical sales should be checked and evaluated before finalizing the domain. I have faced this many times, I have a huge portfolio of domains, most say that they are junk and can never be developed, but without any marketing or ad placements I get over 1000-1500 unique hits and all organic traffic which is rising each month. Finally, I guess if you develop a domain well and have good holding power then long term you could gain from most of the domains!

    June 16th, 2013 at 11:35 am

    todd

    HFD
    All this is true but to really understand this game you need to jump in head first and be willing to lose money to really get a good grasp of it. This business is all about doing it to understand it. Pick a niche you are knowledgable at or are passionate about is probably the best advice you can get.

    June 16th, 2013 at 11:56 am

    Ruslan

    Great topic!

    June 16th, 2013 at 12:35 pm

    irfan

    Thanks Elliot, I think what you’ve outlined here are some paramount points. But, one point I would like to put here for your review is the amount of investment?

    Assuming this article for the newbie – I appreciate if you can enlight your blog audiences about the initial value of investment through your comment.

    June 16th, 2013 at 3:59 pm

    BullS

    Happy Fathers Day SIR Elliot

    If you want to learn the board game of Chee, lose it 100times. After that you will be an expert.

    Hand reg your first 50 pigeon shit domains and let it sit for 1 yr and you will learn how domaining works.

    June 16th, 2013 at 4:47 pm

      Patti

      BullS—Crude, but true.

      June 18th, 2013 at 7:48 pm

    Sunday

    Mr Elliot,is the word Hilton a trademark because i found that there is a town named Hilton in Australia and Canada.I will want your response on this issue ASAP.

    June 17th, 2013 at 4:32 am

      Elliot Silver

      That’s a good question for a lawyer.

      June 17th, 2013 at 9:04 am

      Raymond

      It won’t be a trademark infringement if you use HILTON as a geographical town name, as opposed to a hotel name, because it’s a different trademark use/classification.

      Just like if you use Apple.com purely on purpose of selling apple fruits and drinks, there won’t be trademark infringement on Apple computer brand.

      June 17th, 2013 at 7:36 pm

    Star

    Elliot, I realize this was written a while ago, but think it now needs to be updated to warn your uneducated newbie readers to stay away from silly gtlds which offer no resale or end user appeal. For the most part, they are completely worthless and make very poor domain investments.

    June 5th, 2015 at 10:04 am

Leave a Reply

Name *

Mail *

Website