To Make Money Investing in Domain Names, You Have to Put The Time In | DomainInvesting.com

To Make Money Investing in Domain Names, You Have to Put The Time In

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I am frequently asked how I know what names to buy so I can quickly re-sell them. The quick answer is that I do quite a bit of research and market intelligence. Unfortunately, it seems that many people love quick answers, but they don’t actually enjoy (or just don’t have the time/desire) to put the work into doing the research.

I spend quite a bit of time researching who is buying what names. I do my homework to try and find out approximately how much they are paying for these domain names. I review sales reports, past sales, and sales listings to try and find the prices paid. I pay close attention to patterns and when I see a pattern forming, I try to get ahead and search for similar domain names to buy at better prices. If I know someone is buying Car related names and is paying $10,000/each, I try to find similar names for much less.

One of the keys to this is knowing what is similar to names a company is buying and what is rubbish.  UsedCars.com is great, CarsUsed.com does not make sense to me. Similarly, UsedAutomobiles.com may be good, but not even close to UsedCars.com. To know what’s good, I research search volume, the number of results in Google, but I also use my brain. Does CarsUsed.com or UsedAutomobiles.com really sound nearly as good as UsedCars.com? No. For all the tools I use, I think my brain and the gut feel I have is superior.

When I am buying domain names, I am taking on all the risk. I could just ask the owner to broker a similar name I think a buyer will like, but that will net me 10%. Taking on all the risk can net me a lot more than that. The downside is that I could get stuck with the name. That’s where the gut feel comes in to the equation. If I buy a name for $5,000 with the hopes of selling it for a lot more, my gut tells me that even if I have to cut bait, the loss will be none or small. I know enough about good names to know that if buyer A doesn’t want it for my price, I can find 10 other buyers that will want it, although my sales price may not be what I first thought.

For a few hours each day, I scan drop lists, read sales newsletters, scour aftermarket sites, and do Whois lookups to see who owns what and who is buying what names. Selling great names is not difficult at all. Knowing what names to buy and at what prices is the hard part. If you have and own truly great names, you will have no problem selling them. The only issue is determining a price that makes sense for you.


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 (36)

    Rich

    Elliot@
    That my challenge,to determine the price.I have learn to buy domains and know what’s good and not so good,but the hardest thing is to price them.

    August 11th, 2011 at 3:39 pm

    Elliot Silver

    @ Rich

    Pricing is tricky, but I have a feel for the minimum I could sell it for on the open market, and I try to pay as close to that as possible. Even if I can’t get my ideal price, I should be able to make a profit.

    August 11th, 2011 at 3:41 pm

    Rich

    btw Elliot,
    This was a great article for me.Thanx

    August 11th, 2011 at 3:42 pm

    Elliot Silver

    @ Rich

    Thanks – and thanks for reading/commenting.

    August 11th, 2011 at 3:43 pm

    Adi

    It’s a Long Way to the Top If You Wanna Rock ‘n’ Roll!

    This is very similar to any other form of investment. Would anyone invest in a company just because the guy next to them invested $10 000 without reading and doing some research??? I hope not.

    Great article!

    August 11th, 2011 at 4:00 pm

    Samit Madan

    Yeah, it’s a toss up, you can either put in the time and research or pony up the cost of doing it to the person who does do it.

    Time = Money.

    How exactly do you go about researching who’s buying what… or is this a function of being where you are in the whole scheme of things?

    August 11th, 2011 at 4:34 pm

      Elliot Silver

      @ Samit

      Reading sales reports, doing Whois lookups, and meeting people at conferences and other events. It’s much easier to make a deal with someone you’ve met before or who knows you.

      August 11th, 2011 at 4:39 pm

    Leonard Britt

    While buyers prefer fixed prices, I have had several sales in the last year where afterwards I felt I had underpriced the domain. While one needs cash to fund purchases and renewals, perhaps on higher-end domains one should leave price open or price more fully. High-end buyers are likely more focused on quality anyway.

    August 11th, 2011 at 4:43 pm

    Poor Uncle

    Once again, with a great memory, some guts, and some fundings, the glory is yours. The only thing that is more desirable than good memory is perhaps good lucks. :)

    August 11th, 2011 at 5:08 pm

    Josh

    There really is no substitute for putting in an optimal number of minutes of actual work day after day, and figuring out a routine/system that works for you through trial and error. A lot of people talk about working 15-18 hour days, but I often wonder how many actual productive minutes they work on average each day.

    August 11th, 2011 at 5:23 pm

    Elliot Silver

    @ Josh

    Much of my work isn’t really productive, but I do get ideas for domain acquisitions in random places.

    August 11th, 2011 at 5:24 pm

    Adam Dempsey

    What if you end up not being able to sell a domain? Would you then keep it and make it into a site?

    August 11th, 2011 at 6:13 pm

      Elliot Silver

      @ Adam

      In the past probably, but now I just hold.

      For instance, I didn’t sell BoracayHotels.com for the price I wanted, so I am hanging on to it. I’ve received several offers, but not enough to sell it. That being said, a few of the offers I’ve received were profitable offers, but I don’t have the need to sell it thanks to my evolving business plan http://www.domaininvesting.com/30000-foot-overview-of-my-business-8934

      August 11th, 2011 at 6:16 pm

    Adam Dempsey

    I’ve recently started to build up a (what I think is good) portfolio of domains, and with most of them i’m not sure wether to try sell them or work on them.

    Do you just email a few people who you think might be interested in the domain?

    August 11th, 2011 at 6:21 pm

    Elliot Silver

    @ Adam

    Yes, but I am talking about names like DelrayBeachRealEstate.com, BikeTours.com, and PaymentProcessors.com. I think the names have to be good to get attention and results.

    If you don’t know if you want to develop, you probably shouldn’t. Development just to develop is a waste of time and money. That’s something I’ve learned in the last few years. I’ve spent plenty of time and money on domain names I didn’t sell and developed instead, and many languish. For instance, AthensVacations.com made very little revenue before I sold it. It wasn’t a good use of my time.

    August 11th, 2011 at 6:24 pm

    Adam Dempsey

    Yea a lot bigger names that i’ve picked up, but good point about use of time, I think I’ll look into the value of what I’ve got.

    Most of the ones I’ve picked up are co.uks, managed to get ResetPassword.co.uk for reg fee which I was quite impressed with!

    August 11th, 2011 at 6:32 pm

    Elliot Silver

    @ Adam

    How do you see that being used, and alternatively, who do you think would want to purchase the domain name?

    August 11th, 2011 at 7:09 pm

    Adam H

    Good post. In addition to reviewing weekly sales charts, I was curious as to what past sales database you use? (e.g. NameBio, Domain Tools, DNSalePrice) Those are all decent, but do you know of any better? Thanks.

    August 11th, 2011 at 7:15 pm

      Elliot Silver

      @ Adam H

      My head… I tend to remember sales I read about. Aside from that, those sites and DN Journal are the ones I use the most. Also if I recall a domain name selling or being put up for sale, I will search Google for the domain name in quotes along with domain sale or domain auction. Usually I can find references to when it was in auction and/or if it sold.

      August 11th, 2011 at 7:17 pm

    Morgan

    Great post Elliot and such an important point to make. So many people see Domaining as a get-rich-quick scheme when it really is a business, takes time, and like most things in life worthwhile, requires real research and analysis.

    All the folks trying to make a fortune with domains spending only one hour a week should take heed, and read this post at least twice!

    August 11th, 2011 at 9:03 pm

    good

    Good post Elliot. People should listen to Elliot very carefully imo. He flips like mad and successful

    Go to MorganLinton.com talk on hype on brands.

    The true flippers, direct navigation keep on playing and know things very well

    Excellent Elliot

    August 11th, 2011 at 9:05 pm

    Poor Uncle

    @Morgan,

    Those who are serious about making a fortune in domains probably don’t read this blog let alone spend an hour a week. :)

    August 11th, 2011 at 9:16 pm

    Steve M

    But … but … but … you mean I can’t get rich from reading blogs?

    Plan B here I come … 😉

    August 11th, 2011 at 10:11 pm

    Kannan

    Thanks for sharing some valuable insights.

    August 12th, 2011 at 3:29 am

    picas

    Eliot is kind hearted to share valuable things ..if I was him …not a word ..

    August 12th, 2011 at 4:26 am

    Adam Dempsey

    @ Elliot
    If I were to keep it as site reviewing password tools that clear windows passwords etc with affiliate links to them.

    For someone to buy possible the developer of one of those bits of software maybe?

    August 12th, 2011 at 6:20 am

    mohammad

    Good post, thank you Elliot for sharing your valuable information.
    Do you recommend for putting list of good domains in public place like this blog ?
    I think with doing these you can not find that a bidder for your domain is an end user or a domainer.

    August 12th, 2011 at 8:40 am

    Amanda

    Thanks so much for the excellent post. Lots of good practical tips in there.

    You mentioned in the post that for domain pricing you get a feel for the minimum you could sell it for on the open market.. What tools or info do you use to get that feel?

    Btw, any direction is appreciated. Pricing names properly is the hardest part of domaining imo.

    August 12th, 2011 at 9:37 am

    Elliot Silver

    @ Amanda

    Mostly based on a gut feel… I review and research domain names for hours and hours a day… that’s essentially what I mean with this post. It’s not really something you can just know. I have gained a competitive advantage because of the amount of time I’ve put into researching.

    August 12th, 2011 at 9:40 am

    Jason Davis

    Good post. I think all the info available out there is good and can help make informed decisions but for me, the biggest asset available is your gut and the bell that starts ringing in your head when you see the right name and hopefully at the right price.

    August 12th, 2011 at 11:46 am

    Elevator

    Eliot, thank you for your many good posts. However, in this post you mentined seaching for who owns a particular domain. What exactly you consider about who owns a particular domain? Pls respond! And what do you think about this domain? NumericalAperture.com. Thanks a ton.

    August 13th, 2011 at 12:53 am

    Not Offline

    That’s just awesome how you guys have managed to build that great ‘spidey sense’ for domains. I am quite preoccupied with a lot of other works outside of domaining but I do hope I get to garner that kind of eye and knowledge to acknowledge the great value and potential a domain can have. Luckily, I have posts to read from bloggers just like you. Really helpful insights there, Elliot.

    August 13th, 2011 at 6:05 am

    paul

    Elliot, Tx for your cogent postings.

    Could you share where one may more closely follow prices paid for domains and websites. I am only aware of DN Journal and Flippa.

    Tx
    paul

    August 14th, 2011 at 4:42 am

    Moncler

    Could you share where one may more closely follow prices paid for domains and websites.

    August 15th, 2011 at 12:53 am

    Moncler

    Eliot, thank you for your many good posts. However, in this post you mentined seaching for who owns a particular domain. What exactly you consider about who owns a particular domain? Pls respond! And what do you think about this domain? NumericalAperture.com.

    August 15th, 2011 at 12:54 am

    New to Domain Trading

    Hi,

    I considering trying out protrada software,coaching and etc. Costing AUD3000. Isn’t that a bit too pricy. Could I do Domain trading without this software.How difficult would it be for some one to learn and excute Domain Trading without help of software and coaching,

    Thankyou

    September 11th, 2013 at 9:15 am

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