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