Ze: "A Few Things to Think About When You Buy a Domain" | DomainInvesting.com

Ze: “A Few Things to Think About When You Buy a Domain”

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Many people shared their domain acquisitions in the comment section of an article I posted yesterday where I shared some of my recent domain acquisitions. I think posting is a good way to give some further insight into my business and it may also be a good way for others to share and learn as well.

In response to some of the domain names that commenters listed, someone named Ze shared some good advice about buying domain names. I am not sure if Ze is someone’s name or if it’s a pseudonym, but the advice is good and well worth a review, especially for people who may not be making significant sums of money or to those who are just starting out.

This information was poached from his more extensive comment, but I think this is the most beneficial insight from the comment.

A few things to think about when you buy a domain:

- How much do you know about the industry on the domain you’re buying?
- Do you have a clear plan for the domain you are buying?
- Sell or develop?
- Sell to another domainer or to a end-user?
- Do you have a strategy to find end-users?
- Do you have a strategy for reaching out to end-users?
- Are you familiar with other end-user sales in the same industry to help you gage the value on your domain and ask for the right price?
- Are end-users in that industry even interested or understand what domains are, as an SEO asset?
- Will you need to educate the end-user?
- Do you know enough to do it?
- How and where do you get the supporting data?
- Is the domain a brandable or a searched for, single or set of keywords?
- Is it spelled absolutely correctly? (not backwards, sideways, with extra ‘S’s” “I’s” or “X’s”) – Is it plural when singular is best, or singular when plural works best?
- Do you have domains on similar categories?
- Is it a .com, or at least a TLD in which the domain fits well?
- Have you defined your investment niches and does the domain fit on any?
- Are you familiar with the stats on the keywords (if any)?
- Do you really believe someone out there will come out of the woods in this stage of the economy, and give you many times over what you paid for your brandable domain name? – the news about these sales are exceptions – not the rule.
- How many of these bets on brandables are you making? – if it’s the majority of your portfolio – get ready to loose some cash.
- For how long are you willing to hold on to your domain before you let it drop?
- How long does it take you to research, find and reach a list of potential buyers?
- Is your time on that specific domain worth it?

— i could go on and on.. and on…… and on… and don’t get me going on a check list for domain developing… It get’s technical, extensive and somewhat expensive.

Doing the research and finding the hidden gems, or participating on the right auction at the right time, with just the right amount and type of bidders, takes a lot of experience. Not luck. Are you investing on luck alone??

WAKE UP!! Do your homework on every domain you buy and stop buying crap.


About The Author: Elliot Silver is an Internet entrepreneur, and he is the publisher of DomainInvesting.com, a website that shares domain investing news, insight, and strategy. 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 (18)

    BullS

    I express my feelings via domains.

    I sure miss my Bullshitdomains dot com as I sold it for $$$$

    You see, if I tell you your website is ‘BullS” take notice.

    If you cannot handle the truth, then that too bad.

    LOVE DOMAINS..

    October 27th, 2012 at 1:05 pm

    Acro

    A quick note on what I do – without giving away the “secret sauce” recipe. :D http://acro.net/blog/domains/my-domain-valuation-methodology-part-1-as-a-buyer/

    As always, people have success with different aspects of domaining, so your mileage will vary.

    October 27th, 2012 at 3:30 pm

    Adrian Keys

    Sometimes I really don’t know what to make of the Domain industry. Ze could just as well hand me a post with the same advice about stocks or the housing industry.

    Will people stop buying crappy stocks and homes in markets going nowhere? I don’t think so…

    Ze’s points are well taken but just wonder sometimes about the overkill warnings.

    The same people who are seen as pioneers would have been nowhere today over-thinking their acquisitions.

    October 27th, 2012 at 3:42 pm

      Elliot Silver

      If you can’t tell the difference between a good stock and a bad stock, you shouldn’t be investing in the stock market. Wise investors know their shortcomings, and when it comes to the stock market, they have professionals invest on their behalf. I hardly ever buy stock on my own, because I’ve learned that I’m not good at that.

      October 27th, 2012 at 3:48 pm

      John

      I feel sorry for you Elliot because you rely on “professionals” to invest your money. I did it for years too and these
      “professionals” almost made me bankrupt not once but twice so I decided that I can loose it myself and why should I pay them for it.
      Well in the last 6 years I average 35%
      return on my money so show me another
      professional investor who can do the same
      but I am not as good buying my domains.
      I think I soon will be out of buying domains. I can not make any money with it so it only show that if you are good at something it does not mean you are good at everything. Domains are definitely not for me

      October 29th, 2012 at 11:41 am

      Elliot Silver

      If I wasn’t doing well enough with my non-domain investments, I would find someone who would do better. Luckily, I have a competent financial advisor.

      October 29th, 2012 at 11:43 am

      John

      So you call a competent financial advisor who makes you 5% – 10% a year ?
      These “competent” financial advisors are a joke and they are suppose to be smart.
      I had a pleasure once sitting on a plane next to one of them. We started talking and he told me that he was going to see
      one of his wealthiest investors. When I asked him how was he doing he told me very proudly that He is very good at it because (I forget exact numbers but you get the idea) he lost only 7% and at the same time Dow Jones lost about 15%
      I stay away from these useless individuals

      October 30th, 2012 at 2:36 am

      Elliot Silver

      Who said anything about what returns I am seeing on my non-domain investments? I didn’t, and I think you are trying to be argumentative for no reason.

      October 30th, 2012 at 7:30 am

    Elliot Silver

    If you can’t tell the difference between a good stock and a bad stock, you shouldn’t be investing in the stock market. Wise investors know their shortcomings, and when it comes to the stock market, they have professionals invest on their behalf. I hardly ever buy stock on my own, because I’ve learned that I’m not good at that.

    October 27th, 2012 at 3:46 pm

    deano

    Absolutely Adrian, and since the person gave nothing about themselves or their success and basically recited what everyone should already know it means little.

    I am off to a math blog to tell the masses that 1 + 1 = 2

    October 27th, 2012 at 5:05 pm

      Elliot Silver

      I agree with much of the advice that was given, and my company’s investments are no secret (I had a late start, too).

      There is no magic potion to making money in the domain business. It takes time to learn what has value and what doesn’t.

      October 27th, 2012 at 5:22 pm

    Vegas Lover

    The business of domain is the business of DESIRE.

    There. I’ve revealed it. THE SECRET SAUCE.

    I’ve done well for myself by focusing on that.

    Since I like to travel, domaining has afforded my a lifestyle where I can be anywhere and still make money

    Love it!

    October 27th, 2012 at 8:47 pm

      rob sequin

      Right. I see it all the time.

      Whether buyer or seller, it’s all about the passion of the idea and the size of the vision that makes people spend a lot of money on domains.

      I would say that MOST of my sales and brokered domains (for seller, somewhat less for buyer) are parked.

      This means the buyer had a great idea and was passionate about the domain at the time but never did anything with it.

      I sold a domain for $10k in like 2002. The buyer told me he was taking out a credit card advance to buy the domain.

      The domain has been parked now for 10 years.

      … and ah, no. He is not making enough in parking revenue to pay the credit card bill.

      October 28th, 2012 at 10:03 am

    Elliot Silver

    Same here, although my wife doesn’t like the fact that I am always working on deals wherever I am.

    October 27th, 2012 at 8:52 pm

    Dominio

    Here are a few more to consider when looking at a domain:

    –How specific is it?
    –Is there an immediate need,like a plumber?
    –What is the exact intention(s) of the surfer when they arrive at a site.
    –How fast will surfers realize what the domain is about by just looking at the domain?
    –Does it pass the radio test?
    –How much mindshare does the word or phrase in the domain have in public use?
    –Is it a commercial or service product?
    –What can *you* the domain for besides parking? Can you use it if parking dies tomorrow?
    –Is it commercial or social?
    –Who were all the previous owners? Try to speculate why they let the domain go
    –Where do the keys fall on the keyboard? Are they easy to type like Bing.com ?
    –Will surfers expect a site behind the domain, even if the GAKT numbers look great?
    –My favorite: Is it fools gold or is it the real deal? What I mean does it just look pretty or does it have substance? You can get caught like a domain because of how it looks and not it’s substance. It’s akin to going out with a very pretty blonde girl that has nothing to say all night and agrees with everything you say.

    October 27th, 2012 at 9:26 pm

    Spike

    It’s funny how Ze never posted any of his domains. I presume he’s got pigeon “$&@*” like the rest of us. While his advice is practical as it is sound, it’s nothing that a veteran domainer(+5 years) wouldn’t already know. You can’t call everyone else out and not show what you’ve got.

    October 28th, 2012 at 9:50 am

    John

    In terms of stocks and domains
    You are both betting on future value or trading an arbitrage
    Elliot basically is performing arbitrage
    He’s got a good model down for doing it
    But, only so many short term arbitrage opportunities are available before it gets crowded out or doesn’t make sense to perform based competition increasing price and decreasing margins.
    If one has a longer term horizon they can do well. Just need to pick names that either make sense or are in a certain niche or bet on future Exact match and CPC that will increase overtime.
    No different than buying a stock on future anticipation of increased value. Only in the domain names case you don’t have a board of directors or mgmt that can dilute your holdings, reverse split it or recapitalize it and wipe one out.
    Domains are basically one year options with the option to renew.
    Definitely not a large enough or electronic enough marketplace that supports quick short term trading on a large scale. Most of us learn that painful lesson of overbuying them when first entering the marketplace.

    October 28th, 2012 at 11:24 am

    scott penton

    Very good info here, thanks. Most domains you should develop at least a blog with one post on how to contact. what does everyone think? I have “a few” domain names on my site, if interested let me know.

    October 28th, 2012 at 1:08 pm

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