Getting Started In The Domain Business

Like any other business getting started in the domain business takes careful planning if you are to profit from it. Although if you take your time and research some high traffic niches, get familiar with how to buy and sell domains and how to market your names then it is a business that can be started with a small initial budget. The thing to realise is that you won’t make it big overnight with the domain business, not unless you have some hefty investment capital to plough into your first purchase (and of course have a buyer lined up for said purchase!).

Plan Your Domain Buying And Start Small

As I said above, like any other business, you need to carefully plan out how you are going to enter the domain business. Are you going to target product domains? Are you going to buy short, brandable domains? Are you going to buy 3 character domains? What capital do you have to invest? There are many niches to consider. Trying to jump into all of them from the start is most likely going to lead to a failure. Focus on one area, and start small.

You can research using keyword tools for the “exact” type in searches for phrases, then try and hand register any which have potential. Exact type ins tend to have more value than a broad searched term. At first it’s advisable to stick with .com domains, or at a push .net if the keyword or domain name has high exact type ins. You can also try catching dropped or expired domains using services such as Drop Day or Fresh Drop allowing you to view domains which others are letting expire and you can sometimes catch them in auction for less than a couple of hundred dollars. GoDaddy also has a domain auction section where you can watch and bid on domains due to expire.

Before you buy any domains take some time to look at the market for each one you are thinking of buying or bidding on. One of the main mistakes most new to domaining make (and one I have made several times) is to buy a domain in a niche which has some reasonable exact search levels, but not so many “long tail” searches associated with it. A domain with exact searches of say 1000+ per month along with many variations of the same phrase has more value to a potential owner. For example lets say you were to buy petcareguide.com (example for article sake) it would hold more value if there were reasonable levels of searches for associated terms like “dog care guide” “cat care guide” etc. This means you could build a website with sections targeting more niches within the main search term thus gaining more traffic.

There is also a market for short brandable names and 3 character names. With the current explosion of the internet and increasing traffic levels also comes opportunity to create a brand for your company or website. Short pronouncable names can have value, even if they are not a dictionary word. Who would have thought that “Google it” would become a term that we use in every day life to mean “go search online”. There is also a market for 3 number and letter domains, mainly from the Chinese market. (you can view and sell domains like this at 4.cn). Because search engines still use latin characters and numerals areas such as China and Japan need to build sites upon easy to remember domains. A name such as 000.com (example) would be fair easier for someone not fluent in western languages to remember than “webhostingforchina.com”. You can use domain catching services to bid on these type of names, and using services linked ealier like dropday.com allow you to search for domains with set amount of character which are about to expire. If you pick up a name such as LETTERNUMBERNUMBER.com for cheap it’s possible to quickly flip the name for multiples of what you paid for it, however take sometime to research what is currently selling best. Not all short domains have great value, and you may sit on some purchases for quite a while if you buy the wrong ones.

Selling Domains And Marketing Them

There are several ways to market a domain name for sale, and this is also where your creative internet marketing skills will com in handy. It is essential to list domains for sale on established auction and broker sites like Sedo and Afternic. These services are free (although sometimes there is a small yearly charge to list domains) to sell your domains and you only pay a percentage when a sale is completed. They offer an escrow service so that your domains and funds are transfered safely avoiding the sharks and scammers. There are also many, many other places to list your domains for sale. A good point of referance is the Domaining.com network which offers news and services for people in the domain business. They also have online tools like Valuate.com which can give you a quick online appraisal. However, this service will only give you an estimated value based on current search trends. Real value from a domain is determined by supply and demand within any niche, a domain is only worth what a buyer will pay for it so if your domain is in an area of high traffic and high competition there is a good chance a domain with high exact type ins will be worth more than an online estimation to people doing business in the niche.

Aside from using already established domain brokers you can use your own internet marketing skills to advertise your domain for sale. Some ideas could be to find forums where other domain buyers hang out and post with a link to your domain lists in your signature, maybe another domain buyer knows a customer he can sell one of your names to. Also you can go through some of the companies on page 2,3,4,5 on Google for the search terms related to your domain and send them an e mail that your domain is for sale which would help their online business. There is also the option of finding owners of similar domains through who is records and mailing them offering the domain for sale or auction. Use your creativity, there will be tons of other methods for promoting a name and maybe you have that great edge which no one else is exploiting. One method an friend implements is to create a one or two page website for his exact type in domains with some unique useful text content, he adds a few back links here and there and gets them onto the top 2 or 3 pages in search results. You can then add “this domain is for sale” with a link to your listing or direct contact details. He sold a fair few names using this method, but I guess he is an experienced SEO and developer so making a mini site for the name takes him less than an hour.

Listing Your Domains For Sale And Pricing Them

Now this an area where many in the domain business shoot themselves before they even get started. No doubt when you first browse around auction brokers like Sedo you will see domains for sale at silly minimum offers like $3000 for names which have very little type in traffic. Unless your domain is a category or niche “killer” and is the exact term that thousands of people are searching for each month then reality is you are not going to do yourself any favors by sticking an inflated price on your listing. The best way to list your names (in general) is subject to offers, when you receive an offer you can always counter offer and negotiate a price with the buyer. Also you can decline any offers and listed domains displayed with numbers of offers next to them also attract more attention from potenial buyers browsing. Be smart and consider offers but also don’t sell yourself short. A counter offer around the high end of what you would part with a name for is a good place to start your negotiations. At the end of the day this is a business and if you can sell a domain for many times the price you paid for it then it’s a good deal and money in the bank but be aware there will be buyers who try their luck to get your names on the cheap.

If you end up directly speaking to buyers via e mail make sure you are not over friendly and too forthcoming. The best practice for selling a domain is to seem like you are not really bothered about selling the domain in the first place. This might sound mad but if the buyer gets the impression he is going to have to work hard to get his name then usually the offer and sale price will be more than you would get by being forthcoming and easy to negotiate with. Be short but poilite, comebacks like “Thanks for your offer but this is short of the current asking price.” leave the door open for the buyer to make a second offer. When you get near to your ideal price or a level you are happy with then you can be more forthcoming.

Making It In The Domain Business

To make it big in the domain business you will have to be shrewd, tough and also be prepared to learn. It’s not a job for those who want a get rich quick plan (although you may just get lucky!) it is a business which needs some dedication and time spent researching and learning the trade. Domaining is a great work at home idea if you have some time and capital to invest but it’s also a minefield for those who don’t spend time learning what sells and what doesn’t. Read domain blogs, looks at auction sites and see what type of names are getting offers, get familiar with keyword tools and how to research competition in search engines. Once you have those skills then you stand a good chance of marketing your domains to the correct audience thus making profit from the domain busness.

Comments and questions welcomed on anything which is not clear or needs more explaining.