DomainsBot : How-to make profits from domains

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DomainsBot from 2000.

The original DomainsBot provided a subscription service, sharing lists containing thousands of expired domain names.

Between 1997 and 2004, the service was indispensable for domain investors, and it contained newsletters with information about domain investing.

We’re unleashing this beauty from the past and our personal archives, with a newsletter from 11/26/2000, titled: How-to make profits from domains.

The original article’s author is listed as Thomas Evans.

There’s money to be made in the domain re-seller market. That’s the bottom line. Yes, the multi million dollar names are all gone, but there is still healthy profits to be made from buying and selling the RIGHT names.

What are the RIGHT names?

The right names are the names that people will buy – at a greater price than you paid. Even if you have a great name, without buyers, it won’t sell and you’ll be lose money. Study the market, see which names are being bid on, and follow the trend.
But be careful, trends are good pointers to what’s selling, but don’t be tempted to buy up name variations similar to the trend.

A good example of this is the ForSaleByOwner.com fiasco. Although that name reputably sold for $850,000, it was followed by many re-sellers who snapped up similar names along the theme – ForRentByOwner.com, ForAuctionByOwner.com and many more. The problem was that ForSaleByOwner.com was a one-off, and the subsequent spin-offs rarely sold and many first time re-sellers were badly burnt. Watch the trends carefully, or else it may be you getting burnt.

Some domain names will always sell – one word .com words are a great buy. Other money-in-the-bank domains would be two and three letter .coms – with domains this short the fact that they aren’t proper words doesn’t matter. Most will be bought by companies to give themselves a shorter and snappier domain name to advertise.

Length is the key in the domain game – the shorter the domain name, the less chance that the prospective surfer will mistype or mispell. Remember this – it is one of the fundamentals. If you are thinking of buying a name, but it seems too long, leave it. If you considered it long, many others will.

Always buy .coms – this is another rule. .coms are the Beverly Hills, the Nantucket of the Internet. It’s the predominant domain – if a company hasn’t got a .com they’re nobody online. Other people will try to tell you that this isn’t the case – that .coms are over-hyped and that a plethora of other domains are just as good. Sorry, this isn’t the case – .com is king, and anyone who tells you otherwise is either a fool or a domain salesman. If you don’t believe me, look at the news. Do you ever read a story about anything other than a dot com?

Consider this:

The fact is, a company needs a .com address to compete online, and all companies know that the only piece of internet real estate worth having is the .com neighbourhood. There are plenty of reasons why this is so, but the two most compelling are:

1) People will type .com rather than any other (it’s human nature)
2) Both Internet Explorer and Netscape default to the .com suffix over any other – and that’s likely to stay that way.

Always buy dot com, except for some exceptions…

>> When should I break the .com only rule?

You can rarely break the rule and make a profit…. but it can be done. You can make a profit with several other suffixes, but you must be careful what you buy:

1) .net – the poor cousin of .coms, .nets were originally introduced to serve as domains for ISPs, but the market soon got congested as the .coms disappeared. .nets are still a good proposition for re-sellers as they can get good price and DO sell. Only buy one word or very short (2-3 letter) .nets.

2) .org – even less well thought-of than .nets, .orgs can fetch good money ($185,000 for Engineering.org). The key here is to buy one word domains, that could be sold to large institutes (as Engineering.org was). Anything is that vein would sell for big money because institutes probably prefer the .org to .com.

3) .co.uk – again, one word domains and short names would be the only domains worth buying to stand any chance of making a profit. Some good (not great) .co.uks have been sold for over $10,000 so it is something to consider.

4) .de – if your german is any good, buying short and meaningful .de names could be a wise investment. These usually fetch the equivalent of .co.uk prices.

5) .tv, .ws, .cc – All fairly new domains, and it’s difficult to see which of them will emerge as the top domain of the three. Personally, I believe that .cc will become the dominant suffix of the three, as it has been around longer, and it is better known. Another factor is that Beauty.cc reputably sold for $1,000,000 (there is heated debate online about whether this was a sale or not) but it has risen the profile of the .cc names. With these three domains, you shouldn’t buy just any one-word name. Choose carefully, and try to find generic terms (ie, newspaper, business, car etc). It is a little early to see where these are heading, but I suspect only the cream of the crop from these domains will sell.

So, if you want to deviate away from .coms, heed the warnings and only go for one-worders and short character names. Anything different and you’ll be left with a bunch of names that nobody will want.

>> Where do I find these good .com names?

This the multi-million dollar question! Okay, I can’t answer where you will find million dollar name, but there are resources that can help you find a name that could sell for anything between $100 to $50,000.

The first resource that you should consider is a list of the recently expired domain names. Since domain owners must renew their names every year, names become available when the renewal has not been paid. Names which are taken today, may be available tomorrow! This leads to a very interesting situation where even latecomers to the domain market can snap up great names. There are many services out there that will provide you with a list of these expired domains each week, but very few are worth investing in. This is because some unscrupulous owners separate the wheat from the chaff – buying the good names, then sending paying subscribers a list of very average names. The site I would recommend if you are interested in buying expired domains is DomainsBot.com at http://www.domainsbot.com. They differ from the other services because they send the lists to their members earlier and more regularly. This gives members a real advantage, and there are often some very good names in the lists. Their prices are very competitive, and they offer a full refund if you are unsatisfied at any time.

The second resource that you should utilise is a tool that can check a variety of different combinations of words. For example, you may enter: ‘Car’, ‘Motor’, and ‘Spares’. It would then return a list of all the different combinations of these words and their availability, eg:

CarMotorSpares.com – taken
MotorCarSpares.com – taken
SparesCarMotor.com – available
… and so on.

This means you can check a lot of names at once, as well as find names that you hadn’t even thought of. The two best known tools for this are NameSpin (which you will find at Dotster.com) and NameBoy.com. NameBoy.com is particularly good as it provides words which rhyme, and words that are related to your search words. A third site is also worth a look – SelfPromotion.com and it’s Domain name sniffer. This essentially performs the same task as the other two but allows many more words to be inputted at once.

>> So, where do I buy my .com names?

There are many, many sites that will sell you your chosen domain, but you must shop around as the prices are very competitive. The cheapest is 000Domains.com at http://www.000domains.com – they charge $13.50 for a .com name for a year. I haven’t used them so I cannot comment about the service.

Dotster.com is my usual registrar at http://www.dotster.com. They are slightly more expensive at $15 per name per year, but I find the site easy to use, quick, and the service very good.

Totalnic.net is another registrar that I have used. At $35 for a name for _two_ years, they are slightly more expensive than Dotster, and it is quite difficult to change the domain’s details once registered.

Whoever you choose to buy your domain from, remember to check that they use some sort of recognised security system to protect your credit card details.

>> How much is my name worth?

The most important part of domain reselling is knowing the difference between what your name is worth, and what someone would be prepared to pay for it. Your name could be worth thousands of dollars, but a buyer may only be prepared to pay several hundred for it. You must to decide whether to sell it cheaply, or wait for a buyer to pay your price – which may never come. Most valuations are estimates of what your domain is worth – that is, the top price you could expect from the name. Realistically, you are much more likely to find a buyer at a price of about half the valuation.

My valuation model – The Evans 10 Point Valuation System – is a highly regarded model that is ranked 2nd by the users of domain auction site AfterNIC.com. Using ten questions, you can quickly find out how much your name is worth. The model is at: http://www.afternic.com/index.cfm?a=gen&sa=proval&user=pjaevans

AfterNIC is a very good place to get a name appraised. Not only are there over 1000 valuation models to look through, but there is a real-time appraisal system where users appraise your names. These appraisals are from other domain re-sellers, so the appraisal value your name receives will give you a fair idea what it could be worth. Once you have a ballpark figure for the name, you can begin the marketing the name.

>> Where do I sell my great .com name?

There are two keys to selling domain names – coverage and marketing.

Coverage is very important – you have to get your name in front of as many people as possible. This is achieved by placing your name on as many domain reselling sites as possible – but beware! Read the small print of any contract you sign – some have hidden clauses where you will pay the re-seller’s expenses even if they fail to sell your name, others take a huge stake of the sale price. Read everything, and then read it again. You shouldn’t have to pay anything *unless they make a sale*, and when they do make your sale, they shouldn’t take more than between 5-20% of the sale price.

The exception to not paying anything before the sale is AfterNIC.com. You must pay $5 (refundable after first sale) and join as an Exchange member – allowing you to post your names for auction on the site. This is a *must*. You have to have your names on AfterNIC as it is quickly becoming the largest domain auction site on the Net. You also have the option of parking your names at AfterNIC – which essentially means that when someone types in your domain name, they arrive at the auction details of your name. This is an excellent resource because you can direct any potential buyers to your domain name, and the price and appraisals are immediately available to them.

The other site which you must have your names is GreatDomains.com. Although they work slightly differently to AfterNIC, they do get huge amounts of traffic which leads to more bids. Unfortunately with both these sites, as they get more popular it will be more and more difficult to get prospective buyers to see your names among the masses. This is where your marketing efforts are required…

Your marketing skills will probably decide whether or not you make a profit from your names. If you sit by and wait for a buyer, then you’ll fail. You need to start marketing your names to people you think may need them.
First of all, decide what industry or profession your names suit. Next, go and find these people!

– Take out adverts in ezines, trade journals, newspapers.
– Send out press releases.
– E-mail, phone, and send real mail to these people.

Don’t spam them, but let them know that your name is available, and that you are willing to sell it. Sometimes it works better as a press release, other times a personal letter may work – but the golden rule is this – NEVER tell them a price. If you tell them a price immediately, you will receive rather harsh emails back. Simply tell them where to view your domain name auction details (it should just be your domain name URL if you have parked it at AfterNIC) and see what happens.

Target the right people, get the message to them, don’t overprice the name, and you should find a buyer. Remember, you bought the name for $15, so anything over that is profit!


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Comments

2 Responses to “DomainsBot : How-to make profits from domains”
  1. Logan says:

    Great article. Most suggestions remain true today.

    Notably, DomainsBot.com claims it didn’t start in the industry until 2004: http://www.domainsbot.com/home/about. Not sure how he could be talking about it in 2000 then…

  2. DomainGang says:

    Logan – That was a different company back then. The current owners have nothing to do with the previous business model.

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