Achieving Financial Independence with Domains

Chapter 11: Selling Domains and Interesting Ways to Do it

By October 11, 2019 January 6th, 2020 No Comments

Selling Domains:

These days I do very little selling. My goal is to get a nice stream of recurring revenue going and then use that money to pay for the registration renewals for my current revenue producing names, and then use the remainder to buy quality names that I like or that I want to have developed. I want passive income. It is always nice to use the parking money I have earned to buy a domain name that is a good generic name that will also bring in some parking revenue. When I buy generics, I want them to produce enough revenue to keep themselves sustained. In this model I don’t have to worry about making enough extra money every year in order to pay for a domain’s renewal since it will be making money and paying for itself.

You would do well to learn one thing concerning the domain name market very early: PATIENCE. If you are eager to spend money then there will be sharks salivating and lining up, happy to take it from you. The point is, that you don’t want to spend money just to spend, you need to make sure the buys you are making are quality.

As the value of good generic names keeps increasing, there is very little reason to sell at this stage at the game. Yet, people do. However, if you do come to a time and place that you want to sell you need to keep a few things in mind:

  1. You obviously need to make enough to cover the original purchase price, but you may also need to factor in other expenses such as renewal fees, how much PayPal.com, or an escrow company is going to take from you when you make a domain sale. You also need to make enough to pay any taxes that may be incurred. Taxes are a big area of debate in domains, and I’m not a tax expert, so consult your tax advisor.
  2. Can you make more money if you wait a bit longer for a different person who may want this more? Is there a big enough market to where other people would be willing to buy this domain so they had an edge on the competition? Or are you selling to a reseller (a person just as yourself who is buying the name to hold and resell later)?
  3. Is it really the “right” time to sell? if you wait will the product/service/etc. become more widely known or will the domain bring in more traffic? (E.g. hybridRVs.com). Do you even need to sell, or do you just want to? You may need money for other ventures, but if you don’t, then what’s the point?
  4. Is it an offer that you just cannot refuse? I have had offers on domains that I could not refuse before, it’s not common but it happens. I had just registered about 20 .us domain names and shortly thereafter a guy got a hold of me and offered $500 off the bat for one of them. Considering that I just registered the domain name, and the mere fact that the .us market has really not picked up, it was probably a good decision to sell. I sold him the domain for $500 total. That sale paid for the purchase of the other 19 .us domains and also the renewal fee for them along with some money to spare.

In a case like the above, unless what you just registered is a true gem, there is probably no reason to decline the offer. But before you sell make sure a transaction will even be worth your time. If the same guy came to me and said he would have given me $40 for the domain name (and that would be as high as he would go), then there would have been very little reason for me to sell.

Remember, your time is worth money too. However, if you are a “time person,” then these are the types of sales you might need to target to get your domaining career started.  And you need to target them over and over again until you reach a healthy base with domain name parking revenue and a modest portfolio. Once you become a “money person,” these types of things are not worth your time in the slightest. Remember, you want to become a “money person” as soon as possible.

Interesting Ways to Sell Domains:

A big question I often encounter from newcomers to the industry is “How and where do I market my domains?”

I have already outlined the traditional fiats to sell domains (forums, Sedo.com, Afternic.com, etc.), but I wanted to expound on that and list a few of the more interesting ways I have seen to market domains.

Press Releases: Every once in a while, you will run across a press release online where the big news is that SomeName.com is Finally Up for Sale. This is nothing more than advertising for a domain name and this is not really big news, but it is a good way of getting a lot of people to see your domain name.

You can do press releases at sites such as PRWEB.com. Some press releases are free, some are thrifty, and some are very costly: you get what you pay for. Don’t expect a free press release to raise eyebrows to viewers eyeing the front page of the Wall Street Journal.

Google Adwords: Domainers will use Adwords themselves in order to promote their domain. An ad for a domain can appear, usually as a sponsored link at the top or on the right-hand side of Google.com’s search results. This advertisement could go directly to a small webpage that simply states: “This domain for Sale – Contact me at you@youremail.com.”

Potential buyers can email you, ask questions, and you can negotiate directly with you. But you can also contact potential buyers directly. Although this one is a bit riskier as it can anger the people you contact; this is also another way to make a deal. Sometimes you might not hear back from the company or individual you have contacted, but there is always the chance you might.

Remember, most people don’t understand how the domain name aftermarket works so an asking price of $x,xxx is going to baffle a lot of the individuals you contact. However, there is always the off chance that you may be able to pique someone’s interest and make a sale. There is often a challenge posed in explaining the value of an intrinsically great, or obvious domain, or a high-traffic domain.

BostonDental.com may cost $15,000, but it is utterly easy to remember, to tell friends about, to market on the radio and the like. The $15,000 may hurt, but it hurts far less than the constant $10,000 F.M. radio ads during high-commuter driving times to market a company with a domain like SchlempfkeAndSonsDentristry.com.

Domain Brokers: If you have a very nice name, then going through a broker to find potential buyers is another option. Brokers usually only deal in high-quality names because they get their payment from you, usually in a form of commission. If the broker goes and finds a buyer for your domain name for $10,000, they will probably take at least $1,000 of that money, if not more. This may seem like a lot, but what you are really paying for is an advertisement to a highly targeted customer base. Good domain brokers will usually know a lot of people in the domain industry or large organizations, and if you don’t, this may be your only way to get into that crowd.

In-person Live Auctions: Domain names being sold in a live auction is an interesting phenomenon to watch. If a domain is priced with a minimum bid that is attractive to buyers, the competitive spirit really can shine in the bidding process, and domains can fetch good prices. NamesCon.com is the key providers of live domain auctions which happen at their domain name conferences.

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