Domaining is a very unique career. Domainers sit around every day looking for letters and numbers in various orders, trying to find the most direct approach in money-making through affiliate programs and other ways of raising capital for certain domains.
I would rather acquire domains with money that my current domains are making, rather than taking out a loan. A good domain or web estate should already be earning money, and proficient Domainers use that money to make more money. We make money by buying revenue-generating domains (revenue-generating domains are explained below) through acquisitions and then make more money with the revenue those acquisitions generate. The effect snowballs, and eventually we are doing thousands of dollars a month.
We all want to make money. But the only way you make recurring revenue with your domain is through traffic. Traffic just refers to people visiting your site or domain name. Unique traffic refers to different visitors coming to your site, as opposed to one visitor coming to, or clicking on, the site 10,000 times; you still have an audience of one.
You want people to visit your domain. Traffic is how you make money. If you have a domain that no one visits, then you will never make a dime. You could have the best site on the web, but if no one knows about it, it serves no purpose. It would be like having the greatest billboard ever conceived, buried in a basement.
With the corporate world already creeping into everyday life, it is no wonder that a web site could be “Sponsored By” some random company. Now, this is important to bring up because companies want to be seen. Just as you want people on your site or domain, companies want people on theirs. These organizations want people to see their sites so much that they will pay you to send visitors to their websites. They usually don’t care how you send traffic (real traffic, i.e., unique visitors), as long as you do it within their terms and conditions. If you can meet a few end-game rules, not only can you pay for the hosting of your web site or for the registration cost of your domain, but you also can make a recurring fortune every month.
Buying Revenue-generating Domains
To get a recurring fortune, you are going to need recurring traffic; hence, you will need traffic/revenue producing domains. How much should you pay? Well, when you buy revenue-generating domains the sellers usually ask for a multiple (or x) of revenue made per year. For example, 3x revenue is 36 months (3 x 12 months = 36 months’ worth of revenue).
If a domain is earning $5 a month and you’re asked to pay “3x” revenue, then the domain is being sold for $5 x 36 = $180.
A sales price of 2x, 3x, 4x, and up to 15x or more is possible. I have seen revenue-generating domains sell for 100x rev, depending on the type of traffic they receive and what the names were.
Let’s say there is a domain for sale that is a typo of a country (Read more about typo-traffic in Chapter 6). Let’s pretend for a minute that it has some sort of revenue associated with it. Some people would pay anywhere from 5–10x revenue because the name of the country isn’t likely to change, at least not anytime soon. That means the domain will receive traffic for years and years to come. Basically, it would be a guaranteed paycheck, because traffic to that domain will not fade.
Here’s a big thing some new Domainers don’t think about: When buying domains based on revenue, think about your expense!
When you buy a domain that is based on revenue you need to remember a few things. First, what does it cost to even keep that domain? If a domain is a standard .com/net/org/ domain and earns $1 a month, then it pays for itself each year and just about nothing else. That’s because you have to consider the registration/renewal fees. However, say this name is being sold for 3x rev. That would be $36, however, to keep that name registered for those three years is going to cost you +/- $30 ($10 registration fee x 3 years = $30). So, after 3 years of keeping that domain, you will have made a whopping $6. At that rate it will take well over 10 years to break even. Watch the revenue multiple when buying lower revenue-generating domains, such as those that bring in $1 or $2 per month.
I like buying domains that are making at least $5-$10 a month. The registration is usually paid within the first month and then after that everything is fine. The higher the cost of registration, the more profit that is eaten up by those domain registration costs. The higher the revenue, the more the domain registration is offset by the sheer amount of money being brought in by the domain.
I also like buying domains that make $5- $10 a month because they are easy to come by (in the forums or otherwise) and I can use PayPal for payment to these individuals. With these types of transactions most of these deals are completed in one day or less which also makes it quick. I also know that if someone scams me on one name the most I will be out is $300-$400, so it also minimizes the amount of risk I am exposed to.
Pushes and Transfers
Now that you know about buying on multiples, let’s now discuss how you take possession of the domain name after you buy it.
When a domain is sold, and the new owner wants to take ownership of the domain, there are a few different ways ownership can take place. If both the buyer and the seller have an account at the same registrar, then there is a great possibility of an intra-registrar “push.” A push is nothing more than moving the domain from one account to another at the same registrar.
(Author’s Note: Since all registrars are not the same, the processes below may deviate some in a small manner. Some registrars may need an account key, user number, email address, or something else in addition to an account name or number. Check with your individual registrar’s documentation for exact details.)
Here’s an example: Dan and Sean each have individual accounts at Epik.com. Sean, the seller, has sold a domain to Dan, the buyer. All Sean has to do is get Dan’s Epik.com username/account name (NOT PASSWORD, of course) and easily initiate a push to Dan. A few clicks and now Dan has the new domain in his account at Epik.com. There are usually no time frame restrictions on pushes. This means that you can register a domain name and then immediately push it to another account without any problems.
However, let’s say Dan does not have an account at Epik.com. His registrar of choice is GoDaddy.com. Dan can go through the external transfer process, but he cannot receive the domain via a push since pushes are only internal to the registrar. Dan will have to transfer the domain from Epik.com to GoDaddy.com. In GoDaddy.com, Dan will login to his account control panel, select the transfer option, and then checkout which starts the transfer process. Since Dan is requesting a transfer he will have to pay for the transfer, which is effectively equivalent to one years’ worth of domain registration fees. He is required to pay this fee, but it also will lengthen the total time of his registration by one year.
One important thing to point out is that if the domain name has been registered for less than 60 days, you will not be able to transfer it away to any other register until 60 days has passed. However, you can register a domain and push it to another account at the same registrar usually at any time with no restrictions.
When conducting an inter-registrar transfer a number of things happen. First, the buyer initiates the transfer request from the registrar that they want to transfer into. The buyer is required to provide an EPP code to the gaining registrar in order to begin the transfer. You’ll get this EPP code from the seller and it’s basically a transfer key that adds a level of security.
GoDaddy.com, for example, will send an email to the Administrative Contact listed in the WHOIS of the domain name that is being sold. The email request will state that GoDaddy.com wants to transfer the domain away from the current registrar and will ask if that is ok. The seller of the domain will click “accept” which is a way of confirming that it’s ok to proceed. This is also referred to as “acking” (acknowledging) the transfer request.
Another important thing to note is that a domain needs to be “unlocked” in order for it to be transferred. If the domain is locked the transfer will fail and will need to be reinitiated. After the seller of the domain unlocks the domain and accepts the transfer request, the domain will be transferred, and the winning registrar will gain control of the domain which will then be deposited into the buyers account.
A “losing” registrar is the one that is having the domain name transferred out of their system. The “winning” registrar is the one who has the domain name transferred into their system.
Now let’s examine what traffic is and how to monetize (convert into income) it.
There are three major types of traffic. Some have subcategories, but I will describe the biggest two, link-pop and type-in traffic, first. The third, typo traffic, is discussed later in Chapter 6.
Link-pop traffic is just what it sounds like: link popularity. Link-pop traffic refers to domains which had websites on them previously that were once hustling and bustling but have now met their fate and their owners let them die. After the site dies, visitors will still visit those domains, at least for a while, because other websites still link to that domain. Visitors will continue to find their way to the domain until those links are removed. As links to the domain are removed, over time, the traffic will taper off until all of the sites that originally linked to the site have removed said links. Once all the links are removed, there is no traffic left. As a side note, this type of traffic is considered very low-end because people know the site is no longer what it once was and will have no real reason to return.
A fictional example would be going to a golf related site and going to a section entitled “golf irons and drivers.” We could reasonably assume that the visitor to this site is looking for information on golf clubs.
Let’s say the visitor sees a link titled “BigDaddy.com – The best drivers in the world!” and then clicks on it. From there they are taken to a completely irrelevant site that talks about cars, or chauffeurs, or some other non-golf related topic but has various ads about “drivers.” The visitor knows this is not the information they wanted so they will click back, close out the browser, or something else. As webmasters update their web pages, they will get rid of links that go to this site because it now has no reason to be included in a golf category, since the new site has no relationship to golf.
Even if the domain has a parking page on it catered to golf related items, there is still a high likelihood that the webmaster will remove the link because it is no longer the site it once was. More than likely the webmaster linked to the domain originally because it had some great content, great prices, or some other information or value. If that value is gone and then just replaced by ads, there would be no reason for the webmaster to keep the link to the page.
While link-pop domains do hold traffic for a while, they eventually become worthless. It may take some domains longer than others to become worthless, but domains that have value because of the traffic derived from link-pop will usually end up being worth zero. This is a fact of domaining. The one exception is that if a new site is built based on the previous history, then and only then will the traffic have any hope of remaining.
On a side note, traditionally, link-pop domains have low conversion rates, meaning many people don’t click on the ads or buy/sign up for the products or services that are advertised on those pages. Again, the lack of conversion relates to the fact that visitors are bombarded with irrelevant information that isn’t related to the topics they are seeking.
Type-in traffic domains are domains with high recall value, such as Money.com or Amazon.com. Simply put, they’re easy to remember. Other domains that might pull in a fair amount of type-in traffic are those that rely on everyday phrases and have a specific meaning.
Example: Your mom is looking for recipes on the Internet. She does not necessarily need to know anything about search engines to find what she is looking for. All she needs to do is type-in www.recipes.com in her browser and then she is immediately met with a parking page that deals with recipes.
Sometimes a random type-in will result in a full-blown web site and sometimes it will be a page filled with links or ads. But if she gets served something (ads, links or otherwise) relevant, she is happy. She needn’t know (and potentially doesn’t care) that she probably made some person $1 in advertisement revenue just by going to the page and then clicking on some ads. She is happy. The advertiser is happy. And the owner of the domain is happy.
Your mother just executed a direct search in a non-traditional manner, also known as “direct navigation.”
Her educated guess as to the likely nature of content on the page, coupled with the fact that relevant content appeared and matched her pre-visit guess, demonstrates the tremendous value of that domain name.
Recipes.com is presently a “parking page.” A “parking page” or a “lander” is a webpage that monetizes the traffic it receives by displaying paid links. It has no real content, but if you click on one of the links you will make the owner some money. That is how traffic monetization works.
Other examples of domains that get type-in traffic can be of the craziest combinations, such as www.abcdefghijklmnopqrstuvwxyz.com
Surprisingly, this domain gets type-in traffic. At the moment, that domain displays nothing. But it could just as easily be geared toward sobriety tests, an English as a second language online program, or anything else related to the alphabet.
Another example: www.123.com, a site most people visit out of shear curiosity. People just want to see if 123.com does, in fact, exist. Because of their curiosity, visitors will go to the site and will probably click on ads, which again, makes the owner of the site some money.
Think about it. It’s human nature to be curious. Have you ever typed your first name into the browser just to see where it goes? Admit it. We all have. In fact, I would venture a guess that you’ve typed dozens, if not hundreds, of domains into your browser, just to see where those domains might take you. Because of curiosity, a lot of domains, even those with some of the most outrageous or ridiculous names, pull in traffic.
However, it is important to note that the majority of domains that get type-in traffic use the .com extension, as opposed to .net or .org. Most users don’t know that a lot of other extensions, such as .biz, .info, .us, and so on, exist.
International users often type-in their own country extensions, such as .de for Germany or .co.uk for the United Kingdom. Americans will almost always type in .com, but there is also a big possibility that users from other countries will type in their own country’s extension.
How to Tell if a Domain is a True Type-In Domain
If a domain has traffic, the first thing you need to find out is if the visitors are typing it in out of curiosity or typing it in because there was a site there in the past and they are returning to view it. While the aforementioned is true type-in traffic, it is also “Expiring Traffic.” The negative experience a user had by going to that page that did not meet their expectations or recollections all but guarantees they will not return.
Further, the domain might have traffic as the result of Link-Pop. We have to be very cautious that a domain is not getting traffic from Link-Pop because as we said before, that traffic eventually dies. You want a domain name that the traffic is going to stay forever with (or at least for a long enough time to make back what you paid plus some.)
The first things I check when purchasing revenue domains:
Yahoo.com: This is usually the only tool you need in order to figure out if a domain had a site on it previously or not. Go to Yahoo.com and just enter in the entire domain name plus the tld (top level domain such as .com/net/org/us/info). If you’re looking up the domain name stiznet.com, just type it in as I wrote it here. If there are any sites out there that are linking to stiznet.com then they will show in the results. If nothing comes up then this domain most likely does NOT have link pop and is therefore more than likely a type-in domain.
Archive.org: Just to make sure you can go to the Wayback Machine (a site that keeps historical snapshots of websites that it has indexed over the years) and type in the domain name and see if it returns any results. If you see anything other than parked pages, then you know there was an operating site there at some point in time. If you see regular parked pages that is fine and also normal. It just means that domain has been monetized for a while.
Google.com: If the domain name you are looking up is not very generic then you can type it into Google.com without the TLD. If you start seeing links or references where people will be referred from a website to the domain you are looking to purchase, then the domain is most likely not a type-in.
Alexa.com: This is a VERY useful tool to see if a domain name has had past history with a web site and also to see stats on the domain (if available.) Alexa.com can also tell you if there are other sites indexed by Alexa.com linking to the domain you are looking up.
Usually, if you do just a few of these you can be pretty sure if a domain is getting link-pop or type-in traffic.