In my opinion, Josh Pelissero has become one of the most successful domain investors / domain flippers in the last several years. Josh secured many top domain names and has been able to successfully re-sell them profitably, often within days of his acquisitions. He’s an interesting guy, and I think you’ll enjoy reading about him and get some solid insight from his interview answers.
Usually for these articles, I write a person’s biography based on information I know combined with information they tell me. I think Josh’s self-written biography was pretty cool, and I wouldn’t do it justice by re-writing it:
Most people are a little taken aback to learn I never owned a computer until after I started domaining. It’s true, my girlfriend at the time (now my wife) owned an older Pentium II, I believe (which I later paid her parents $200 for and this was in 2005. So that may have been my worst investment lol).
While visiting her at her parent’s home, I would take a few moments to learn what the internet was all about. I had zero knowledge of computers. The one skill I always had is a nose for business– God given because to tell the truth I hated school, it bored me.
I was lucky enough while growing up to have several family members around me who owned businesses. Most summers and free days were spent working with them and learning to buy, sell, trade and all around hustle. By the time I was a young teen my uncle opened an account for me to trade stocks. We did quite well, but then again who didn’t. Clinton was in office and I always did my homework.
I earned my real estate license as soon as I was old enough and have it to this day (11 years now). It was crucial in preparing me for domaining. I learned what it meant to spin your wheels, get rejected and pound the pavement. It wasn’t until I was watching the first Godaddy Superbowl commercial that I even heard the term “domain name”. I was clueless, in fact I did two things on my girlfriend’s computer: one car forum and eBay. Who knew a whole world existed beyond that! I was curious and immediately went to that old P2 and started looking into what exactly a domain name was. Within weeks I knew exactly what they were and eventually how to buy and sell thanks to a few domain forums.
I had a small learning curve of $800, all new reg’s, all expired the next year. My first handful of transfers was exciting, frustrating and one of those learn as you go moments.
Since that time I have consistently traded in 7 figures a year, from LL to NN, incredible generics and everything in between.
My first “big” buy was literally $500.00 in 2005, I had no idea what that would lead to, in fact I was happy with the extra pocket money when I sold it for $XXXX profit, I took the girlfriend out for steak!
It is absolutely amazing at what you can accomplish with an email, phone and thick skin.
Interview with Josh Pelissero
EJS: Do you think someone could become a successful domain investor if they started today? What advice would you give them to succeed?
JP: I believe anything is possible with enough hard work and knowledge.
In saying that I do believe it is a more difficult time in our industry to see success if you’re just starting, take reselling, for example. I feel fortunate to have started when I did which still was not early mind you. Yet I found many avenues and opportunities that have become harder to come by today.
My advice in terms of what could help launch a new investor is to pick a niche to start. For me it was acronyms, the easiest to value and always in demand on the reseller market.
I remember some of my earlier buys of LLL .com and .net, I studied and read like crazy knowing the market would support X for any given LLL. So any name I bought for less was like money in the bank, and the market values were only rising. Through hard work and knowledge, I cannot tell you how many people I have contacted, be it via email, phone, fax or mail and some multiple times.
It is not an industry for those easily discouraged, try try again. Success rates when looking to buy are VERY low but scoring a name pays well enough to persevere.
Some of the most vital tools I have used include whois history, dnjournal, clickmojo any number of people search websites and a hidden gem dnsaleprice.com. I have made a very good living at finding people, you have to be willing to go that extra mile for what you want and I scored many times because for all the other domainers out there, no one else went the extra mile on that name!
I have seen far too many new investors spend large sums and end up becoming stuck, perishing for a lack of knowledge.
EJS: How has the domain industry changed since you started investing in domain names?
JP: The last nearly 7 years has flown by, I honestly do not pursue several avenues that I once did because frankly the opportunities in my opinion have virtually dried up and the competition priced me out of my comfort level. I no longer am heavy in drops. I no longer contact most pending delete names because most times for the better names the owner has been contacted already and given an uneducated offer over market value leaving no margin. This was a fantastic route I took for years, I am sad to say it is a rare occasion now if that works for anyone and leaves any type of margin.
I have come to enjoy reading the many blogs and domain news sites out there. When I started there was just Dnjournal which I still love. I owe Ron a huge thank you for doing what he has. It was because of Ron’s work on a sales report I had comparables and could get a feel for values in general each week. It also gave me insight into what type(s) of name(s) would see temporary increases in value among resellers.
The industry also continues to offer different and in some cases better ways to monetize your names that we didn’t have just 1 year ago. It is nice to see this evolve. Overall, I would say most changes have been for the good.
EJS: Domain theft is a major problem. Can you share some insight into how you’ve helped domain owners recover domain names in the past?
JP: Just to give a little background into why domain theft is an important issue for me you’d have to know my first “big” LL.net purchase ended up being stolen back from me.
That lead to domain lawyer John Berryhill recommending Zak Muscovitch to me since I am located in Canada. After a successful venture to recover the name I found myself wanting to help others recover their name(s). I would like to add that the two men mentioned above are in my opinion the very best of the best in their field.
Some of my earliest recoveries were actually (and now when looking back) unbelievable. For example, I discovered several LLL dot com domains were stolen while looking to buy one. I contacted the owner and I said I was happy to help.
Here is the best part, I simply put a small outline of events together and made a presentation to the head of Godaddy legal regarding theft. She was a wonderful woman and returned all the names in no time. That led to the recovery of many dozens of names for many domainers and non-domainers over the years. As long as someone needs help, is willing to tell the whole story and has enough of a case, I will go to bat for them from LL to LLLL.
The sad part and perhaps one of the changes in the industry for the worst is the lack of community that you find at a registrar now. They have either sold out, employees move on, expanded or become unapproachable. I could go on and on and tell many stories but the bottom line is it has been one of the most feel good moments of my career and earned me a gift basket or 2.
EJS: What type of due diligence do you do when you purchase a domain name to ensure it’s owned and being sold by the rightful party? What tools do you use to do this?
JP: Having had the pleasure of picking Zak Muscovitch`s brain a bit I have come to be sure I ONLY purchase the domain name from the registrant. It is crucial to realize the administrator is NOT necessarily the rightful owner. I think this is where some may get in trouble. As domainers we generally contact the admin; so the potential for a problem to arise is very probable. Even if the address and phone match the registrants you may just be talking to an employee. In order to ensure I am contacting the rightful owner I will first use the whois history to look for a nice steady pattern of matching information. It is not always the case of course but most good older names have been owned for years and years by the same people.
Look for unusual email, address, phone or dns changes. All can be red flags, again not always but I have caught many thieves this way. Once I feel comfortable at that level I will do a background check on the company to ensure the individual who claims to be the rightful owner or the company president, is legally listed as such. Again, I cannot stress enough when buying from a company, be sure it is a person who has the power to complete a transaction. In some cases if the amount justifies it I will do a background check on an individual as well. I may go the extra mile but better safe than sorry.
One case involved a situation where the seller stated the name is her’s now and that her husband passed on. However, the whois still showed her husband’s name. I did two things, requested a declaration from her lawyer stating she was now the rightful owner and I did a people search to find a death certificate, thus confirming she was telling the truth.
As for payment I like to use escrow.com and have never had a problem with them. Their support is terrific and after many transactions they aim to please every time.
I have been fortunate enough to do steady business with many other domainers over the years and a simple bank wire is good enough, after all an element of trust will always be involved.
EJS: What are your thoughts for the domain industry in the future?
JP: The future of our industry, it has been on my mind as of late and how strong I feel about furthering large investments in domains at the present time. My gut and experience to this point has rarely failed me and afforded my wife and I a great life. As we all know there are many paths to take when looking at investing in domains, from buying and selling to offering solutions, seeking end users, development, consulting and right on up to registrars.
My opinions are general in nature as I feel the future of the world’s economy will affect most facets the same.
It has been said that domains are as good or better than gold. While I cannot argue that great domains have in a lot of cases offered greater returns, I cannot ignore what gold actually is and its intended purpose versus domains. Should the world’s economy collapse we will not look to go to a domain standard again as a possible solution. I guess that best sums up my feeling on how I feel about the comparison.
To spell it out for you…domains like any other asset are potentially worth as much as the paper we print our money on. Whereas gold has ALWAYS held its buying power and still will after domains. I am not saying domains will disappear. Certainly not! What I am saying is they can see a deep dark time just like anything else. I cannot help but look around today and see a world in great financial trouble, enough worry that a greater depression is now a very strong possibility. That directly affects how I invest for my future. I have also heard it said that domains are recession proof. We all felt the impact on market values since 2008 and would have to admit they are not. We can always give examples that are exceptions but, since 2008 there has been a downward trend over all.
Remember the days prior to 2008 when a decent two word dot com combo at auction brought $15k like nothing? I believe when it arrives this economic slump will last for several years if not decades. This is not a slow down, correction or buying opportunity in my opinion. We need to be very cautious at how we set ourselves up. It is time to focus on those industries and niches we feel will pull through a depression and those industries which still make sense online and offline.
What I am saying basically is the days of investing in any random one word dot com or acronym to see a fairly quick buck are slowly coming to an end. The ” hey it’s brandable” logic will fizzle. Sure there will always be exceptions to the rule and if you can afford to take the risk, all the best. But again my opinion is in general. We are not there yet but I see a shift taking place, once in a deep depression the novice domainer, ad dollars and end users will melt away at a rate that will make 2008 look like a picnic.
Will there still be money to be made and will certain branches of domains be worth investing in? Sure, but over all we will suffer like any other industry because we forget that we need those industries, without them what is a domain worth?
I hate to have such an unhappy message at the end of this interview but feel for the most part there are a lot of us who live good lives, have beautiful families, money in the bank, a few domains and no worry about what we will eat tonight.What we do not see is there are more people out there who do not have the blessings we do and ultimately our countries are totally insolvent. To steal a line from ole Willie, “Turn out the lights the party’s over”.
I will not get into who is to blame, crooked banksters or how I would solve it. I will simply ask everyone to do their best to secure their families future before securing a domain name. Now is not the time to extend yourself.
I totally disagree and dont subscribe to the pessimistic views observed by Josh. i think the future of domain names is really outstanding and our industry like any is going thru a phase, but by the 3rd quarter of 2012 i predict things picking up.
If u believe in the internet, u hv to believe in domain names. Now is a great time to buy 🙂 (silver lining)
“Be fearful when others are greedy and greedy only when others are fearful.” – Warren Buffett
Kudos to you Elliot, for having the insight to profile Josh Pelissero, who is one of the unsung heroes and successes in the domain name world. He has built himself an impressive domain name business through sweat of his brow and without help from anyone.
Josh has always amazed me perseverance and persistence. He will literally contact a 100 different people to get a domain name acquired. When creativity and trustworthiness are called for in a particular domain name situation, I call on Josh.
On top of that, he is a wonderful, interesting, and very generous person.
Thank you Zak, very kind of you.
As for take on whats to come. I made it clear money will still be made in domains but one must chose wisely 🙂
We’re definitely seeing a new emergence of end users for our domains. More of our SME clients are understanding that Google’s first page real estate is only available in multiples IF you have more than one corporate domain/site in your portfolio. So whilst the giant domain sales may be harder to come by, a new client type is certainly coming to the market in our industry.
” It’s true, my girlfriend at the time (now my wife) owned an older Pentium II, I believe (which I later paid her parents $200 for and this was in 2005. So that may have been my worst investment lol).”
However, I’m sure your wife is the best investment you ever made.
She is or should I say will be, it ended up being a 25 yr roi lol
Interesting interview. Thanks guys.
Interesting read – thanks Elliot. One of the better domainer profiles I’ve read.
But JP, what’s with the bananas?
@JamesD, It is kind of an inside joke, another domainer once called me a banana in a beef stew, I embraced it 🙂
I know JP, whats wit Banana love? lmao
Great interview Elliot, Josh is a one man army as far as I know him 🙂
Pretty good story.
I definitely agree with what he says towards the end.
Medx Publishing sold the medicaid.com domain in May 2014 to Unitedhealth Group of Minnesota. Does anyone know how much it sold for? And if so, what the source of the info is?