Q4 Estimated Taxes Due Next Week

Elliot Silver
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Now that the holiday cheer has worn off, it’s time to get back to the real world. I want to remind you that US federal estimated taxes for the fourth quarter of 2011 are due on January 17, 2012, which is next Monday.  Generally, this tax payment is due on January 15, but that date falls on a Saturday this year.

If you operate an LLC or similar type of business structure in the United States, you likely have to send quarterly estimated tax payments. Better get on that before it’s too late.

Buy Domain Names in Bulk and Save

Elliot Silver
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There are a number of larger domain portfolio owners that sell domain names. While companies like Name Administration will generally only sell domain names at end user prices, there are companies that have fairly decent pricing. Buy Domains, for instance, has a huge portfolio of domain names, and many are well priced.

That being said, buyers can often get more reasonable deals on domain names, lower than the listed price, depending on the seller. The price discount that is offered generally depends on variables such as asking price, time of the month, sales volume, previous inquiries for the domain name, revenue generated by the domain name, and other proprietary variables that differ for each domain owner.

One piece of advice I can give you to get the best deals is to inquire about and purchase domain names in bulk. When you buy in bulk, you can generally get an even better price on the domain names.

What I do is write down a list of domain names I like from a particular company, and I inquire about the group of domain names at one time. I ask the domain owner for the best possible price on individual domain names as well as a bulk price. If I choose not to buy the list of domain names, I will go back to the domain owner and ask for a deal on the group of domain names I do like. I find companies are more likely to make deals on multiple domain names.

One other purchase tip I can give you is to try and make larger purchases at the end of the year (like next week). If a company hasn’t met its goals, wants to pad its numbers, or needs liquidity, they may be more likely to give better pricing at the end of the year.

Don’t Tell a Domain Owner Your Plans for a Domain Name

Elliot Silver
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One question I frequently receive after making an inquiry on a domain name is “what do you plan to do with the domain name if we reach a deal?”

People are curious about whether I am going to re-sell the domain name or perhaps turn it into the next Google or Facebook. Some are probably a bit hesitant to sell a domain name they’ve owned for 10 years when that name could become the next billion dollar brand or be re-sold for 10x the sales price. When you think about it, the reasoning isn’t really all that sound, but it’s human nature.

Although I won’t lie to someone during a negotiation, I generally won’t give away my plans for it either. I may be very vague about my intentions or say that I haven’t figured out my plans yet, but I won’t get into details about them.

You don’t want to give them an idea about what they can do with the domain name if they choose not to sell it, nor do you want to give them any leverage in the negotiation if they know that their domain name is your only choice for what you want to do. It will generally cost you more to acquire it if you give too much information away.

Additionally, when I plan to re-sell the domain name, I don’t mention that either. Inevitably, the person will ask me to broker it and split the proceeds. I have no interest in brokering domain names.

If they’ve seen my blog (many people search for my name and arrive here), they know I buy and sell domain names so they assume I am doing that with their domain name, which may be true. The way I explain it to them is that I am only interested in taking on 100% of the risk for 100% of the reward. If they want to keep doing what they’ve been doing and hope someone comes around with a better offer, they are welcome to do so. Alternatively, I am able to pay all cash up front right away to buy their domain name.

Some people don’t like this and won’t sell their domain names knowing they are going to be re-sold. The majority of people look at the offer as likely the best they’ve received, and they happily accept, not worrying if they’re leaving anything on the table.

10 End of Year Checklist Tips

Elliot Silver
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2011 is coming to a close, and while there are a lot of distractions, I think there are some important pieces of business to tend to before you close out the year.  Here are some of the things I am trying to accomplish before the new year. If you have anything to add, please do so.

  • Renew your .com and .net domain names. Prices are increasing in 2012 no matter which registrar you use, so if there are domain names you know you’ll want to renew, now is the time to do it.
  • Buy your office supplies, office products, computers, office furniture, and other needs so you can take the write offs in 2011.
  • Visit aftermarket brokerages like Sedo and Afternic to update your domain sales list. Make sure the list is accurate, add new domain names, and remove sold domain names. Update your pricing to reflect current market conditions.
  • Visit your parking company websites to ensure that your domain names are well targeted. Check the DNS of your domain names, especially names you won at auction, to be sure you properly changed the DNS and they are all resolving as they should.
  • Schedule a call with your tax accountant ASAP to see if there are any things you can do in 2011 to maximize your tax deductions and write offs before it’s too late.
  • Update your record books. Finalize your records now to include all purchases, sales, expenses, and other important information. It’s much easier to do the update when everything is fresh in your mind rather than in a few months from now when you start doing your taxes.
  • Review your goals for 2011 that you set at the end of 2010 to see how you did. Think about things you’ve learned in 2011 to come up with a game plan for 2012.
  • Put together a budget / P&L estimate for 2012.
  • Update your footers to 2012 and make sure the forms, capatcha codes, and outgoing website links on your developed websites are all functioning properly.
  • Pay in advance for subscriptions like e-fax, newsletter subscription, email provider, and other monthly renewals.

Foolish Inquiry: “I Am a Domain Buyer, Not an End User”

Elliot Silver
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I want to share a piece of domain buying advice with you based on an inquiry I received on one of my domain names from the Voodoo.com sales form.

In the field asking for an offer, the person replied (with spelling and punctuation corrected): “How much?  I am a domain buyer, not an end user.” Translated, it means, I am not going to offer you what the domain name is probably worth.

Although I do appreciate the fact that knowing the buyer wasn’t going to pay top dollar, I was able to save some time with the negotiation, I think it is a poor way to open a negotiation to buy a domain name. Why tell the domain owner you’re not going to pay him or her what the domain name is worth?

My reply was simple: “too much.” If the buyer was going to come close to what it would take to get me to sell the domain name, he would have asked how much is too much, but he did not.

When you’re negotiating, I think you should act in good faith, but don’t kill the negotiation before it starts. When replying to a domain forum sales post or to a domain newsletter listing, it may be appropriate to mention that you’re not going to pay end user pricing and that’s an expectation with a listing to other domain investors. However, on an unsolicited offer, it’s probably not a good idea to initially mention that you’re not an end user, unless you don’t want much of a response.

Domain Sales: Comparing Aftermarket Websites to Domain Forums

Elliot Silver
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Yesterday afternoon, someone posted a question in the Sedo weekly sales article, and it’s something I’ve been asked quite a bit so I want to give the question and my reply more exposure in its own post.

The summary of the question was this: Why do domain names sell for so much on Sedo or Afternic when they wouldn’t even sell at a fraction of these prices on domain forums?

To answer the question, I used physical real estate as an example:

“There’s a big difference between when someone specifically wants to buy one name in particular on Sedo for a project vs. when someone wants to sell a domain name to other domain buyers.

Picture it this way.

Say you live in a penthouse apartment in New York City and you’ve given the listing to a broker in the event he/she finds the perfect buyer. You don’t necessarily need to sell it, but if someone comes looking for a $20 million apartment, you’d consider selling it. That’s what it’s like when a company wants/needs a name and goes after it on Sedo.

Now imagine you own a piece of real estate and you need to sell it ASAP. Instead of trying to connect with a real estate agent who has buyers or listing it for sale, you decide you want to call the number on billboards you see across town announcing that they will pay immediate cash for homes. That’s sort of what it’s like to sell on a domain forum.

Most domain investors won’t pay full retail price for a domain name, and most who would, don’t spend much time on forums.”

I would be interested in knowing your thoughts on the question, especially if they are different than mine. I am traveling today, so comments that aren’t automatically posted may take additional time to be approved.

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