Should You Buy the .Net or .Org to Protect the .Com?

Elliot Silver
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I am often asked whether it’s recommended that a person buy the .net and/or .org domain names when they purchase a .com domain name. In my opinion, the simple answer is yes if you are going to develop, but no if you aren’t.

While it’s nice for a publisher to own other extensions when he or she plans to develop the .com domain name, it’s not critical. I would imagine very few people confuse the .net or .org for the .com. The main reason I do recommend trying to get the .org and/or .net if it’s feasible and cost effective is to prevent someone else from competing, specifically if it’s a descriptive domain name.

For domain investors who are hand registering .com names as an investment they later plan to re-sell, I don’t think buying the .net and .org is necessary. If a person has a portfolio of 200 .com domain names, owning the .net and .org of those names is close to an extra $3,000 annually.

Unless you are going to develop and plan to protect your brand, I don’t think it’s necessary. It likely won’t add much value to a deal with your .com and will only serve to significantly increase your carrying costs.

Q3 Estimated Taxes Due This Week

Elliot Silver
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1

Here’s a reminder for those of you who are based in the United States and have to pay estimated quarterly taxes: Your Q3 2011 payment (for June 1 – August 31) is due to the Internal Revenue Service on Thursday, September 15, 2011.

According to the IRS, “if payment is mailed, the date of the U.S. postmark is considered the date of payment,” so you have a few days before you need to stick your check in the mail.

Hopefully, you’re having a great 2011.

Monitor Your WordPress Plugins

Elliot Silver
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4

File this under common sense advice, but it’s something to keep in mind when using WordPress plugins. You should always be aware of how they work, what they do, and their current settings on your WordPress based website.

I have the Simply Exclude plugin used on a few of my websites. In fact, I essentially copied the meat of one of my sites to use as the base for my other sites. Unfortunately, I never checked the Simply Exclude plugin settings, and I had blocked a specific type of page on my site. Upon replicating that particular page over and over, I was creating pages that blocked search engines from seeing them. They aren’t critical pages or advertisers’ pages, but they are important.  Bozo move on my part.

The good news is that I caught this error and can advise you on not doing the same thing. The other good news is that upon allowing search engines to see those pages, I should see quite a jump in traffic. The bad news is that I was blocking certain pages for a long time, which probably cost me traffic and revenue.

Do yourself a favor when you develop. Learn about the features and functionality of all your plugins. Avoid silly mistakes like the one I made.

Mike Mann Domain Buying Tip

Elliot Silver
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17

I saw a note that Mike Mann posted on Facebook, and I thought it was valuable enough that it should be shared with a greater audience than just Facebook. With Mike’s permission, here’s a tip on how to get the best price when you want to purchase a domain name from a broker or aftermarket website:

“Tip on buying a domain from brokers: get quotes on 5 names at once so they don’t know which one you really favor, may get lower price. Then negotiate on the the one you like if quote was fair. Some do 50%, we do 15% max. Or walk and buy elsewhere. They may come back to you with a special discount later.”

One of Mike’s companies is a sales venue called Domain Market, which lists thousands of domain names for sale. Mike was also the founder of BuyDomains, which he later sold to Namemedia.

In essence, this advice is a standard negotiation tactic (used on USA Network’s Suits the other night actually), and it works very well when buying domain names. If you don’t let the other party know which domain name you want to buy more than the others, they can’t price it higher than they would if they knew how much you covet that particular domain name.

If you are interested in buying a domain name from a private domain investor, it will generally behove you to research other domain names the person owns and get group pricing. It might also benefit you if the seller thinks you’re a domain investor buying a package rather than an end user looking to buy one name for a project.

Based on my experience buying domain names from various companies, this is a great tip.

Could a Domain Appraisal Help You Sell a Domain Name?

Elliot Silver
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13

I have never been a fan of domain appraisals. My opinion is that a domain name is worth what someone will pay for it at a given time. In fact, I pretty much have a set response for when I am trying to buy a domain name and the owner suggests a domain appraisal to determine the value. Here’s my most recent reply to someone that recommended an appraisal:

“I don’t believe appraisals are accurate or in the best interest of a buyer. Both companies you mention have aftermarkets for domain sales. In my opinion, the more they tell you that you can get for a domain name, the more likely it is that you will engage them to sell it. For instance, if company A said your name was worth $5,000 and company B said it was worth $25,000, which company would you engage to sell the domain name? Most likely the company with the higher valuation/expectation I would think. It’s in the best interest of a company to provide high appraisals. From my perspective, a domain name is worth what someone is willing to pay, and I’ve made my offer.“

With all that being said, a comment on my blog got me thinking that perhaps suggesting a domain appraisal could help you sell a domain name when someone inquires and you can’t bridge the gap between his offer and your asking price.

Let’s say a person inquires about a domain name you own and offers $5,000. Because of the price you paid (based on your own gut feel), you tell the buyer you need $20,000 to sell it, but you’d realistically let it go for $15,000+. The gap is just $15,000, but in reality, the price is 4x what the buyer is willing to pay.

Now might be a good time to seek out a domain appraisal from a company like Sedo, Afternic, and/or GoDaddy to use it as a part of your negotiation strategy.

If you plan to do this, I would order one appraisal before suggesting it to the buyer just to be sure your pricing is in line with the appraisal. If the appraisal is the same or higher than your price, you could then present it to the buyer and show him the independent appraisal to show that your asking price is fair and reasonable.

I would not recommend doing this if you are a passive seller or don’t care whether your name will sell or won’t. This is a strategy that is more likely to work if you are a proactive seller.

Keep in mind that the buyer can easily say something like, “great, I know your price isn’t bad but this is all I can afford.” However, I’ve had a number of buyers discuss purchases and in our discussion, it’s come out that they haven’t bought a domain name in the aftermarket and don’t have great valuation insight.

A domain appraisal from a reputable source, complete with factual information about why it’s worth what it say it’s worth, may help close a deal. It’s something I am open to trying and want to share the idea with you.

One Thing I Learned During the Recession

Elliot Silver
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I want to share something I learned during the last recession that might seem like common sense, but it’s something I think about often as the economy seems to be teetering on the brink of a second recession.

My largest source of income is flipping domain names. I don’t always have huge profit margins, but I make up for that in value. For instance, I would rather make 30% profit margin on a $25,000 sale than 300% profit on a $5,000 sale.  This is common sense, but it means I need to invest in higher value domain names for the cashflow to continue growing my business.

During the recession, I got scared. I had no idea how long the recession would last, and my primary focus was maintaining liquidity and growing alternative revenue streams via my developed websites. I became far more cautious with my investments and was basically running scared. As a result, my income took a hit, which then made me even more nervous and cautious. It was something of a downward spiral.

Eventually, I made a couple of higher value acquisitions that I flipped, and I was able to turn the tide.

From this experience, I learned a valuable lesson. I always need to be investing in great domain names at good prices. Instead of buying mediocre names for under $1,000, I need to continue buying great domain names. Mediocre names are significantly more difficult to flip than great names. If I buy 10 mediocre names for $1,000/each, it’s far more challenging to sell those than it is to sell one $10,000 domain name.  Similarly, it’s more difficult to make enough money to thrive with hand registrations than it is on higher value domain names.

Instead of spending money conservatively on hand registered domain names, save up and buy one great name when it’s available. Put your money aside and wait until the right name is offered for the right price. There seem to be a whole lot more people with 500 crappy domain names than there are people with one solid domain name. Every year, that means it’s $5,000 for renewals.

The next time you are hand registering speculative domain names, think about what I’ve written. This advice should especially be heeded by people who continue to register names but have never sold any before. Perhaps it’s the names you are picking? Stop making the domain registrars rich, and start building value for your own portfolio.

Don’t get me wrong – there are times when it’s smart to hand register domain names, but if you want to take your business to the next level, you’ll likely need to buy high value domain names at great prices.

* I am away right now, so comments may take a bit longer than usual to be approved.

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