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Jump on the Bandwagon!!

Elliot Silver
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7

Subscribe to Elliot's BlogI’ve been criticized a few times about my coverage of various cctld – and/or lack of coverage. Simply put, I don’t think most are good long term investments when they are released. There are too many people trying to grab these new domain names at the bottom to sell them to the next round of fools who want to sell them to the next round of fools who want to… well, you get the picture.
Sure, quite a bit of money can be made on quickly reselling newly released domain names, but how will you know ahead of time if you get stuck “holding the bag?” I really can’t think of one cctld introduced in the last 5 years where a majority of the domains purchased in the aftermarket have held their value.
I am not averse to risk taking at all. In fact, I’ve been day trading GS ($86.60), LVS ($8.25) and MNTG ($2.69) for the last three days – sold the first two for a nice profit. At least with stock investments, there is a priced market where I can sell these stocks for a set price if the value goes down. I can generally put a stop loss and limit my losses in most cases. If you buy a domain name only because you think the price will increase due to the newest domain “trend,” you are really gambling.
Like I’ve said before, if an extension is accepted and widely used by the public five years after its release, and the values are increasing due to that, then I may buy to develop and hold as an investment. If you are buying just to get on the next bandwagon before it leaves the station, chances are good that you’ve already missed the boat and will get wet.

Escrow Services Reviewed

Elliot Silver
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16

Subscribe to Elliot's BlogI had a chance to use EscrowDNS for a transaction this past week, and since I’ve used Escrow.com and Moniker escrow services before, I thought I would compare these three escrow services. Aside from a registrar relationship with Moniker, I am not personally connected to any of the companies, so this is as unbiased as possible and based on my own personal experiences.
Moniker Escrow Service:
How it works: Buyer and seller agree to a transaction online. Buyer and seller sign and fax/scan the agreement to Moniker, which is then approved by Moniker staff. Seller pushes domain from Moniker account or provides EPP code to Moniker for a transfer from another registrar. Buyer sends Moniker the funds via wire transfer or other form of payment. When Moniker has money and domain name, they push the domain to the buyer’s Moniker account and the seller can request the funds be disbursed.
Fees: $5,000 sale = $149 $10,000 sale = $200, $50,000 sale = $450
My Take: I really like how Moniker controls the entire process, although it can sometimes take extra time since they must review the signed agreements manually and since people don’t always sign and fax their agreements back quickly. The company is known throughout the domain industry and other various industries, so trust isn’t a problem (I have done several large transactions with them without any problems).   When I am dealing with non-domain investors who don’t know Moniker, most are willing to use them after researching their reputation, but some are still a bit hesitant if they don’t have their name registered with Moniker.
Overall, Moniker provides great support (email and phone) and I trust them entirely. My one and only beef is that they will usually report a private sale with DNJournal unless you tell them otherwise (happened to me twice). Make sure you ask for confidentiality – especially if you sign a separate NDA with the buyer/seller, as Moniker isn’t a participant to that side agreement and may report it publicly.
EscrowDNS Escrow Service:
How it works: Buyer and seller agree to a transaction online. Buyer and seller agree to the terms outlined in the online agreement. Buyer sends payment to EscrowDNS escrow account. Seller receives a prompt that buyer has paid, and seller is instructed to push the domain name into EscrowDNS’ account at the registrar. Once EscrowDNS has the buyer’s account number, they push the name to buyer and send the funds to the seller.
Fees: $5,000 sale = $200, $10,000 sale = $177.50, $50,000 sale = $500
My Take: Although they are relatively new to the escrow business, I thought they handled my transaction well, especially with their manually managed emails. Their communication via email was stellar, keeping me posted along the way. The company doesn’t have a long history, so non-domainers may be reticent to use their services initially for large transactions, but I wouldn’t hesitate using them on future transactions with other domain investors who know of the company. Most of my trust is due to the reputation of the company founder Justin Godfrey (with whom I have never done business but know of several positive dealings).
Overall, the transaction was completed very quickly – in less than 48 hours, something that is good when dealing with another professional domain investor. I was a bit concerned when I received an email from them telling me there was a bit of a shortfall in the seller’s payment after they told me to transfer the domain to their escrow account, however, I was assured that they were going to cover the shortfall temporarily, so the transaction wasn’t delayed. All together, my most recent transaction was completed in under 48 hours.
Escrow.com Escrow Service:
How it works: Buyer and seller agree to a transaction online. Buyer and seller agree to the terms outlined in the online agreement. Buyer sends payment to Escrow.com escrow account. Seller receives a prompt that buyer has paid, and seller is instructed to transfer the domain name. Buyer and seller need to discuss whether the name will be pushed to buyer’s account at the registrar or whether it should be transferred to another registrar of buyer’s choice. Seller then confirms that the domain transfer was initiated. Buyer then confirms that the domain was received to begin an “inspection period.” Buyer then accepts the “merchandise” to inform Escrow.com the transfer was completed and funds should be disbursed.
Fees: $5,000 sale = $162.50, $10,000 sale = $175.50, $50,000 sale = $445
My Take: Escrow.com is very easy to work with and the process is almost completely automated. People in and out of the industry know of Escrow.com and trust them with their money, so I’ve never had anyone not want to use them when prompted – even non domain investors who haven’t used an escrow service before. It is very easy to initiate and follow through with a transaction, and they have pretty good phone support, which is helpful when people forget to update the transaction.
My only issue with Escrow.com is that it seems a bit peculiar that the escrow service doesn’t take possession of the domain name and the money. Also, why is there an inspection period that begins after the domain name is received? I haven’t run in to this problem before, but what would happen if the seller says the name is transferred but the buyer adds privacy service and says he never received the domain name? While I am careful about who I do business with, I am concerned that this could be an issue, although I would hope they have internal safeguards. I do use Escrow.com more than other services because it is quick, generally trusted by non-domain investors and I can easily explain how to do a transfer.
All in all, I think domain owners have some great escrow options.

Managing Your Domain Business

Elliot Silver
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Subscribe to Elliot's BlogIn order to weather this economic storm, I have been spending most of my time and some of my money on developing and re-developing my websites. I believe it’s become very risky to invest in some lower to mid-priced domain names with the hopes of quickly flipping them, so instead of buying a $3,000 name with the hopes of selling it for $5,000, I am now spending that money on developing my sites (such as Burbank, Lowell, Secaucus and TropicalBirds). Yes it most certainly can still be done obviously, but it is more difficult.
I believe businesses will always need to advertise, and Internet advertising is a trackable way to advertise. Advertisers can determine campaign ROIs and adjust   advertising expenses based on this. My sites will offer affordable advertising opportunities, that will be more economical than Google Adwords campaigns in most cases – or at least that’s the idea. The more advertisers that sign up and create custom landing pages within Burbank.com, the greater the traffic will grow and more value all advertisers will receive.
At this time, especially given the tax burden faced by most domain owners who consider their domain assets inventory, it isn’t wise to spend a ton of money on domain names that may or may not sell quickly. I am fortunate to not have registered a considerable amount of new domain names, so I don’t have to make the renew or drop decision, but I know there are plenty of people out there who are doing that right now. While it might not feel good to have to do this, I believe it will lead to a trimmer and more agile company.
It’s tough out there right now, and every decision you make could have a major impact on your company’s bottom line and/or its ability to survive. For me, developing strong advertising venues via development is hopefully a way that will allow my business to survive and ultimately thrive once the economy is more stable. Perhaps you need to look at your domain assets to see how you can better stay afloat.

Creating a Succession Plan

Elliot Silver
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8

Subscribe to Elliot's BlogI spent much of yesterday afternoon at a chemotherapy center with my Aunt, which made me think about a few things, including my own mortality. While I am thankful to be healthy, life changing events can happen at almost any time. Being a domain investor/developer puts me in a position that is different from many others, and I think we need to think about a succession plan should unexpected something happen.
The most important thing is to make sure a loved one (wife, child, brother, parent…etc) or other trusted person knows about your business. They should know details such as registrars, domain holdings, passwords, email accounts, forums, parking companies, partners, clients, bank accounts and other details. If something happens to you, it’s important that someone trusted knows what to do with your business. Here are some things I recommend:
Let your trusted person know which registrars you use, the account numbers, and the passwords (kept in a safe and secure location). If you have an Account Manager at the registrar, the trusted person should have your AM’s email address to make sure domains are paid up and accessible if liquidation is necessary.
For those of you who develop your domain names, a trusted person should know what agreements you have in place with advertisers – or at least know where to find your agreements. While advertisers and partners will be understanding if something happens, money is money, and they will eventually expect to have their agreements honored or their payments refunded.
For those of you who rely mostly on PPC, a trusted person should know the contacts at your parking company. You will want to make sure your revenue continues to be paid regularly.
Your important domain contacts, clients, forum login names, and other industry accounts should be known to your trusted person. If liquidation is necessary, you’d want the names to sell for the most money possible, so it’s important that the trusted person know where to sell them.
Your sales and tax records are important things that your trusted person will need to know where to find. The government will still expect to be paid based on your sales from that year no matter what happens to you.
I am sure you will want your trusted person to take over your business or to liquidate your domain names, and they will need to know how to do so. For those of you who have full fledged businesses with strong PPC earnings or developed website earnings, the business should probably be maintained or sold – rather than just the domain names being liquidated. When deciding, you should take your trusted person’s interest in the business into consideration. If you would want your domain names to be sold, you should let your trusted person know what names you own, which are most valuable, and how to sell them.
While your business isn’t the most important thing that someone will be thinking about if something should happen to you, it is important that someone know what to do in the event of an unexpected life changing event.

Selling a Domain Name for $1 Million

Elliot Silver
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10

Subscribe to Elliot's BlogI was thinking about the disconnect between domain owners and end users today and trying to think of ways to bridge the gap. While it may be a bit of an unrelated tangent my mind went on, I came to a simple but accurate conclusion about selling a domain name for a lot of money.
The only way you can sell a domain name for $1 million is by walking away from $500,000. It’s a simple statement, but I believe it’s true.
Several years ago, I was playing Double Down video poker on a cruise. If you’d win a hand, the game would show 5 cards. One card would automatically flip for the player and the player had to choose the game’s card. If you win you get a certain payout, and if you lost, you would lose everything you had earned. Every time you got it right, your winnings would double. You could either double again or collect your winnings.
The long of it is that I won $1,200 by doing this several times, and when I stopped and got 3 buckets full of quarters (and a Jackpot t-shirt). Instead of thinking about how cool it was to win, I only could think about what could have been if I hadn’t stopped. A couple hours later I was playing and had winnings of $1,600 by doing the same thing – only to lose at $3,200.
Point of this is, you never know what you can ultimately get for a domain name if a buyer is motivated enough to buy it. It takes guts to turn down a $500,000 offer, but you won’t get a million dollars for your domain name if you don’t walk away from $500,000.

Domain Investors Face Liquidity Problems

Elliot Silver
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2

Subscribe to Elliot's BlogAny way you look at it, the economic situation is impacting nearly all domain investors. Less PPC and somewhat lower sales means even less revenue for the many in the industry. Without these two revenue streams being at full strength, it’s getting more difficult for domain investors to pay bills. Since you can’t pay your bills with domain names, liquidity problems are something that many domain investors are facing.
If this is the case for you, there are at least two viabile options – both of which involve using your domain names as leverage. Domain Capital and Digipawn are two companies that are willing to give loans to many domain owners with their domain names as leverage. These companies are domain experts, and they are able to value your domain names for lending purposes.
If you are in need of a loan, visit these companies’ websites or drop me a note and I will send you an introductory email.   I don’t work for either company, nor do I receive a commission for referrals.

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