Advice Archives - Page 192 of 211

Social Networking to Sell Domain Names

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September 9, 2008

On the treadmill last night, I was thinking about how to get around administrative assistants and other obstacles in the way of directly communicating with a decision maker. Most of the time at mid to large companies, the decision maker has an admin who reviews all emails and phone calls before passing them through. If something appears to be spammy, there’s a good chance the message will be deleted before the decision maker sees it.
In the day of Linkedin and Facebook, more and more people (including decision makers) are signing up for accounts on these networks. Since it isn’t always business that is discussed on these networks, I would assume that many connect their personal email addresses to the account. With the help of a mutual friend – or maybe even a cold call, you can get in touch directly with the decision maker. Although it will still be difficult to get in touch with a decision maker at a large company, it’s possible to do this to those at small to medium size companies.
The difficult thing is determining who the decision maker is. Social networking sites actually play a role in determining who to contact, as most allow the decision maker to list his credentials right on the site. If you get in touch with the wrong person, there’s also a good chance that this person will tell you who the right person is.
Instead of sending a blind email, social networking communications could help you get in touch with the decision makers you need to reach. The caveat is that I just thought of this and haven’t tried it yet.

Grow Your Mini Sites

Elliot Silver

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September 9, 2008

10

I’ve been busy today working on the just launched Secaucus.com, which I had created by Rick and his guys at aeiou.com. Secaucus is a city in New Jersey, located about 4 miles from Manhattan. It was voted the 11th best city to live in New Jersey in 2008 by New Jersey Monthly magazine.
While the mini-site Rick and his team created looks great, I wanted to add more content to the site. IMO, content is what drives traffic to a site, and the more content you create, the more traffic the site will receive. As a result, I expect to earn more Adsense revenue and hopefully get advertisers to want to buy links and advertising space.
Since Secaucus.com is the smallest of my geo websites, I wanted to build a mini site with good information but required little upkeep and maintenance. I just started adding commonly searched for information, such as lawyers in Secaucus, Secaucus gas prices, and Secaucus banks. I will continue to add pages with the hope of building traffic and generating revenue.
My aeiou.com mini site template got me off to a great start, and I am going to take off running with it.

They May Be Watching Everything You Do

Advice

Elliot Silver

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September 6, 2008

10

One of the neatest innovations in the supermarket industry was the introduction of loyalty rewards cards. Supermarket customers sign up for a loyalty card, and the supermarket gives them special discounts that aren’t available to regular customers when the card is swiped at the point of sale. Not only do these loyal customers save money, but they are also privy to special offers from the supermarket. Sounds like a great deal, right?
Well, the reason supermarkets and other businesses are so happy about these rewards programs is because of the fantastic data that comes along with their usage. When you use your rewards card, the supermarket knows how often you buy milk, when you buy beer, what brand of condoms you use (regular or magnums), and a troth of other valuable personal data that you would probably be reticent to share. When you think about it, this is kinda scary.
This same type of thing happens every day in the domain industry, too – although it might not be as obvious. When you do a Whois look-up, that information may be stored by the company where you searched. When you purchase an appraisal or use a free appraisal service, that data may be stored, too. Same goes for your accounts with your parking companies – they know how much traffic your names receive, which niche makes the most money, and which of your names is your biggest earner. Even when you complete a confidential sale using an escrow service, the buyer and seller data may be seen by the escrow company.
I haven’t heard of any cases where this power has been abused, but you should be very mindful of the potential wealth of data you are giving out by performing every day business tasks. You should be especially careful if the companies or principals of the companies can use the data for a competitive advantage. I am all for domain companies hiring people who are familiar with the domain industry and how domain investors think. However, with that comes the potential for privacy issues.

Finding End User Prospects

Elliot Silver

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September 4, 2008

8

Finding end-user prospects for your category defining domain names is just as easy as searching Google for that term. Chances are fairly good that if the category is at least somewhat competitive, there will be several advertisers on the top and side who are paying tens, hundreds, or thousands of dollars a day in pay per click advertising. If someone is paying this much money to ensure their top position in Google, they may understand the argument to spend money on their category defining domain name.
I personally prefer to reach out to the SMBs (small to medium sized businesses) who advertise on Google. Compared to large companies, there is much less red tape involved in decision making with SMBs, and you can have an answer in less time than you would if you went to a large company. Many times, the decision maker is also the person who signs off on the monthly Google ad spend, so this is a good opportunity to speak with the right person.
My note to the Whois contact will explain how I found the company, and how I believe the domain name can help them. Not only can a category defining domain name help save money because of the type-in traffic (if that is true), but the category defining domain name will give them even more credibility. This is much more pertinant to the SMBs who are probably competing with the large brands for positioning in Google.
For some companies, it makes sense to buy a domain name for $25,000 when they are spending $5,000 a month in Google Adwords spends. For others, they prefer to market their brand rather than use a generic domain name. If a company has an issue with branding, I like to recommend they look at Vodka.com, Baby.com, and Loans.com to show brands that have successfully used generic domain names in advertising without watering down their brand.
Companies that spend money on PPC advertising buys are generally more aware of the power of a good domain name. Educating others is important, but I will let Google and Yahoo spend their time and money educating. I’ve found it to be very tough to sell an expensive domain name to someone who doesn’t really get it. There are enough companies out there that do get it.
If you want an example of a company that gets it, have a look at this week’s domain sales report on DNJournal. Rick Schwartz just sold RoomDividers.com to the operators of OrientalFurniture.com, who currently hold the #1 side banner ad spot for the term on Google. This is clearly a company that gets it, and in time, they will probably be able to rely less on PPC and more on organic search traffic. Smart move.

Domain Tax Tip

Advice

Elliot Silver

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September 3, 2008

9

I should preface this post by saying I am not anything close to a tax expert, and in fact, I received a D in Financial Accounting in college (granted I was pledging a fraternity). Nevertheless, I want to talk about taxes with regards to your domain business. I know it’s barely September, but if there are things you can do to lessen your tax burden before the end of the fiscal year, now is the time to do it.
The tax problem I generally have with my business is that I frequently spend quite a bit on acquisitions after a big domain sale, and taxes are an after thought. For example, after selling a domain name for $80,000 and making a $40,000 profit, I am often inclined to go out and buy a $70,000 domain name. However, assuming a 35% tax rate (state and federal combined), I would owe the government $14,000, leaving me with $66,000. Since taxes aren’t taken out at the time of the sale, I might feel safe spending $70,000, but if I develop the new name, I have to come up with the extra $4,000.
That said, there are ways to lessen your tax burden by spending money on expenses such as new computer equipment, office upgrades, web development, research, self-employment pension plan contributions… etc. All of those with the exception of the SEP contribution are things that need to be considered before the end of the year. It doesn’t make sense to go out and spend a boatload of money in the middle of December simply to lessen your tax burden. You will end up with lower quality things since you are essentially spending to spend.
My best piece of tax advice is to speak with a professional accountant. While an accountant may not know the ins and outs of your domain business, he should be able to understand the jist. Regardless of his experience with a domain-related business, your accountant can give you general business tax advice, including how to lessen your tax burden.
Again, I am not a tax expert, but I believe now is the time of year to have a conversation with your accountant to show him how you’ve done so far and see how you can run your business more efficiently. As your business grows, you will want to meet with him more often, but at the very least, a once annual check-up is smart (aside from when he is doing your taxes). Also, now is a good time to teach him about your domain business, as he will have more time to learn now than in March or April.

Types of Domain Names I am Buying

Elliot Silver

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September 2, 2008

65

With as much uncertainty as there is in the domain market these days, I am being more selective about domain names that I buy. As PPC is dwindling, there is less money being reinvested into the domain market by domain investors. Since much of the domain sales market has been fueled by domain investors reinvesting their PPC income, that area of the market seems to be stagnant. End users are still buying domain names, but as most people know, it’s a tougher sell.
In that vein, I am being more selective about the names I am buying. When I think about buying a domain name, on top of the standard research I do, I ask myself how the name could be developed into a website. If there is no obvious way that a business could be established on that domain name, there isn’t much of a chance I am buying.
I like geodomain names for this reason. It’s fairly easy to imagine how a city names (in the .com) can be developed into a business. While it’s not easy to generate sustainable revenue to make a living, knowing what the site should feature is a no-brainer. Cities, regions, and countries are like brands with which people are familiar. If you asked a random person on the street in California what Burbank.com would be without prior knowledge, he would probably say, “a site with information about Burbank, California.”
I also like category defining product related domain names like TruckRims.com (which will be auctioned off by Rick Latona at Traffic) or ComputerSpeakers.com (which I once owned). If you know what to expect on a website before you’ve ever seen the site, the name is probably a good name. It’s important, however, that a business can be built around that concept – otherwise, how will you make money?
One problem I am having is that many end user companies also know how strong these product and service related domain names are. I have seen quite a few Whois lookups lately where names are owned by CSN Stores or Net Shops. These companies get it and they own some fantastic product-related domain names that probably won’t ever be on the market.
If you have great .com product related domain names, drop me a note in the comment ection. I had once offered up to $100,000 for a city .com domain name, but that didn’t yield a single viable city .com name unfortunately. I am not looking for anything other than .com right now, nor am I looking for brandable type names. I am looking for names like WindowTreatments.com, Dehumidifiers.com, WashingMachines.com… etc. If you have a fantastic name like this, I am looking – and if I can’t afford it, I know several friends who have much larger budgets for these types of names. The problem is that end users own most of these names. Some are starting to understand the value – which ultimately is a very good thing for domain investors.