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Buying Domain Names

Doing the Legwork to Check Investment Viability

Hedge funds and private investors that invest serious amounts of money in publicly traded companies have many tactics to understand how a company is performing before financial reports are given. People are hired to count cars in parking lots, check inventory on retail sales floors, ask employees of suppliers for production details, and a variety of other means to ascertain non-public information. Domain investors should consider a similar strategy using different tactics.

I am not an investor in non .com domain names. That should be pretty obvious. Despite this, I am emailed regularly asking me for thoughts on buying new gTLD domain names. I believe investors would benefit from doing end user market analysis to check their investment viability. This is important for non-.com domain names, but it could also be done for the non-blue chip .coms (one word, 3/4 letter…etc), too. People should understand the market before investing thousands of dollars in speculative domain names.

Here’s what I would do if I was going to the legwork to evaluate investment viability for a type of domain name I was unsure about:

$18 Purchase to $4,999 Sale to $150 Million Startup

Late last Summer, I placed a $18 Discount Club backorder on a domain name at DropCatch.com. Once it became eligible to transfer, I spent under $10 to transfer it to my account at GoDaddy. I listed it for sale on Afternic for $4,999, and it sold within the last several weeks at the BIN price without any negotiation. After the 20% commission and acquisition + transfer costs, the total profit is somewhere north of $3,950.

Since the domain name sold, I have been periodically checking the domain name to see who bought it and why. Recently, I noticed a new website on the domain name, and it turns out a stealth startup with around $150 million in funding was the company that acquired the domain name. It’s the perfect brand match .com domain name for their business, and it suits them well.

Impress Them With Your Domain Names

As he often does, Peter Askew shared a nugget of wisdom about domain name development I can appreciate:

Besides operating this website and Embrace.com, I have pretty much resigned from web development projects. Peter’s comment still resonated to me because I share his sentiment when buying domain names in the aftermarket. When I tell someone I own a particular domain name – be it at a social gathering or professional event – I want the other person to be impressed. I want them to think to themselves – or ask me – how the heck did he get that domain name?!

Jason Calacanis Looking for a Premium Domain Name

Angel investor and entrepreneur Jason Calacanis is apparently looking to purchase a domain name. He put out a request on Twitter asking people to DM them if they have premium .com domain names for sale:

Track Down a Domain Owner Who Uses Whois Privacy

Whois privacy shields a domain registrant’s contact information from public view. When private Whois is enabled on a domain name, it can be more challenging – if not impossible – to track down a domain name registrant to buy the domain name. There is no way to see who registered a domain name that has private Whois records short of litigation or a UDRP filing.

That being said, there are several ways I have had success tracking down domain registrants who utilize Whois privacy proxy services. Here are some of the tactics that can be used to learn who owns a domain name that is privately registered:

3 Letter Domain Names Don’t Always Make Great Investments

Shorter is better is something my parents have always told me growing up. While this may hold true in terms of height, it is not always the case when it comes to some domain names.

Over the years, I have owned several three letter .com domain names (NLC, MYV, SHS, KJP, RER, PJP, RSN, and probably a few I have forgotten about). LLL.com domain names tend to be in high demand, and they can sell for amounts that range from five figures to seven figures, depending on the letters and demand for them. While the 3 letter .com domain name market is quite liquid, not all 3 letter domain names are investment-grade.

Someone shared the tweet below from Shifang Yuan from Yuming.com. The tweet came in response to someone else’s question about the value of two types of .IO domain names:

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