Buying Domain Names

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:

Several weeks ago, Hilco Streambank emailed me to notify my that several domain names were coming up for sale in a bankruptcy auction. One of the domain names in the list stood out to me – AllOut.com. When I played sports as a kid – and even when I play tennis today, I tend to go all out. I like the business and marketing connotations of “all out,” and I have been buying similar types of domain names when I can (SparkPlug.com is another one I recently acquired).

Shortly after receiving and seeing the notifications about the auction, I was in touch with representatives from Hilco Streambank to understand the bankruptcy auction process and learn how I could participate. I started by submitting a bid, and that qualified me to participate in the auction. The domain name was sold in a package with AllOut.net, so my bid would be for both AllOut.com and AllOut.net.

The domain name aftermarket has been performing strongly for nearly a full year now. The last six months have been particularly strong. A look at the DNJournal year to date sales chart proves that, and the publicly reported sales are just the tip of the iceberg considering the volume and value of private sales that are unlikely to ever be reported.

With the considerable movement in the aftermarket, it has become very challenging to buy valuable domain names. When good domain names are available to purchase, the price to buy new inventory is getting much higher as well. My focus is on one and two word .com domain names, but I have seen and heard that other areas (.IO and .CO for example) are also becoming much more difficult to buy at wholesale level pricing.

Aside from my daily lists of upcoming domain name expiry auctions, I don’t spend a whole lot of time analyzing lists of keywords and phrases to find domain names to buy. Most often, I find domain names that would be of interest to me by doing ordinary things in life – reading the news, reading books to my kids, and just reading things in general.

Oftentimes, I will see a word or phrase while doing something and pay a quick visit to the website to see what is there. If the domain name is developed, I will quickly assess how important the domain name is to that business. This will help me determine whether or not to send an offer or inquiry email. For instance, I will be much more inclined to email a registrant if the domain name is simply used for forwarding as opposed to a website that clearly utilizes the domain name for its branding.

If the domain name looks like it could be available for the right offer, I do a quick Whois lookup on the spot. I typically either use the standard DomainTools Whois search or I use the GoDaddy Whois search. If I don’t have enough time to do a Whois lookup, I will either note the domain name in my head or send a brief email to myself so I can remember to do a Whois search later on when I have more time.

Once I have done a Whois search, I will check my records to see if I have emailed the registrant in the past. This will give me some idea about whether or not I should proceed with an inquiry or offer, and it will also tell me where I need to start if I made an offer in the past.

Previously, I spent a fair amount of my time doing keyword searches using dictionaries and thesaurus tools. These days, I have found more names to inquire about as I go about my daily activities.