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Buying Domain Names

Why I Prefer Expiry Auctions Over Private Deals

As someone who operates a domain investment industry website, I am regularly approached by people looking to sell their domain names. I hardly ever buy domain names when people approach me in an unsolicited manner, but it may not be for the reason you think. Yes, the vast majority of domain names that are sent are domain names I would not hand register, but my preference is to buy inventory types of domain names at expiry auction.

Earlier this week, I passed on a small group of average domain names sent by someone through my contact form. When I passed, the person remarked that they were similar to names he saw that I had recently bought and wondered why I wasn’t interested in making an offer. I gave him some reasons and used my reply as the base of this article.

This morning, I want to share 5 reasons why I prefer purchasing domain name at expiry auctions over buying domain names from people who send them to me:

Follow the Data

One of the best ways to know what domain names to buy is to learn what domain names are selling and why they are selling. It is good to read the weekly DNJournal sales report to see the most valuable domain name sales, but buying domain names that are similar to what is selling at that end of the market is difficult, very expensive, and risky. Knowing what is selling in the middle of the market may be the best education for the majority of people who invest in domain names.

Yesterday, Ed Emery shared some background about one of his recent SquadHelp sales:

.CO Registration Deals for 10th Birthday

10 years ago in June, the late and great Lonnie Borck kicked off the launch of the .CO extension by purchasing e.CO at a charity auction for $81,000. Lonnie didn’t know about the auction until the morning of the event, but he drove to New York City to get together for dinner and ended up winning the domain name and supporting one of his favorite organizations. I remember that day like it was yesterday. Lonnie eventually sold e.CO for an undisclosed amount.

The .CO extension officially launched a month after the auction of e.CO, and the registry is celebrating its ten year birthday this month. Over the years, many startups have used and embraced .CO domain names, and the extension has taken off.

Fitbit.com Domain Name Cost Just $2,000

Fitbit has become one of the most well known brand names in the fitness space. In November of 2019, it was announced that Google would be acquiring the publicly traded company for $2.1 billion. In addition to having an app, the company primarily operates on its brand match Fitbit.com domain name.

Fitbit founder James Park recently participated in the How I Built This with Guy Raz podcast on NPR. In addition to discussing how he built the fitness tracking device company, he also discussed what went into creating the Fitbit brand name and how his team decided on the Fitbit branding.

Domain Investors Provide Liquidity

When I am trying to buy domain names from registrants who have held them for many years, I am frequently told that their domain names are worth more than I am willing to pay. Perhaps they have turned down better offers in the past, or maybe the discussed the value of the domain names with a broker or someone else. Whatever the case is, some people believe their domain names are worth more money than I am willing to pay.

In all honesty, they are probably right. I would not be willing to pay $25,000 to buy a domain name as an investment if I believe it is worth $25,000. Obviously I can not pay an amount of money that I would hope to get if I was selling it myself. So why should someone sell a domain name to me for less than it is worth? Liquidity.

Here are Nat Cohen’s comments about domain investors who bring liquidity to domain registrants. I believe Nat’s company recently acquired Owen.com and Higgins.com, and his commentary is in the wake of those deals:

Report: Airbnb Hosts Building Their Own Direct Booking Websites

When a business operates on someone else’s platform or website, they must play by that company’s rules and regulations. Some businesses that operate on platforms such as Facebook, Instagram, Twitter, and other social networking platforms have realized the limitations and regulations can impact the growth of their business and sometimes cause it to shut down altogether. It may be easier to set up and operate a business on an existing platform, but having to operate in accordance with the platform’s rules can have consequences.

Now, according to a report on CNBC, some Airbnb and other home rental hosts are facing similar concerns on home rental booking platforms:

An excerpt from the article:

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