Buying Domain Names

One of my wife’s friends called me today to talk about a domain name. She mentioned that she is thinking about starting her own business and had a domain name in mind that was available to register. She wanted my opinion on what domain registrar to use.

A question like that is simple for me. More often than not, a friend or friend of a friend will seek me out for help or guidance about an impossible to buy domain name or one that is extraordinarily valuable when their budget is limited. I am sure you deal with those kinds of buyers all the time, so at least credit is due for getting educated before making inquiries.

Domain investing can be a high stakes business. I invest substantial amounts of money to buy individual domain names, with the hope that someone is willing to buy it from me for substantially more than I paid. When spending 5 figures on a domain name acquisition, I need to be right about my retail valuation.

Here are 5 things I usually check before making an offer to buy a domain name:

One question I am asked quite a bit is about how long it takes me to sell my domain names. This isn’t something I really track, so I usually respond by saying that it can be a week or 10 years – it can be a crapshoot and come down to how motivated I am to sell a particular domain name.

For those who are curious about how long I’ve held names in my portfolio, I did a quick analysis of my inventory this morning to give an idea. Interestingly perhaps, all of the domain names I owned in 2007 and prior aren’t domain names I would sell. For instance, I bought TopNotchDomains.com in 2006 and that isn’t for sale because I am using it for my corporate website.

Here’s an approximate breakdown of domain names in my portfolio by acquisition year: