Buying Domain Names

When I am buying a domain name, one of the attributes I look at is the number of domain names registered with the same keyword in different extensions. This can be helpful to determine the amount of usage a particular keyword or keyphrase has. My thinking is that if a keyword or phrase is used by many different businesses and organizations:

• The value of the matching .com is higher because the demand may be higher.
• There is a greater chance the domain name would be considered generic or descriptive because of the wide usage (not a legal opinion).

This thinking may be a bit deceptive though, and I try to drill down further when I am buying a domain name, especially at auction.

This morning, I was doing some research before bidding on a domain name in auction at GoDaddy. I noticed that the two word .com domain name had been

I am almost always looking to buy good inventory. I primarily seek out great one word .com domain names, but I also regularly participate in auctions for generic terms in the .com extension that would make a good investment. People also regularly send me domain names they want me to buy. Unfortunately, the vast majority of them are not investable for me.

Just because I pass on a domain name buying opportunity doesn’t mean the domain name is worthless. There are plenty of names that are worth a few hundred or a few thousand dollars. Even domain names I can’t imagine selling to anyone can sell to the right buyer. When I pass on a domain name it generally means I can’t see the value in buying it with the hope of making money any time in the near future. My portfolio is filled with “flyers” that may or may not ever sell. I am not going to pay a premium price for these flyers though.

People try to sell a domain name to me on a daily basis. The vast majority are domain names I would

Before buying a domain name in private or at auction, I tend to do a fair amount of research. I would not call this research exhaustive, nor do I fully research every domain name I buy. One thing I try to do is see if the domain name was on the market before, and if so, at what price.

For a variety of reasons (including the emergence of Sedo’s network and Afternic’s GoDaddy listings as well as a greater interest in selling domain names), people have been adding buy it now prices to their inventory. Some of these domain names have the prices listed right on the landing page while others have the pricing information available on a marketplace. Prospective buyers don’t always need to inquire to get the price of a domain name – it is much easier to find prices these days.

Knowing the former owner’s asking price is an important data point for me when buying a domain name, so I try to do a domain name pricing history check when possible. If a domain name held a low asking price, there might not be enough margin in it for me, and I would need to raise the BIN price to justify buying it. I must ask myself why I would have better luck selling it than the former owner. Oftentimes, I can’t justify this and will pass on the auction. Conversely, if the domain name had a super high asking price, perhaps prospective buyers simply passed on the domain name and a lower price point would make the name appealing.

Here’s an example:

My wife and I read to our kids every night before bed. They have their favorite books that change on a regular basis, and they are always adding books to their collections. We read everything from princess adventures, race car stories, animal books, and everything in between.

When I am reading in the evening, I often think about different words and phrases as domain names. I’ll see a couple of words or phrases and note them in my head for when I get a chance to do a Whois lookup later on that evening or the next day. I think childrens’ books are a great source of inspiration for domain name ideas.

Kids’ books generally have