Buying Domain Names

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.

These days, I have been spending quite a bit of time seeking out domain names to buy. It’s relatively easy to buy inventory-quality domain names, but I am almost always looking for good deals on excellent one word .com domain names. The toughest deal for me to pass on is a great one word .com domain name priced at a very reasonable (but) end user price point.

In most cases, these domain names are priced fairly for someone to purchase it to use, but they are too expensive for me to purchase as an investment. I would be asking around the same amount or more if I owned the asset, but there is not enough margin for me to risk my capital.

I have been aggressively trying to buy more great one word .com domain names to augment my portfolio. I have been kicking the tires at quite a few companies where I think domain names aren’t being optimally used or something else has led me to believe I could acquire a domain name for the right offer. Buying domain names from large companies is particularly difficult.

Case in point, I got in touch with the right contact at a very large company a few weeks ago. I made a few offers, and our discussion culminated with a $100,000 offer to buy one of their domain names. I also asked if a decision could be made this week since I am discussing many domain name purchases. She asked to speak on the phone and we discussed why we wouldn’t get a deal done.