Buying Domain Names

This might be obvious advice, but I’ve used it many times and want to share it with you to get a better deal on a domain acquisition. Oftentimes when I inquire about a domain name, the owner will mention that he has others. More often than not, the name I inquired about is heads and shoulders above his other names. On occasion, there is more than one name I want to buy, and I use it as leverage to get both names at a better price. The owner is happy making more money, and my cost per acquisition is less.

If a domain owner doesn’t come out and tell you he has other names for sale, you might consider asking – especially if a Whois lookup reveals that he has other domain names. Here are a few ways to find out if a person has other domain names that could possibly be for sale:

1) Ask if the owner is selling other names. This one is obvious.

2) You can do a Reverse IP search to see if other domain names are hosted on the same server, although that won’t do you any good if he has his name(s) parked or if he uses a popular hosting company and not a VPS or other dedicated server.

3) Search Google for the domain owner’s name and “Whois” or the domain owners name and address. Sometimes Google will cache a page that has Whois information that other people searched

4) Search Google for the owner’s name + the domain name you want to buy. Perhaps he has a domains for sale page containing this name and others.

5) Do a Registrant Search to find names that are currently owned (or perhaps once owned) by the owner. This is great because a domain owner may have privatized a domain name years back, and now you can see what else he may have.

It’s almost always better to have this knowledge before beginning a negotiation. Get a price for the name you want first, and then say something like, “would you sell xyz.com and abc.com for $x,xxx” where the price of both takes into account a discount on the first name you want.

There have been a few times where I sold domain names for less than I wanted to sell them. The majority were sold as parts of bulk deals that wouldn’t happen without those specific domain names, and I wanted to close the deals at the time, so I included them. I can’t say that I’ve regretted any deals done in the past, but there are a few domain names I’d love to have back in my portfolio.

With the economy performing poorly and many domain owners looking to raise capital (who isn’t?), now might be a good time to repurchase some of these domain names, perhaps at an even better price than you sold them.

The first thing to do is to check to see if the owner has spent time or money on developing a website on the domain name. If not, you may be in luck, especially since the domain name probably isn’t earning as much revenue as it once was. Send the domain owner an email asking if he would consider re-selling it, and make him an offer.

There will be a fine line between lowballing and trying to get your domain name back for its adjusted market value. Just be cautious, as you don’t want to lowball one of your former clients, as this might lead to future lowballing on his part. I’ve recently bought back a few names that I had sold within the last few years, and now might be a good time for you to do the same.

When you’re investing in a speculative domain name, keep in mind that you could have your money on the sidelines for a long time. If you are paying registration fee, it’s not a lot of money to worry about. However, if you buy dozens or hundreds of domain names at registration fee, or if you buy a domain name for a lot of money, it could be burdensome.

This morning, I was reading an article in CNN about researchers at Florida Atlantic University who are currently in the early stages of attempting to generate power from the Gulf Stream. The project uses ocean turbines much like companies harness wind power with wind turbines, and if it’s successful, there could be many ocean turbines installed underwater throughout the world. Fellow domain investor had learned about this potential power source and registered OceanTurbines.com nearly a year ago. Smart thinking!

The only downside is that the article said “If the pilot program is successful, it could take another five to 10 years before the technology can be implemented.” In speaking with Stephen, I know he has a number of similar domain names – like SeaTurbines.com, and his company is all over the solar business. Stephen knows his names won’t be worth big bucks for a few years, but his well-capitalized company is able to hold out and wait for the value to increase.

If you are buying speculative domain names or an expensive speculative domain name, it’s important to realize that your money could be tied up in these domain names for a long time. You need to figure out whether you can afford to hold out or not. I know a lot of people own portfolios of these names, and each year it becomes harder to renew, but they do it because they’ve already figured the previous years are a sunk cost and don’t want to lose their investment.

If you are going to need the money in the short or medium term, perhaps it’s not a smart investment – even if you think it might be the next big thing. Every days something new is the “next big thing,” and you can go broke pretty easily if you are always trying to register everything related to it.