Challenge of Being a Domain Flipper

Elliot Silver
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52

Most of my business comes from flipping domain names. I buy domain names in private or at auction, and I try to sell them at a profit as quickly as possibly. I subscribe to the churn and burn method of domain sales, aside from those names I keep for development.

One of the most difficult aspects of being a domain flipper is deciding whether to quickly flip a domain name or hold out for a higher offer. To illustrate this, let’s say I bought a domain name for $20,000 and received a $30,000 offer to sell it a week later. For most people outside the domain industry, a 50% ROI in a week’s time is outstanding, especially when we’re talking about making $10,000 profit. However, if I feel the domain name is worth $50,000 minimum, I would likely pass on the offer.

The issue with passing on a $30,000 offer in the hopes of selling it for $50,000 is that the higher offer may never come. Additionally, the $30,000 offer may not be there days or weeks later should I decide that I want to sell the domain name. It’s easy to make an assumption that a domain name is worth a specific figure, but getting a financial commitment for that number is a different story.

The need to maintain liquidity is always in consideration, too, because I need to have enough cash on hand to pay bills and make other acquisitions as well. This is critical because if I have inventory that can’t be profitably turned into cash, my business is sort of dead in the water. I always need to be investing to keep growing my business.

If you buy and sell domain names, how do you cope with this challenge of being a domain flipper?

Another Way to Use End User Lead Generation Website

Elliot Silver
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4

I previously discussed how I used the Estibot lead generation tool* and how I used LeadRefs.com to find buyers for domain names I was looking to sell. I also discussed how you might go about using the tool to find a buyer. I want to share an “alternative” way to successfully use tools like these to sell domain names.

When you are considering the purchase of a domain name in the aftermarket (like via auction or a private sale), you might want to plug the domain name into the tool to see if there will be adequate leads for a sale. I don’t know what number would be considered adequate, but I would think 20+ leads means you’d have a solid chance of finding a buyer.

You might also want to see if those similar domain names are developed and who owns them.  If a company understands that a descriptive, keyword domain name will have value to them, they might also want to buy this one if you are able to buy it at a good price and re-sell it.

Once you find some of these leads, you might take a next step and review a domain name sales history website like NameBio  to see if any of those other domain names are listed as past sales. This can give an indication of when and how much the owner paid. You can and should do a Whois History search to see when the other domain names were acquired.

While it’s great that another company values keyword domain names, I believe there is a difference whether they hand registered the name(s) several years ago or bought it in the aftermarket. I think the later is more  indicative  of a company’s willingness to spend money on domain names now.

Keep in mind that you don’t want to email potential buyers before you buy the domain name. I don’t think that’s a smart move, especially because they might try to buy the name on their own. Additionally, I don’t believe you can use either tool for unregistered names, so you can’t use it to find buyers for names you want to hand register.

*Note: I took the first article down after comments were expressed that I made it sound too easy while my success was predicated on the quality of my domain names.

20% of DomainFest Auctions Have Bids

Elliot Silver
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7

With a couple of days to go until the DomainFest live auction, a little under 20% of the auctions already have bids. The live auction, also found online via Snapnames, will take place on Thursday,  February  2nd at noon EST. I have highlighted the domain names I like in the auction and welcome your feedback.

Domain Name Reserve Current Price Bids

  • stripmall.com $201 – $500 $425 5
  • civilunion.com $1,001 – $2,500 $1,650 3
  •  avengers.com $501 – $1,000 $691 3
  • qe.com $25,001 – $50,000 $65,000 2
  •  californiarolls.com $201 – $500 $325 2
  •  rentaltrucks.com $5,001 – $10,000 $5,251 1
  • guitarclasses.com $5,001 – $10,000 $5,200 1
  •  margo.com $2,501 – $5,000 $2,500 1
  •  liberalartscolleges.com $1,001 – $2,500 $1,234 1
  •  weddingcards.net $501 – $1,000 $590 1
  •  antiqueguide.com $501 – $1,000 $500 1
  •  plasmatv.com $25,001 – $50,000 – 0
  •  12.com $750,001 – $1MM – 0
  •  1800business.com $10,001 – $25,000 – 0
  •  activitycenter.com $1,001 – $2,500 – 0
  •  autosupply.net $201 – $500 – 0
  •  banquethall.com $10,001 – $25,000 – 0
  •  bargain.com $750,001 – $1MM – 0
  •  cardswiper.com $1,001 – $2,500 – 0
  •  catfood.com $50,001 – $100,000 – 0
  •  cheyenne.com $100,001 – $250,000 – 0
  •  cloudmusicstorage.com $501 – $1,000 – 0
  •  democracy.com $100,001 – $250,000 – 0
  • drill.com $25,001 – $50,000 – 0
  •  eco.org $100,001 – $250,000 – 0
  •  emails.com $500,001 – $750,000 – 0
  • empire.com $100,001 – $250,000 – 0
  •  eo.com $100,001 – $250,000 – 0
  •  eve.com $500,001 – $750,000 – 0
  •  feuds.com $5,001 – $10,000 – 0
  •  guavas.com $501 – $1,000 – 0
  •  homeowner.com $250,001 – $500,000 – 0
  •  host.com $1MM – $5MM – 0
  •  hotcoupons.net $201 – $500 – 0
  •  icard.com $5,001 – $10,000 – 0
  •  internetradio.com $100,001 – $250,000 – 0
  •  jackpot.com $750,001 – $1MM – 0
  •  juice.com $750,001 – $1MM – 0
  •  liverdonor.com $201 – $500 – 0
  •  loveline.com $10,001 – $25,000 – 0
  •  nurseries.com $25,001 – $50,000 – 0
  •  planners.com $50,001 – $100,000 – 0
  •  platinum.com $750,001 – $1MM – 0
  •  prescriptionrefill.net $201 – $500 – 0
  •  promo.com $1MM – $5MM – 0
  • qr.com $250,001 – $500,000 – 0
  •  reconnect.com $50,001 – $100,000 – 0
  • security.com $1MM – $5MM – 0
  •  servers.com $250,001 – $500,000 – 0
  •  sox.com $50,001 – $100,000 – 0
  • sportstherapist.com $1,001 – $2,500 – 0
  •  surveillancecamera.com $10,001 – $25,000 – 0
  •  trinkets.com $10,001 – $25,000 – 0
  •  unplugged.com $100,001 – $250,000 – 0
  •  videodownloads.com $10,001 – $25,000 – 0
  •  vintagemirrors.com $501 – $1,000 – 0
  •  work.com $1MM – $5MM – 0
  •  workscited.com $10,001 – $25,000 – 0
  •  xeam.com $501 – $1,000 – 0
  •  xegg.com $1,001 – $2,500 – 0

As always, this is going to be an exciting auction to watch, as there are several domain names I could see selling for 6 figures. For instance, Empire.com would seem like the perfect name for insurance giant Empire Blue Cross and Blue Shield.

What are your favorite domain names in the live auction?

How I Used LeadRefs.com

Elliot Silver
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18

I wrote a post yesterday recommending LeadRefs.com as a source to find potential domain buyers. I want to share some additional insight and information to help you potentially close a deal.

First off, it may or may not be okay for you to send multiple email messages trying to sell domain names to people you don’t know. I am not a lawyer, and I am not going to interpret any laws that may or may not exist in your locality. I am personally opposed to sending bulk, untargeted, and unpersonalized spam emails.

That said, I think the best possible domain acquisition prospects are people and/or companies who already own descriptive domain names. They either realized  certain types of keyword domain names have value back in the day or they recently bought them, which may even be better. They likely don’t need a big sales pitch or any sales pitch at all to sell them a good domain name that will fit within their business strategy.

More important than the leads are the domain names and prices. You can have the best sales letter, but if you’re trying to sell a crappy, hyphenated .info domain names for $5,000, it’s not going to work. I almost exclusively use exact keyword .com domain names when I am trying to find a buyer. I don’t try to do lead generation for brandable domain names or call to action names.

I try to keep my email simple and to the point these days. I might write something like this:

“I am the owner of xxxx.com, and I thought your company might be interested in purchasing it. The price of xxxx.com is $x,xxx, and payment can be made using Escrow.com or an escrow service of your choice. I am offering this domain name to several companies, and the first to agree to the price will have the opportunity to purchase xxxx.com.”

I think prospecting for buyers is a very good way to sell domain names. Companies that already own solid descriptive domain names that are similar to yours make great prospects.

Update: Cheesecake.com Sold

Elliot Silver
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16

Several months ago, I learned that Cheesecake.com had been listed for sale in September, and Brooke Hernandez of Domain Advisors was representing the seller of the domain name and website. According to Toby Clements, brother of one of the owners, Cheesecake.com was recently sold.

From today’s TobyClements.com  domain sales newsletter:

“On a completely different note, I want to give a shout out to my brother, David Clements and his business partner on Cheesecake.com, Harvey Kaplan.

They just sold Cheesecake.com for an undisclosed amount. They bought the domain from us in Milan, Italy back in 2010 and David has put in a lot of time and effort to develop it out. I don’t know what the number was, but I know that he has a big smile on his face, therefore it must be a nice one.“

The current owner of Cheesecake.com appears to be GourmetGiftBaskets.com, a company based in Manchester, New Hampshire specializing in gift baskets. Clearly, the company understands the value of descriptive domain names, and will likely become a leader in the cheesecake business.

I reached out to GourmetGiftBaskets.com for comments about Cheesecake.com and its plans for the website, and I will update this if the company is willing to offer any details about its acquisition.

*** UPDATE ***

I received an email from Ryan Abood, President & CEO of GourmetGiftBaskets.com, and he provided some additional information about the plans for the domain name and website:

Read More

LeadRefs.com Works

Elliot Silver
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32

A few days ago, I received an Instant Message from an acquaintance who told me about a new (free) service his company, First Beat Media, recently launched – LeadRefs.com. The site aims to help domain investors find buyers for domain names.

Essentially, the service does Whois searches for similar domain names and provides contact information for those domain owners. I assume the company uses a proprietary algorithm to determine which domain names are similar enough to the domain name for sale that it might be worthwhile contacting the owner.

I didn’t reply immediately to the IM because I was in the middle of a couple things, but I visited LeadRefs.com after dinner. I did searches for several domain names I hadn’t been able to sell during the last year, and I sent several emails to potential buyers.

One domain name was a real estate domain name I bought in the aftermarket last year. I sent 5 emails to prospective buyers for this domain name, including one at 8:36. Two minutes later, I had an offer for the domain name, just under my asking price, and I agreed to do the deal. Within an hour, the deal was finalized using Escrow.com.

I don’t recall closing a deal so quickly in the past. Additionally, I received replies from other potential buyers asking for prices. The domain name I sold was priced, and I used a fairly simple email to sell the domain name.

With great domain names, you don’t really need much effort to sell it if you have a targeted audience. This tool helped me close a deal, and I am absolutely going to use it again.

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