Domain Sales

I don’t necessarily like it when a buyer stretches out payments for a domain name, but offering it can be a smart move. I recently sold a domain name, and during negotiations, the buyer indicated that funds were a bit tight at the moment, but he wanted to buy the domain name. To keep the negotiation opened and to ensure that I was able to get my asking price, I offered him a payment plan, and we were able to come to an agreement.

Here’s what I recommend if you offer a payment plan or are asked to offer one:

• Consider using an escrow service that Moniker offers or Escrow.com offers (need to contact them directly) to ensure both parties live up to their end of agreement with an impartial company acting as an intermediary.

• Domain owner should keep possession of the domain name (or see above) until final payment is made. Owner can change DNS if necessary and asked.

• Make sure everything is in writing so buyer and seller have the same expectations. I recommend having a domain attorney write the agreement, especially if it involves a considerable sum of money.

• Be clear on what happens if buyer stops paying. In my opinion, the domain owner should keep all previous payments and the domain name.

I’ve discussed at length methods I’ve used to sell domain names to end users. Sometimes my efforts are successful and pay off, and other times, they do not. Here are a few things I’ve learned which may help you the next time you try and sell a great domain name to an end user buyer:

Many competing companies: In industries where there is a lot of competition, having a good domain name can make a company stand out from its peers. Whether it’s because of the SEO or because the company wants to “own the brand,” there will always be at least one company that wants the category defining domain name, even if the category is somewhat small. As long as there are many competitors, at least one company will want your exact match keyword .com domain name.

Small and large companies within target: I have found that there should be a good mix of small and large companies in a vertical to best sell a non-ultra premium, but category defining, domain name.   It’s difficult to get to the decision maker with a huge corporation, but it’s quicker with smaller companies – especially when it comes to decision making.   Boiled down, it would be tough to sell a soda domain name when you are only pitching Coke, Pepsi, Dr. Pepper…etc rather than an industry with a mix of companies.

Generic domain names are owned by companies: One thing I noticed when I made the successful end user sale I wrote about was that many of these companies didn’t use their brand names in their website urls. They used descriptive terms such as their area + their industry. When I saw that and had an industry keyword, I knew at least one company would want it, and I was right.

Companies selling that product or service: If you have the exact match domain name of a product or service, it’s likely one of the companies would want to buy it. Although a lot of companies aren’t completely knowledgeable about SEO and/or Internet marketing, many will recognize that this particular type of name would have value to them. It’s your job to convince them of this.

High profit margin on product or service: Similar to above, if that product or service is profitable, it’s more likely they will be interested in the domain name. If a company makes $1 profit per customer and they don’t sell many of these products (and it isn’t considered a loss leader) they probably won’t (or can’t afford to) spend a lot of money for the related domain name. If a new customer will net them big bucks, they can and will be able to justify a higher expenditure.

Own the same domain name in another extension: If a company owns the exact same domain name as you, just in a subpar extension (.net, .info maybe .org), it’s likely they would have wanted the .com if they could have bought it. Maybe the .com wasn’t for sale and the company didn’t know how to inquire about it or maybe they couldn’t afford the .com in the aftermarket when they bought the other extension. Whatever the case is, you know they like this term, and will probably want the .com. Just be cautious if the other extension is developed and there is a potential that the term isn’t generic enough. They may use your solicitation email as a sign of bad faith in a UDRP proceeding.

What else do you look for when selling domain names to end users?

Don’t worry… despite the title of this post, I am not going to try and sell you some magical e-book on how you can make $50,000 a year in extra income. I am going to tell you about something I am trying on my own, and I will update the post in a few weeks to let you know how it is going.

I blogged about an end user sale that I made a couple of weeks ago. The domain name wasn’t newly registered, but I did pick it up on the drop for a few hundred dollars and sold it for much more. In the comment section, I also wrote about another end user sale that I made last week with a newly registered domain name following the same strategy as the sale outlined in the post.

On Friday April 2, I hand registered ExecutiveHeadshots.com, and on the following Monday, I sent off about 20+/- emails to companies listed in Google for that keyword. I received 4 replies with interest seeking the pricing, and I came to a sales agreement with a buyer after negotiating for a couple of days.

The name is currently in escrow with Escrow.com, and unfortunately the buyer chose to mail a check to Escrow.com rather than pay via Paypal, so the sale won’t close for a week or two while the check clears. However, I turned an $8.00 registration into a very strong sale (although I won’t reveal the price as mentioned before).

With two successful end user sales in a month, I started thinking about ways to blow this out and make some real money. If I am able to register one GOOD domain name that a company would want either to re-brand or to help with SEO each week for a year, and I sold it within a week for $1,000 +/-, I could make $50,000 in extra income a year.

It’s probably not going to be as easy as it sounds, but I am going to give it a try. I registered a domain name on Friday and started pitching it to end users today, with one reply already. Once I have some results, I will post them, but I wanted to let you know what I plan to do ahead of time.

One piece of advice I can offer now is that actual product (not brands) or service domain names will be much better than descriptive domain names in most cases. For example, AwesomeHeadshots.com would not be a good alternative to ExecutiveHeadshots.com, as many photographers use “Executive Headshots” in their meta description and page titles since they cater to people looking for executive headshots, despite the fact that they may want awesome headshots 🙂