Quick Tip to Buying Good, Saleable Domain Names in the Aftermarket

Elliot Silver
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One thing I look for when buying a domain name is to see how many companies use that exact term as a part of their domain name. If companies are using more specific domain names for their websites, the generic term will usually be highly valuable to at least one company that wants to be THE exact match .com. With this exact match name, you can usually command top dollar.

For example, there are a lot of law firms that use the term “DefenseLawyer.com” in their domain name. You have everything from descriptive names like CriminalDefenseLawyer.com to geographical like NewYorkDefenseLawyer.com and everything else in between. Owning the primary generic term would presumably be of interest to many of those companies. This is generally the case with most exact match .com domain names.

By doing a Google search for the exact match .com name, you will see all of those developed websites that use that term in their domain name. There is your first round list of end user prospects when you look to sell the domain name. You can also search for that exact term without the domain name, such as “defense lawyer” in my example, and then you can see what I did to sell one of my domain names to an end user company.

Obviously the term needs to be generic, so something like VolvoDealer.com wouldn’t pass that test, even though there are a number of dealerships that use the term “VolvoDealer.com” in their domain names.

Successful End User Sale From Start to Finish

Elliot Silver
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112

I want to share information about a successful end user sale I made with a domain name I recently acquired on Snapnames. Out of respect for the buyer, I am keeping the name and price private, but that’s not really important for the sake of this article.

I was looking through Snapnames a couple of weeks ago, and I saw a niche category defining domain name with one bidder. The name is one aspect of a large industry, but there are companies that specialize in this area. The GAKT numbers are decent, and there are a lot of companies that use this term in their domain names (CityXxxxxxXxxxxx.com for example).

As the auction progressed into its final minutes, it shot up from under $100 to several hundred dollars, but I was the winning bidder. I know the domain investment company I was bidding against, so I knew that I wasn’t battling an end user who would have more knowledge about the actual industry value than I could have.

As usual, I offered the domain name for sale to some of my clients, but there wasn’t interest. I was concerned that I possibly over paid for the 10 year old domain name, but I thought a company that specializes in this would be willing to pay above what a domain investor could justify. I did some Google research using the term (in quotes to ensure this exact term was being used), and I sent prospects the following email:

Good afternoon,

I noticed that your company is listed (used the word “advertising” to companies that are paying for Adwords) on Google for the key phrase “xxxxxxx xxxxx,” and my company is selling the exact match domain name “XxxxxxxXxxxx.com. The domain name was created back in January of 2000, and developing it could provide a SEO boost.

If you are interested in acquiring XxxxxxxXxxxx.com, please let me know. I am offering it to several xyz companies in the next few days.”

Regards,
Elliot

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Elliot J. Silver
Top Notch Domains, LLC

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I sent a total of 24 emails to prospective buyers using the contact forms or email addresses available on their websites. In total, I received 7 replies, all of which were from people that were interested. A few people said they’d love to buy the name but times were tough. A couple suggested I hold the name for another year or so to increase the value because that particular business is just now seeing a recovery.

I received two offers – one for under $1,000 and the other in the thousands of dollars range from a NYSE publicly traded company that happens to be the leader in the industry. Although I attempted to negotiate, they stuck to their initial best offer, and I agreed to sell them the domain name. We used Escrow.com for the transaction, and the transfer/sale was finalized this week.

I believe I sold the name for much more that it would have sold to another domain investor. I know there are people doing this type of thing every day, and I want to share my approach from start to finish.

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Please help me raise funds for the Ronald McDonald House

Some Sales May Not Seem to Make Sense to Me, But They Make Sense to The Buyer

Elliot Silver
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12

I frequently see domain sales reports that don’t make a whole lot of sense to me at face value. The sales prices may seem off the charts compared to names I believe are similar. Does this mean that a sales venue or seller has fraudulently reported it or that there was something else nefarious that caused a sale to happen? In most cases, that is unlikely (especially because Ron does his best to verify sales). It’s more likely that the people analyzing the sales – like myself – just don’t have enough information about the sale in order to form an educated opinion on it.

As I have mentioned in the past, you sometimes need to overpay to get the domain name(s) you want or need for a project. Sellers frequently need to be convinced to sell their domain names, and it can take a significant offer to make it happen. With a proven business model or a strong business plan, these domain acquisitions may make sense to the buyer, although they leave others shaking their heads.

Likewise, a domain name may have certain attributes (like type-in traffic) that results in significant revenue opportunities. When this is the case, a buyer may have a plan to monetize the traffic much better than the seller, and he can therefore pay more for the domain name than others would value it at. A sales price may seem high, but in reality, the price is favorable to the buyer.

Aside from questioning the validity of specific sales, another thing that some people do is transpose their perceived rationale for a domain sale onto the value of their own domain names.   “XYZ.com sold for $100,000, so my domain name, e-XYZ.net must be worth $10,000,” some people exclaim. This is usually not the case since domain names are unique.

While abnormal domain sales take place all the time, uninformed domain investors shouldn’t question the validity of the sales without any type of evidence (other than their own perception), especially in a public forum. Further, domain investors shouldn’t presume their domain names are worth the same amount since all domain names are unique assets.

Good Time to Use Godaddy for New Domain Registrations

Elliot Silver
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16

Godaddy LogoAlthough I have pretty much consolidated my domain portfolio at Moniker, I still use Godaddy from time to time when I buy newly registered domain names. I want to share an example of when and why I believe it’s smart to use Godaddy for new domain registrations.

On occasion, I buy hand registered domain names with the hopes of quickly re-selling them to other companies or domain investors. When domain names are newly registered, they aren’t able to be transferred out of the registrar until 60 days after registration due to ICANN policy.

Godaddy is the largest domain registrar by far with tens of millions of domain registrations under their control. Many businesses use Godaddy, and many domain investors also have accounts at Godaddy. If a company doesn’t have an account at Godaddy, it’s more likely they will have heard of Godaddy than another registrar (except maybe Register.com and Network Solutions).

When you make a sale of a newly registered domain name, it’s much easier to push it to another Godaddy account (which most people have) rather than having to explain that it can’t be transferred out from another registrar. Telling someone that a domain name that they are buying for $2,000 was registered in the last 60 days may be a deal breaker.

Using Godaddy to register new domain names can make a sale go more smoothly, and that’s a reason why I use them.

Yahoo Sells MusicVideos.com, LookUp.com, and FreeComputers.com to True Magic

Elliot Silver
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10

Yahoo!In a $250,000 deal that took place on Sedo last week, Yahoo sold the domain name MusicVideos.com to Merlin Kauffman’s True Magic, LLC. According to some analytics that I have seen, MusicVideos.com gets considerable traffic – nearly 1,000 unique visitors a day according to Compete, despite the fact that it hasn’t been promoted in quite some time. In the week since acquiring the domain name, Kauffman’s company already completed another deal and re-sold it.

True Magic also recently bought LookUp.com from Yahoo for $17,500 and FreeComputers.com for $13,500. His company plans to develop LookUp.com into a resource for reverse phone lookups, people lookups, background checks, etc. This is the perfect domain for these plans. According to Kauffman, his company is “always on the lookout for opportunities to buy and broker premium domain names.”

From what I have heard through the grapevine, Yahoo is looking to sell other domain names as well. It’s a bit surprising that the publicly traded company (YHOO on Nasdaq) is selling great domain names like these, but I suppose if they have no plans for the domain names, they might as well raise some capital.   Sedo acted as the domain brokerage for these deals.

As you may recall, Yahoo also sold Contests.com for $380,000 at the Domain Roundtable conference auction in June of 2009. That domain name was acquired by National A-1 Advertising.

All of these names were registered to a company called DNStination, Inc at the time of sale. However, as the Whois history tool shows, Yahoo was the registrant – MusicVideos.com, Lookup.com, and FreeComputers.com. As an FYI, Oddpost.com is a domain name that was registered to Yahoo and then switched to DNStination, Inc at around the same time as the others, despite the fact that Yahoo bought the company.

New Domain Aftermarket Sites

Elliot Silver
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29

In the last couple of months, I have learned about several new domain aftermarket sales websites. Most of the new sites haven’t been started by amateurs, but rather by professional domain investors who make their living in the domain space. Here are a few of the newer aftermarket websites:

DomainMarket.com – This site was founded by Mike Mann, the successful domain investor who founded BuyDomains and Grassroots.org. The company features domain names such as Angola.com, Cameroon.com, Fleece.com, Dusseldorf.com, Females.com, and many other great names. In addition, there are thousands of less expensive keyword domain names costing $500 or less.

SimpleDomains.com – This domain aftermarket was founded by the founders of several websites and businesses on domain names that include Beer.com, Diamond.com, CreditCards.com, Shop.com, and Luggage.com. The company features domain names such as BusinessTravelers.com, TableWines.com, ForeignAuto.com, and GreenInvestments.com. There are also a variety of other domain names in several categories at pretty good prices.

OneOfAKind.com – This website was started by members of the Domain Consultant team, who have over $15 million in domain purchases and sales to date. Some of the site’s showcase domain names include Ring.com, HappyBirthday.com, LifeVests.com and DiamondRings.com. There is a wide variety of names for sale on the site, although most are listed as “make offer” rather than having a sales price.

BestDomainsWebsite.com – This website was started by one of the co-founders of the Targeted Traffic conference, Howard Neu. In addition to regularly priced domain names, they have a list of specials that include TeleconferencePhones.com, FrankensteinMasks.com, and AnimalRightsAdvocates.com.

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