Uncategorized

Tax time is coming! The Domain Tax Guide is a good resource for people who need some tax advice related to domain investments. I bought a guide and sent it to my accountant since he hadn’t worked with a company like mine before. This helped him determine my taxes and learn about how to treat domain sales, domain acquisitions, inventory, and other aspects of domain investing.

Order the Domain Tax Guide Now!

I don’t spend a lot of time reading other domain blogs, but when I do, I generally use Domaining.com because I’ve pre-filtered my preferred feeds already and blocked the websites I don’t read. Instead of having to read through all of the domain-related headlines, I can easily find the most interesting articles from the domain investors I trust and respect, since just about everyone else is blocked.

A couple people have asked about blocking/adding feeds and it’s simple to do. Just sign up for an account and visit the edit feeds page. You can check off the websites that you want to see and the others will be blocked. Now you don’t have to read through all the headlines to find the ones that are of the greatest interest to you. In addition, you can also add non-domain feeds. I’ve added a few like TechCrunch.

Also, I know that some people don’t want to get an email every morning, so you can easily opt out. I actually like the email newsletter because I can see the previous day’s popular headlines that I may not have read.

With so many projects going on, it’s good to be able to cut through the BS and get the news I need when I want it.

I took a gamble on a pair of newly registered domain names today. I was watching the news and heard a report about a drop-side crib recall happening for 2.1 million Stork Craft cribs. I remember writing an article about the lawyer who registered ChineseDrywall.com, and the website now ranks very highly on Google for the exact term, and it even has sitelinks, making it more likely that searchers will click.

Instead of focusing on trademark type names like StorkCraftLawsuit.com, StorkCraftRecall.com and other names that could pose potential legal trouble, I opted to register a couple of generic domain names. While there hasn’t been much search volume for “drop side cribs,” I am sure that will change with the recall.

In light of this, I registered DropSideCribs.com and DropSideCrib.com. I don’t know if a law firm will want the names, but I think they could rank very well for this phrase, which will be highly searched in the coming days.

I feel like I’ve probably told the story a bunch of times (which I am sure I have), but since a number of people have asked me recently, I want to share the story of how I became a domain investor.

When I was a NYU in 2002-03, I went to help a family friend clean the movie ride curtains at the Empire State Building since I lived less than a block away. For two days, we talked about how expensive the City was – especially for a grad student. My Dad’s friend recommended that I find some sort of product to sell and that I should sell it easily on Ebay. I looked around for a number of things – custom pencils (no margin), art (did some buying and selling) and finally I saw people selling domain names.

I would see names selling for a few hundred dollars, and when I went to Network Solutions, I saw that similar names were available for just $35.00. I bought my first name, and for the life of me I can’t remember what it was. I think it was a legal name with a hyphen. I remember I sold it after two auctions and broke even. Shortly thereafter, I learned about Godaddy’s less expensive registrations, and I began buying and selling newly registered domain names for 200-300%+ profit. It wasn’t a whole lot of money, but I continued to do it and reinvest all of my profits.

As the number of my customers grew, I began selling domain names in private and in bulk. Instead of selling 1 name for $30, I would sell 20 of them for $18/each. My profit margins were smaller, but my profits grew. With all of this, I continued to reinvest in my business, buying more newly registered domain names. I went to work at a Direct Marketing Agency in 2003 and continued to buy and sell domain names on the side, although there were times when I stopped doing it to focus on other things.

I later began to realize the value of keyword domain names, which was taught to me by Tasha Kidd, who also told me about domain parking. I had been looking at domain names as virtual pieces of land, but hadn’t really even considered monetization. Prior to this, I had focused primarily on “brandable” domain names, with some of my new registrations including BusinessMotels.com, GasolineExperts.com, and many more.

Sometime in early 2006, one of my clients recommended that I join DNForum. Up until that time I didn’t even realize there was an actual domain industry. Ironically, he told me that once I joined the forum, I probably wouldn’t sell him any more domain names cheaply. For some time, I continued to buy newly registered domain names, while selling them as quickly as possible… churning and burning through them.

It was on DNForum that I got my first big break. I saw a listing for the domain names Mortgaged.net, Mortgaged.org, Mortgaged.info, and Mortgaged.biz, and I bought it for what I believe is a few hundred dollars. I then did some research and found that Mortgaged.com was for sale for 4 figures from someone else, and I bought it – the purchase was my highest priced domain acquisition, and for the couple of days around then, I was nervous as hell. I hadn’t paid more than a few hundred dollars for a domain name ever. With some good luck, I was then able to flip the entire package for a profit, earning me more than I had made on any single deal before.

I continued to reinvest all of my profits as I started a new job as a Marketing Manager at AIG. I worked all day and came home to do more work in the evening – looking to make deals the entire time. One day in September of 2006, I bought TelephoneCall.com for $x,xxx, and a few weeks later, I flipped it for $20,000 at the TRAFFIC auction. I used the proceeds from that investment to acquire other domain names of higher value, and I continued to buy and sell – keeping taxes in mind (which is VERY important).

In October of 2007, I was able to leave my full time job at AIG and focus on growing my domain business. I literally started with a $35 domain investment in 2003, had zero technical or Internet background, and I have become a full time domain investor and developer. Fortunately, I learned about development, because I am able to do things I never thought I could do – such as changes to the blog, website development edits, and other very small coding projects.

While I do think times are arguably tougher than they’ve been anytime since the .com bubble, I still think there’s plenty of opportunity. I continue to earn a living buying great names at great prices and selling them at fair prices. I generate (growing) revenue from my developed websites, but I still primarily earn a living as a domain investor.

One of the reasons I happily blog every day is that over the last few years I’ve been lucky enough to receive advice from a wide range of domain investors, developers, designers, SEOs, venture capitalists, advertising executives…etc, and I am passionate about giving back. If it wasn’t for the advice of others, I wouldn’t be in the position I am in today, and I hope I can be helpful to those who can use it.

Just because you don’t have a huge bankroll and just because you didn’t start in 1996 is not a good reason for why you can’t be a successful domain investor today.

If you’re like me, at some point you’ve been paralyzed in making a business decision about development because you don’t know any developers or designers. When I wanted to develop my first website with a friend, we posted a wanted ad on Craigslist, only to be inundated with responses from all over the world. How the hell were we suppose to find a developer when there were 200 responses, with basically the same content but prices varying from a couple hundred dollars to ten thousand dollars?

Although web templates at design sites such as ThemeForest.net are great for people who have some development knowledge, they’re still a foreign language to people who don’t have this background (like me a couple of years ago). In the past couple of years, I’ve found two great places to find developers. Forget about posting help wanted listing in domain forums, which you probably do just because you don’t know where else to turn.

I found my first designer Mike (Six One Five Design) after holding a contest at Sitepoint, which is now called 99Designs.com. You can basically create your design brief and set a price for your work, and assuming your offer is reasonable, you will receive submissions from which to choose. Your design brief does not have to be technical. Write down your ideas, mention other sites or features you like, and be as specific as possible.

99 Designs is especially good to find logo designers. Instead of paying a single logo firm $2-300 for 4-8 designs from 2-8 designers, you can allocate $300 for your project, and you’ll get dozens of designs (or more) from hungry designers. As people submit their designs, you can eliminate those that don’t work for you, giving contestants more of an idea about what you want. You can also browse around other contests and ask designers you like to compete in yours. This is a great way to find a designer.

If you have a project that requires programming knowledge, eLance.com is another great site to find a developer. You can search for a developer based on level of expertise, and some have even taken exams given by eLance. They have a ratings scale, where past clients have given ratings, and they also have an earnings scale as well as the number of repeat customers. This is great because trust is such an important factor when developing. eLance also handles escrow to further protect you (although downpayments may be required upfront).

eLance also allows you to create a brief and invite companies to participate. Give explicit instructions about the work you’d like to have done, and search for potential companies with which you’d like to work. At the end, you can choose a winner after communicating with the different providers.

One downside that I have found to development is that it seems to be much cheaper to work with a company located outside of the US. As a result, language barriers do exist, and communication can at times be a bit difficult. However, with all things considered, you can find a great designer and/or programmer to help develop your domain names.

Please remember these two pieces of advice that I have learned:

1. Most successful developed websites owned by domain investors require work. You can’t generally build it and make money without work (PalmSprings.com and Bobbleheads.com are two examples)
2. It might behoove you to work with a programmer and designer that work well together. While their work is akin to someone working on a car’s engine and someone else working on the paint and interior, both need to work together smoothly, otherwise you can waste time and money.