Because of the niche nature of the domain investing business, I am regularly asked by friends of friends for advice about buying domain names. I don’t do any domain consulting, but I will try to give some advice if I think I might be able to make the acquisition process a bit easier for them. Buying registered domain names is not always easy, and it’s nice to be able to help someone if I can.
Friends of friends usually find me after they’ve made an effort to buy a domain name but failed. Sometimes this happens when they can’t get in touch with the domain registrant and other times it happens when they could not close a deal. Either way, the acquisitions I am called in to help on aren’t usually as simple as buying a domain name via GoDaddy or Sedo.
The toughest types of domain names to acquire – not counting those that are being used – are the “meh” quality domain names someone really wants to buy. By “meh” quality, I mean the type of domain name a domain investor would hardly consider buying. They seem to have very little worth to a domain investor. If you saw this kind of domain name on a list, you would probably either pass right over it or take a flyer on it with a minimum bid.
A domain name may have little obvious value, but to someone who owns it, there could be intrinsic value. They bought this domain name for a specific reason, and they don’t really have a desire to sell it. From a valuation perspective, the domain name is worth very little. To someone who has owned a domain name for 10, 20, or even 30 years though, there is value.
In addition to the sentimental reasons, there are also logistical obstacles. Educating someone on how to sell a domain name is not an easy process. If there’s the potential for a windfall, perhaps they will put the time in to learn how to sell a domain name and open the account(s) needed to transact.
Selling a domain name can be easy, but it can also be a pain in the ass. A seller using an escrow service might need to be KYC’d. There could be a purchase agreement to review. They might need to sign up for a platform to list their domain name for sale. It can take a bit of effort and some industry knowledge to sell a domain name. An unmotivated domain registrant probably won’t put the time and effort into the process to sell their domain name for a couple grand.
On the other hand, it’s tough to advise a friend of a friend to offer $5,000 – $20,000 to motivate the registrant of a “meh” domain name to sell. $5k is real money, and they would be vastly overpaying for a “meh” asset to get a deal done. Sometimes it takes an offer that is beyond what a domain name could ever be worth to get a deal done. It’s tough to advise someone to overpay to secure a domain name.
