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10 Domain Investment Tips for Beginners

Sahar’s post and a thread on Rick Schwartz’ Targeted Traffic Forum got me thinking about what advice I would give to someone looking to enter the domain investment business. Since I have a couple of friends who recently started out in this business as a hobby, I have a few pieces of advice that I shared with them and will publicly share.

1.) NEVER ever register domain names with famous or somewhat famous trademarks (or trademark typos). Either you will get burned or live in fear if you buy them. Not to mention that the money producing ones are registered (mostly by keyword scripts), so it would be a waste. Additionally, stay away from domain names of athletes, celebrities, politicians…etc.

2.) Read as much information about domain names and the industry as possible. It takes a gut feel to be able to do well in this business without spending a fortune on new registrations. You may end up wasting alot of time and money registering domain names that have no meaning or value to anyone but you. I have a list of valuable domain resources in my blogroll, and you can go from there.

3.) Get a feel of what’s selling in DNJournal’s weekly sales list. See previous sales prices on DNSalePrice.com. Check out what’s closing on Sedo and Afternic as it is more likely that a rookie will have access to names that don’t make DNJournal’s sales list. It might be wise to focus on a particular niche at first (like LLL.com names or financial names for example). Try to find unregistered domain names that are similar to ones that have sold.

4.) Sign up for one of the public domain forums and read as much as you can. I believe DNForum.com offers the widest variety of information, but DomainState.com and NamePros.com are also great.

5.) Always be honest in your business dealings. Although most business is done online in the cyber world, almost everything is traceable. No matter how many online personas you may create, you will be known for what you post and how you post it. If you are dishonest, it will probably haunt you, so don’t start off on the wrong foot. There is no such thing as “easy money.”

6.) Ask some of the more seasoned domain investors for advice. I’ve met many people who have been successful in this business, and most are very willing to give out advice. Alot of people spend hours in front of their computers focusing on various projects, and human interaction is greatly appreciated. Personally, I like speaking about domain names, and it’s great to see new people in this business finding success.

7.) Read the news, popular blogs, trade journals…etc to find and become knowledgeable about current events and new trends.    Buy non-trademarked names related to those trends you spot.    Never try to capitalize on a tragedy or other event no matter how much money you can make in a short period of time, unless you intend to build a “real” memorial site. Think of it this way, would you want a New York Times headline to read: “Cybersquatter John Doe Takes Advantage of Families of XXXXXXXXX Tragedy?”

8.) Don’t spend thousands of dollars on a single name until you have a plan that does not solely rely on ppc monetization.    It is likely that the seller isn’t selling a high earning ppc name for less than market value, so it will be difficult to find a deal.    Also, don’t buy an expensive name until you have the resources already aligned to implement your plan.    As Darren Cleveland mentioned in this post, development is difficult, can be expensive, and can be time consuming.    Unless you need to act immediately, hold off on buying high value names.

9.) Do your due diligence when buying a name in the aftermarket.    As I said in this post, you should do a Whois history check, call previous owners and search the forums/boards for any issues.    If you buy a stolen domain you may lose your money and the domain name.    Aftermarket sites like Sedo are not immune from domain thieves.    You should also use an escrow service like Moniker or Escrow.com for higher value transactions.

10.). Keep good records of your domain portfolio, sales, expenses and contacts.    Use the contacts as leads for other domain names or even for open discussion.    Track your domain names as you would track stocks in your investment portfolio.    Always be honest on your taxes because the penalties could be much more than what you would gain.

Domain investing is a great hobby or profession for many people. I believe it is still the “wild west,” and as such, special precautions need to be taken when going into this business. If something seems too good to be true, it really probably is. Trust your gut, and if you need help, feel free to ask.

Tool to View Unreleased Information

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It may be possible to see what projects a company has planned by using the Reverse IP tool, found at DomainTools. In case you weren’t aware, you can see what domain names reside on different servers by using this tool. By seeing the domain names registered by a particular company, you may be able to learn unreleased information about what projects (or type of projects) the registrant has in the works.

Unfortunately, this tool isn’t free, but is a part of your Domaintools membership, which I highly recommend. Other member tools such as the Whois History check are invaluable and can help determine a domain’s provenance when considering a purchase.

As reported on WebProNews.com this morning via another post on ResourceShelf.com, Google registered CouponGoogle.com on 9/13, and it is pointed to Google nameservers. It would only be speculation to predict what Google intends to do with the domain name, but speculation is half of the fun!

Dumber.com – On Snapnames 9/17

I have put Dumber.com up for auction on Snapnames on Monday, September 17th. The reserve price is only set at $499, so this is a great opportunity to buy a great domain name at a bargain basement price. Back in 2005, the name was appraised by Sedo at a minimum of $10,000 to a maximum value of $30,000.

Place your bids tonight!

CarryOn.com: Protecting Children Online

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Carry On the Domain Charity

Thanks to Jay Westerdahl for bringing this to my attention.    The brainchild of Anthony Peppler and Sania Faucher, CarryOn.com is a 501c3 non-profit charity that allows domain owners to donate their adult domain names in lieu of monetizing them, letting them drop, expire or cancelling them.

Owners of domain names are occasionally in a bad position when they want to cleanse their portfolios of “dirty” names.    With domain tasting being so popular, pretty much any dropped/cancelled/expired domain name is picked up by someone and monetized.    Since domain owners are indefinitely listed on the virtual ownership paperwork, they are forever linked to every domain name they’ve owned.    CarryOn.com allows domain owners to donate their domain names without having to worry about them falling into the wrong hands.    Domain owners may also be eligible for a tax deduction.

This type of service could also be beneficial to owners of domain names with trademarks in them.    However, I believe this would be too risky for any charity, as the charity could become liable should the trademark owner seek financial compensation under the ACPA.    Additionally, the former domain owner would technically remain liable for owning it at one time.

Email Marketing Tips – Do’s and Don’ts

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Email can be one of the most (cost) effective ways to reach your prospects or customers. Over the past few years, I’ve learned a few things about email marketing that I’d like to share. Of course there are many other email marketing strategies and tips, but I believe these are some of the most important. Feel free to add to this list in the comment section.

Important Things to Do in your Email:

1.) Identify Yourself – With email-based fraud and scams at an all-time high, it is essential that you identify who you are to give comfort to your target prospects. Use the subject line and the email headers to say exactly who you are. Include a link to your website, and allow your prospect to follow that link and read the email on your website. Once the customer sees that the email is actually from you and your company, they will have more comfort.

2.) Use a Strong Call to Action – I’ve found that if a person doesn’t respond to an email within a couple days after sending it, they won’t respond at all (unless they happen to be on vacation). Within a couple of days or even hours, your email will move to the bottom of your prospect’s inbox, and eventually it will move out of sight. Once that happens, the chance of getting a response is slim.

3.) Make your Offer in the Subject – Since it’s very easy to delete an email or send it to the spam folder, let the customer know the purpose of the email in your subject. If you are trying to buy a domain name, perhaps your subject should be “Offer for XXXXXXX.com.” The owner is more apt to open your email if the subject is of interest. One caution is that spam filters are very strong these days, and a subject that appears to be spam may be automatically filtered. If you are selling cheap erection pills, email may not be the way to go!

4.) Provide a way to Opt Out – While you might not want to lose the ability to send future emails to prospects, it would be even worse to send an email to an annoyed customer. It’s also against the law to not include an opt-out option in commercial emails. Do yourself a favor and make this opt-out option easy to use for your prospects.

5.) Let the Prospect know how you Found his Email Address – People tend to be suspicious of random emails. If you found the email address using a Whois search, let the prospect know this. If you have an existing business relationship, you should remind the prospect of when you did business if possible, or at the very least, give information about your company in the email as a reminder.

6.) Keep your Email Short – Keep your email concise and succinct. Provide links to your website that will allow the prospect to fully examine what you are offering.

7.) Offer a Text Version of Email – Allow your prospects to read your email in HTML or text to make it as easy as possible for them. Some people prefer to read text based emails rather than emails with graphics in them. This is especially important because of the proliferation of Blackberries and Treos. It’s a pain to read a graphic based email on some mobile devices.

8.) Include Prospect’s Name in Email – Most banks and other financial institutions already include the prospect’s name in the email, but you should, too if possible. This will immediately let the prospect know that there is some sort of relationship, whether it’s between your company and the prospect or a related company and the prospect. (Only do this if you are sure the names and email addresses are correctly matched!)

9.) Read the CAN-SPAM Act Before Emailing – This is the most important suggestion. If you want to avoid any potential penalties, you MUST read the US Government’s CAN-SPAM Act. Violators of this Act can be fined up to $11,000 PER SPAM EMAIL!!

Important Things to Avoid in your Email:

1.) Don’t Send too many Emails – Even though email is free for all intents and purposes, don’t send more emails than necessary. While you may find your emails informative, your customers may find too many emails to be a nuisance. Also, every time you email your prospects, you give them the opportunity to opt out, which they will do if you annoy them. Avoid this by only sending important emails.

2.) Don’t Send Emails with Poor Grammar or Spelling Errors – When I receive an email riddled with spelling mistakes and/or poor grammar, I immediately think that it’s a spam message from a foreign country. Always use spell checker software, and if you can afford it, have a professional proofreader examine it. If you can’t afford the proofreader, have a friend or colleague review your email before sending it out.

3.) Don’t Email People who Opt Out – Never send an email to a prospect that previously opted out of receiving your email solicitations. Keep a file of email addresses that have opted out, and always purge those emails from your new prospect list to avoid re-emailing that prospect.

Here are some good resources on Email Marketing:
Dos and Don’ts of E-Mail Marketing
E-Mail Sender Lines: Do’s and Don’ts
Email Marketing Tips, Tricks and Secrets
Avoiding the Spam Filters and Other Email Marketing Tips

Domain Blogs I Read Daily

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Someone recently asked me which domain blogs I read on a daily basis, and I listed them below:

Frank Schilling’s Seven Mile Blog

Owen Frager’s The Frager Factor

Sahar Sarid’s The Conceputalist

Jay Westerdahl’s DomainTools Blog

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