Anyone can go out and buy a domain name or buy a portfolio of domain names. Without some basic knowledge though, it’s unlikely that a person will be successful investing in domain names. I want to share some advice on what I think you need to be knowledgable about before investing in domain names in order to make money.
Trademark / intellectual property law – You don’t need to be a lawyer, but you should know what would constitute a trademark infringing domain name and what is generally safe to own. You should also know how to use a domain name without infringing on someone else’s rights. Not knowing this can cause an expensive mistake.
Negotiations – If you want to get the most for your domain name(s) or you want to buy a domain name for a good price, you need to be able to negotiate. Whether it’s on the phone or via email, having the ability to negotiate is critical.
Domain market – It’s obvious that a domain investor needs to know how to value domain names in order to set purchase and sale prices. Getting this knowledge takes time and quite a bit of market research.
Sales and Marketing – If you are going to reach out to end user buyers, you’ll need to know good sales techniques. My personal opinion is that a great domain name doesn’t need much of a sales pitch if you put the offer in front of the right person, but a marginal to good domain name might need a bit of a sales pitch.
Market Research – Negotiations are important to get an optimal price, but you’ll need to know how to get in touch with the right person at the prospective company.
CAN-SPAM Act – If you are going to be emailing US buyers, you need to know some of the important aspects of this law. Violations can be expensive, and pleading ignorance isn’t going to help you out.
Communications – There are a few domain investors with whom I would never do business because I don’t like them. I haven’t met any of these people in person, so it’s all about how they publicly communicate and do business. When it comes to public confrontations, I think it always pays to be “Switzerland.”
Sales and purchase venues – Knowing where to buy and sell domain names is important, and knowing what you can expect at those places is also important. I know if I list a domain name for sale at DNForum, I am likely to sell it for less than if I’d list it at Afternic, targeting end user buyers.
You certainly don’t need to be an expert in all of the topics above, but it would be helpful to have a basic knowledge. Alternatively, you can probably get by if you have a good friend who is an expert in one of those topics and is willing to offer advice to you for free.
What other knowledge do you need to be successful in this business?