Think About Your Prospective Buyer

I come across good domain names that are available for sale all the time. Some are private inquiries, some are via email sent from my corporate website, and the majority are at auction. When evaluating domain names, I think it is of utmost importance to think about who will be buying the domain name and then determining if there is enough of a margin to sell the domain name profitably.

One mistake I make on occasion is buying a domain name that looks very good on the outside but has limited profit potential when reselling. There are a number of professions that don’t seem to value domain names as much as others. A domain name may be an awesome exact match domain name for a specific field, but if people in the field aren’t big domain name users or a web presence isn’t all that important, the domain name may have less commercial value.

In highly competitive fields, an awesome domain name can bring more business. That business may be worth a huge amount of money and perhaps many times more than an expensive domain name. In other fields, leads aren’t all that expensive or having a web presence isn’t critical, and that means people will generally pay less for domain names.

I have made the mistake of buying great looking domain names that have more limited appeal. This is a mistake that can be avoided. Some tips to knowing if a specific field may not be able to support the price you would need to achieve:

• Other awesome domain names are owned by investors and for sale at low prices
• Businesses in that field have longtail or below average domain names
• There aren’t many Adword advertisers for that field

I have owned many domain names that fail to receive offers at the price level I think they are worth as well as domain names that don’t receive offers. It’s  probably obvious, but sometimes great looking domain names aren’t sold simply because the businesses and people in that field don’t feel the need to spend money on an aftermarket purchase.