There are pros and cons to using an escrow service. In most cases the pros far outweigh the cons as escrow services add a huge amount of safety to buying and selling domain names. That being said, one of the downsides to some escrow services is that they charge the escrow fee upfront. While this is great for the escrow service themselves, this might not be ideal for you as either the buyer or seller of a digital asset like a domain name.

Here’s a good example of a situation where this can come back to bite you. Let’s suppose you work out a deal with someone who wants to buy your domain but can’t afford to pay all at once. So you split the transaction into monthly payments over a one year time period. Now, what happens if the buyer defaults on the payments, of course you still have the domain name but what about the escrow fees you paid along the way?

I did a bit of research and found that a lot of escrow providers ask for escrow fee upfront, which limits their risk, but not yours. After doing more digging I found that Payoneer has a different way of doing things which distributes escrow fees throughout the life of the transaction – the result is that nobody gets stuck paying the full escrow fee upfront if the transaction never ends up going through.

Next time you’re either buying or selling a domain name, of course use an escrow service, but when you do, check to see if they ask for the full set of escrow fees upfront. If so, you might want to find one that doesn’t because as we all know, not all transactions go as planned, and when they don’t, nothing stings more than lost money.

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I was bidding on some domains tonight on Park.io when I noticed that someone is dropping a ton of 3N .IO domain names. Like the title of this post said, I’m not surprised. I too tested the 3L .IO and 3N .IO path and found it to be a scary and desolate place, just you and your domains, and nobody who wants to buy them.

It’s clear that someone else also tested the waters and likely found similar results given that they’re dropping all of them. It looks like they only held them for a year so they’re not out too much money but I’m sure there’s still a sting since .IO names come with a relatively heft reg fee.

expiring-io-domains

I also see this as a good example of how easy it can be to trick yourself into thinking you have something valuable, when in reality you have, as Rick Schwartz would say – pigeon shit (pardon my French). It can be easy to see 3L and 3N .COMs selling for big bucks and thinking, well if I sell the .IO for a tenth of what the .COM sells for I’ll make a fortune.

The problem is, nobody wants to buy your 3L .IO or 3N .IO domain, not for a tenth of the .COM price, not for a hundredth, there just isn’t the demand.  Here’s my question, what extensions besides .COM and .NET do you think are a good bet for 3L and 3N domains? I’d say there aren’t many, but there are more than two, but I can tell you that the third isn’t .IO.

What do you think? Comment and let your voice be heard!

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For Sale Landing Page

I’ll start by saying, I don’t agree. Yes, I’ll go on record saying it, I think you are absolutely missing out on potential buyers and decreasing your chances of selling a domain if you choose not to put up a landing page that makes it clear that your domain name is for sale.

So why am I talking about this now? I was inspired to write this post after seeing a comment from a reader on Domain Name Wire in an article Andrew wrote asking domain investors to share their favorite “For Sale” landing page option. The first comment on the post was:

Domain Name Wire

Much as I would LIKE to put a “This Domain is For Sale” it then means that you are laying yourself open to that being included in a UDRP, even if the UDRP is not deserved . Plus of course, as I believe one of the “top” domainer’s said, he always works the other way around and tries to put them off buying. . The ONLY Buyers you REALLY want are those who really NEED / WANT your domain as they are the ones who will pay the big money ,not the well if its cheap i’ll buy it ones. (Source – DNW.com)

The idea of “trying to put them off buying” or tried to get someone not to buy your domain name is great, like the comment says, you only want to sell domains to people who will pay the big money. If you’re already a millionaire and never have to work again, great, wait for the big money…but for the rest of us, if we can sell a domain for 10x what we paid for it, and that means selling a domain name for $120, yeah – that’s still a good move in my book.

Andrew wrote a post the day after the article I quoted above and did a great job of articulating why this idea of “turning off buyers” works only if you’re in a very specific financial situation:

I bring this up because I sometimes hear people say “Play hard to get” with domain buyers. String them along. If they really want the domain they will find a way to reach out to you and make it known.

This strategy makes a lot of sense for Rick. He’s not going to have to skip dinner if he doesn’t make that $250,000 domain sale.

When you have money you can pass on deals that other people would accept. It puts you in a great negotiating position. Your BATNA (Best Alternative To a Negotiated Agreement) is to just skip the deal and move on. (Source – DNW.com)

I agree with this sentiment and think it’s so important for investors to be honest with themselves, and aligned with realistic expectations. Also it’s important to note that people like Rick probably (okay they definitely do) have much better domains than you, which also means taking a different approach.

One of the arguments I’ve heard in the past about “For Sale” landing pages is that they leave you open to a UDRP. I’d say, yes – if you own a TM violation or are squatting on someone’s business name, that could happen, but if you have a solid generic domain name I wouldn’t be too paranoid.

Sometimes we forget how easy it can be to just look at dollar values and not take the time to understand true ROI. If you bought a house and sold it one year later for 5x what you paid, you would be thrilled. So why won’t you sell that domain you paid $500 for last week for $2,500 today?

Now I’m not saying to go auction your domains off to the highest bidder, but I am saying that you should be realistic about the ROI you want to see on your investments. Either way, I think a “For Sale” landing page is one of the best ways to increase the chance that you will sell a domain name. Trying to turn away buyers is the best way to decrease the chance that you will sell a domain name. It really is that simple.

What do you think? Comment and let your voice be heard!

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blog background

So I recently realized that I’ve had the same background rocking on my blog for over two years now, and it’s time for a change. Since I’m not a designer, and I also know I don’t have an amazing design eye, I’m probably not the best person to pick the background.

Which is why I thought – why not ask my reader since you are the ones that have to look at my background the most? I have held off on offering up my background as advertising space because I think that can often distract from the content and I’m sticking with that approach for now.

There are three different types of backgrounds I’ve been thinking of:

  1. Something abstract (like the current background)
  2. A landscape photograph (think something like the background on your Macbook)
  3. A solid color (the least distracting but admittedly boring)

What do you think? Feel free to include a link to any images that you think are a good example of what you’re suggesting. Thanks in advance for sharing!

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I read an interesting article this week on DomainInvesting.com with Elliot’s thought on investing in hundreds of domain names vs. thousands of names. I think most people know Elliot, and know he has some very solid names – he’s focused on quality over quantity.

However that’s just one of two paths, other investors like Mike Mann have large portfolios and make (and report) the huge volume of sales they end up making. It makes sense right? More domains, more sales, but each of these models requires a different strategy and focus.

Right now Elliot’s portfolio has about 500 domains in it but there was a time when he thought about building up a portfolio of 25,000+ names:

“Buying thousands of domain names proved to be much more difficult than the model that has worked well for 10+ years. To alter my strategy, I would need to be somewhat less discriminating about the domain name I purchase. I would need to be more active in auctions and target far more domain names. I found that this was a major challenge as many names I thought I could buy for under $100 were selling for much more at auction. It was taking a great deal of time to find good values. At the rate I was going, bidding on auctions was not going to get me to 25k domain names very quickly and it would be very expensive.” (Elliot Silver)

Like Elliot, I also have a portfolio of around 500 domains, and have thought about what it would be like to have thousands or tens of thousands. I have very similar feelings to Elliot and really just acknowledge that it’s a whole different game.

What do you think? Are you going for a thousand or ten-thousand name portfolio or focusing on a smaller portfolio with bigger names? Do you think one path is better than another?

Comment and let your voice be heard!

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I’m always happy to see when posts from years ago continue to live on and bring active conversation and discussion. Every once and a while I write a post that somehow magically transforms into a discussion board of its own. One particular post that is still going strong I wrote back in 2011 and yesterday it hit 138 comments – it’s about why it’s so hard to make money with directory sites and you can check it out here.

While I wrote the post six years ago I still think it covers a topic that is still very relevant today. I don’t think this is something that is specific to Domainers though and if I were to go back in time and change the title I’d change the title to “Why most people won’t make a dime with directory sites.”

Still, six years later and I see the same being true and actually extending beyond directory sites. The fact is that too many people think that building a website and monetizing one are the same thing. It’s easy to spend a good chunk of change on a great-looking site, the problem is, you haven’t spent a dime sending traffic to it. A great website with no traffic is like an incredible store that would make millions in the middle of Manhattan, and putting it in the middle of the desert.

From directory sites to eCommerce stores, just putting together a website that has the potential to make money isn’t enough to actually make money. Companies spend a lot of money paying people like Google and Facebook to send traffic to their site. It’s not enough to have a budget for your website, you need a budget for getting people to your site and actually performing some action that makes you money.

It’s probably time for me to write an article about why most people that think they’re going to build a money-making website are actually probably going to burn a lot of money building an awesome website that doesn’t make any money. But I’ll have to save that for another day. Thanks to everyone that has been commenting on my post from way back in 2011, always fun to see things like this happen.

Of course, I’d love to hear from you. Do you think what I said back in 2011 still holds true? Comment and let your voice be heard!

 

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It’s funny because sometimes I hear people say things like, “are people still buying and selling domain names?” To which I’d love to respond, “No, that ship has sailed” since that would mean less investors to compete over names with, but I can’t say that, and instead I have to tell the truth, the domain name world is at the top of it’s game, and IMHO it’s only getting hotter.

ali-zandi-225x225-2017-150x150

So it should come as no surprise that Freedom.com just sold for $2M, and the guy who sold it, Ali Zandi, made a name for himself selling domains on Flippa, lives in Hawaii, and has a super-cool beard that I wish I could grow but I know I can’t.

This week Michael Cyger from DomainSherpa.com sat down with Ali to talk about the Freedom.com sale and I think it’s definitely worth a listen. Whether you’re a startup founder or a domain name investor, this is an interview you can’t miss.

You can listen or watch the interview here.

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As the co-founder of a SaaS startup I end up spending quite a bit of time in Excel staring at tab after tab of numbers. Many of these numbers start at the top of the sheet and then after running through a zillion formulas end up populating massive tables full of predictions. Given where we are now, a model based on formulas that take-into account what happened in the past is critical to taking a truly data-driven approach.

But what do you do if you’re just getting started in the SaaS world and there is no past. Plugging in formulas that you know are going to be completely wrong is just going to create a spreadsheet that gets frozen in time and becomes next-to-impossible to update.

We made the mistake early on of trying to built a super complex financial model only to realize that we never updated it and it became more of a snapshot in time rather than a living document. Back then I wish I had read this blog post by Baremetrics with one of the best primers I’ve read on building a financial model that you’ll actually update.

There are plenty of elaborate financial model templates out there, but the ones I’ve seen come with a key problem — it’s a significant undertaking to update them.

In fact, inaccurate financial modeling and the hassle to update that model is what nearly put Baremetrics out of business last year before we worked with them to get a sustainable model in place. (Source – Baremetrics Blog)

Along with walking founders through the process of creating the initial model, the article also shares the Excel template that you can use to get started. So if you’re getting your SaaS company off the ground and trying to put together a realistic financial model, I’d recommend reading this article before you spend a bunch of time and money building a model you’ll never update.

I learned the lesson the hard way, hopefully this blog post saves you some pain 🙂

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Today is an exciting day in the Austin startup world as news has rippled through town about Google’s acquisition of VR game creator Owlchemy Labs. If you don’t know Owlchemy Labs then you honestly have missed out on some of the most superbly amazing VR games like Job Simulator or Jack Lumber.

This acquisition definitely has the gears turning when it comes to Google’s path in the VR world.

It’s difficult to read too much into what this means, and Markovic points out that Google has released products purely for non-Google headsets, like Tilt Brush and Google Earth. But the acquisition does feel like it’s pointing toward something beyond the current version of Daydream. (Source – The Verge)

Huge congrats to the whole Owlchemy Labs team and great to see another win for the Austin VR scene!

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Every quarter Ivan Rasskazov and Giuseppe Graziano put together a report of the liquid domain name market. Note the word liquid which is critical to understand since this report does not cover the entire domain industry but instead focuses on a specific category of domain.

So what is a liquid domain? This report focuses on the following categories of liquid domain names:

  • LL .COMs
  • 3L .COMs
  • 4L .COMs
  • NN .COMs
  • 3N .COMs
  • 4N .COMs
  • 5N .COMs
  • CC .COMs

These categories are considered liquid because investors can look at market values for names in these categories, i.e. someone can look and say, ah a 5N .COM is currently selling for X on average, and find a buyer in and around that price.

Generic words like Cool.com are without a doubt incredibly valuable (and very liquid) domain names, but have much more variability in pricing. Many amazing one and two-word .COMs that have plenty of value aren’t tracked in the same way that domains in the category above are. Liquid domains, as listed above can be tracked just like stocks in a stock market and in China they really are considered a true asset class with values based on the organization of letters and numbers in short .COM domain names.

In the latest report it was interesting to see a small decline in 4L and 5N names (~8%) and a huge drop for Chinese Premium 3L .COMs which lost 50% of their value, yikes! This shows the incredibly variability and unpredictability of the market which is still incredibly nascent and in many ways still being created and defined.

Between countries the US and China are by far the most dominant when it comes to actively buying and selling liquid domains like these. If you want to dive more into the data yourself you can download the report here. Domain Sherpa also has a great interview with the creators of the report which you can watch here.

Now here’s the question. How long are we going to continue to see massive volatility and price swings (like a 50% change) in the liquid domain market until things even out? Or will they always be this erratic? Comment and let your voice be heard!

 

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