I get a lot of emails from blog readers every week and as many of you know, I take the time to respond to every single one of them. Heck, if you’re going to take the time to read what I write, I will take the time to respond to you and help in any way I can. Unfortunately this often leaves me as the bearer of bad news as I have to tell people every week that what they thought was investments, are really just collectables, often valuable only to them.

Now there is nothing wrong with making mistakes, that’s how we all learn, it’s not learning from your mistakes that can be dangerous. Domaining can be an incredible investment opportunity, or a massive waste of money, just like real estate or the stock market, it all depends on what kind of return you are making on your investment, or lack thereof.

So I decided that I would put together a simple quiz that you can take to determine if you are actually making investments, or just building-up a collection of domains that will sit, collecting digital dust, for years to come. After taking the quiz, if you find-out you aren’t really investing, good! Now is the perfect time to make a change and turn things around, identifying bad habits is the first step to creating good ones.

Answer the questions below honestly and at the end I’ll let you know whether you are investing, or just collecting.

1. How much money did you spend on domain names in 2011?
2. How much money did you make from selling domain names in 2011?
3. How much money did you make from monetizing domain names 2011?
4. Did you turn down any offers on domain names you own? If so, what was the total of the offers?

Remember, an investment is something that pays you. Take a look at how much you spent on domain names and compare this to what you made selling and monetizing domain names. If you are spending more money than you are making, you might be tricking yourself into thinking you are investing, when in fact you are collecting.

However, there is a caveat here, if you turned-down offers that could have made the year profitable then you might have some solid investments, and yes, it’s okay to wait to sell these when you’re ready, and for the price you want.

So where do you go from here?

Well, if you are an investor, pat yourself on the back! This is a very challenging industry and if you’re making real investments, you should be proud!

If it turns-out that you’re a collector, don’t panic! Take this post as your wake-up call. Stop buying domain names that you can’t sell and don’t make you money. Look at how much money you spent on domain names last year and look at how you could have spent that money better, most likely on fewer domains. There are lots of incredible resources out there to learn more about how to make good investments.

Want to make money selling domains? Make sure to watch my interview with Toby Clements and he’ll help point you in the right direction.

Want to make money developing and monetizing domains? Make sure to read my article on Domain Development 101.

(Photo Credit)

As you all probably know, Braden is a good friend of mine and one of my main mentors in the Domaining and business world. Braden was the driving force that caused me to go .COM in 2011 and he always gives me great advice…now I just need to get a bit better at following it!

It was recently announced that Braden made an investment in ScienceFiction.com and I thought it would be a good idea to pick his brain and find-out a bit more about why he invested and what’s ahead for 2012.

What made you decide to invest in ScienceFiction.com?
Science Fiction has always had a loyal fan base. Add to that a continuous roster of scifi/horror/comic book related movies and you have the recipe to tap into some large ad budgets.

Patrick and Ze work tirelessly on this site and have done an awesome job. When Patrick approached me with the idea, it just felt like a good fit.

What role do you plan on playing within the company?
Other than annoying Patrick with an endless stream of crazy ideas? My plan is to stay out of his way ☺

Can you share any ideas you have for taking the site to the next level in 2012?
Once we get the traffic solidly over 500k monthly visitors, we can reach out to the large advertisers. There are some ideas that we’ve discussed related to co-op memorabilia auctions and other product sales but nothing has been inked yet.

How do the skills you’ve developed in your own business translate to this project?
I’ve helped acquire a small domain portfolio to support the site and various (future) initiatives. My office can help with content writing, linking, SEO, design, etc. My sales dept may be involved in sales as well. We’ll see how everything unfolds going forward.

What is the biggest challenge you see ahead for 2012?
Fighting the Google Monster!

(Photo Credit – Ron Jackson, DNJournal)

Toby Clements is one those people that just has a natural gut instinct for domain names. He can look at a list of domains and quickly identify which ones could sell, and which may be sitting in their owners portfolio collecting dust.

One of the top questions I get from blog readers is, “What kind of domains should I be buying this year?” It’s a great question, and there is nobody better to answer it than Toby! So I was able to spend a few minutes with Toby last week, picking his brain and getting an understanding of where he sees liquidity for Domainers in 2012. This really is a must-watch interview, so stop reading this and click the play button below!

Let me begin this post by saying I am by no means the end-user sales messiah. Please don’t take this post as an expert telling you what has helped them make their fortune. I have not ever made a fortune selling domain names, instead my business has always generated revenue through development and monetization.

That being said, last year was my best year of end-user sales with over ten domains sold to end-users at an average price of $2,500 each. Compare this to 2010 where I did about half the revenue and I am happy with the direction I am headed. I can’t tell you how to make millions buying and selling domains, but I can tell you what worked for me last year when it came to end-user sales letters.

I did a lot of fine-tuning last year to really figure-out how to optimize my sales letters. What I found was a higher response rate than ever before and a higher average sale price, but it wasn’t just the sales letter, it was the full package, and that’s what I’m going to talk about here. So if your end-user sales letters aren’t working, one of the reasons below might be why:

1. You Are Trying To Sell Crappy Domains – many people blame the sales letter when at the end of the day it is the product that the sales letter is trying to sell, not the letter itself. End-users will only respond if the domain name you are emailing about catches their eye right-away. This means it should be a .COM, it should be short, and it should be something incredibly relevant to their business. If you’re trying to sell three-word .NETs or what you think is a category-killer .BIZ name to an end-user there’s a good chance they aren’t going to respond. To end-users .COM really is all that exists so if you want to catch their attention, you’ll need to do it with a .COM.

2. Your Sales Letter Is Too Long – what do you do when you get a really long email from someone that you don’t know at all? Most people hit the delete button. If your sales letter is too long it could seem scammy or just too much for a busy person to digest and make a real decision. The sales letters that did the best for me in 2011 were those that were short and sweet, focusing on the one main value proposition I was going for. If you start listing the reasons why owning a strong domain name like yours is good, you’ve probably already lost them. Show the potential buyer how a domain name like yours could solve one of their biggest problems, and stop there – that’s enough!

3. Your Prices Are Too High – last but certainly not least is pricing. While end-user pricing will certainly be higher than any of your fellow Domaining buddies might pay, it takes doing some research and understanding your market to determine the right price. Try to understand how much money your potential buyer is spending on online marketing each month and use this as a guide. Don’t try to sell a domain for $20,000 to a guy that only spends $200/month on advertising. If you want top-dollar for your domain then you’ll have to wait for someone to contact you, otherwise, as long as you’re the guy sending-out sales letters, be prepared to sell at a price that doesn’t scare-away your potential buyers.

The third point here is a good one and delves into a topic that hasn’t been covered much – the difference between an inbound vs. an outbound end-user sale. While I could write a whole post on this (and I will!) it is important to understand the key differences here.

Just think it about it; if someone contacts you to buy your domain you have all the leverage. They might not even know if you had it for sale and you can really set your prices high because you have something they want, and they already know it. When you contact someone else, they instantly see you as a salesperson, someone trying to get them to buy something. In this case you don’t necessarily have anything they want, instead you have to prove that you have something that would be valuable to them.

As you can see, there’s a big difference between inbound and outbound end-user sales and it is critical to be honest with yourself when you’re sending sales letters. If you have reasonable domains, write a short and effective sales letter, and get your pricing right, then you might find more liquidity than ever before.

If you find that you’re not getting any responses to your sales letters, don’t just keep doing the same things, identify the problem, fix it, and try again. That’s what I did and after sending sales letter trying to push .US domains for years I realized that it wasn’t my sales letters that were failing, it was the domains I was trying to sell and the prices I was trying to sell them for.

Don’t be afraid to try new things and fail, heck, fail big, as long as you learn from that failure, make a change, and continue to optimize until you do it right. Nobody said Domaining was easy but there really is nothing like the thrill of a good end-user sale, or two, or three, you get the picture!

Please feel free to share your own end-user sales letter tips below. Like I said above, I’m not an expert, but I do like sharing what’s worked for me so I’d love to hear what’s worked for you!

Welcome to my latest list of hand-picked Domain Development Drops for the coming weeks. I really like sharing domains that I think could become real long-term assets generate passive monthly income. If you haven’t read my criteria for picking names that are good candidates for development, please read below, otherwise you can skip to the drops!

• I like names with medium search volume, a good CPC, and in a market where there are half a dozen affiliate programs I can think of using right-away.
• If you want to get down to the numbers themselves I typically look for keywords with no less than 1,000 exact-match global searches and less than 10,000. Why limit it to 10,000? Typically terms with this much volume are a lot more work to rank well for so I go for the low hanging fruit in most cases.
• A good CPC to me really means anything above $0.50. I just want to see that advertisers see some kind of monetary value in people who search for this term.
• There is no one set of qualities for the perfect domain for development. Also I don’t follow the rules above every time I buy an expired domain and you shouldn’t either. Sometimes I do buy names with a very high search volume in the hundreds of thousands and with a CPC of only $0.23. That being said, a vast majority of the expired domains that I buy for development do meet the criteria I outlined above.

Bam! Now you know what I’m generally looking for in an expired domain name. If you want to know what I do once I buy a domain for development make sure to read – Domain Development 101. If you’re so darn excited after reading that article that you want to dive right in and build your first site, make sure to read – WordPress 101.

ExoticBirds.com – with 5,400 exact-match global monthly searches and a CPC of $0.81 this won’t be the domain that makes you rich, but it could be a nice steady moneymaker in the $50-$100/month range. It is also a domain that could be of interest to an end-user later down the road so there is some reasonable resale potential if you can get it for a good price.

MedicalLawsuits.com – here’s one that might not show up on your radar due to its low search volume. Even though this keyword phrase only has 590 exact-match global monthly searches, the CPC of $13.39 makes it interesting. Getting on the first page of Google for this term would also be a great way to sell it to one of the many people paying to advertise for this exact term.

SingaporeJobs.com – 33,100 monthly exact-mtach global searches and a CPC of $1.21 make this a great candidate for development. There are some great PHP scripts that can be easily installed to build a simple job board or you can plug-into something bigger like Monster.com. If you’re more interested in selling the name, find-out who the top recruiters are in Singapore, you never know who might be interested. As with any of the names I recommend for development, don’t expect these to be great flips, I am recommending these names for long-term development investments.

TaxLoans.net – I like tax sites, of course they are seasonal so expect to make most of your money Jan – May with March and April being the top months. With 1,000 exact-match searches and a CPC of $3.78 this won’t be a big money-maker, but could be a nice consistent earner to add to your portfolio…and maybe even help pay your taxes each year!

DentalEquipment.org – 4,400 monthly exact-match global searches and a CPC of $2.67 make this a solid development candidate. This could start as an AdSense site and then evolve to include affiliate ads or even lead generation as traffic grows.

BuyTermLifeInsurance.org – 720 monthly exact-match global searches is below my typical threshold, but with a CPC of $29.45, there’s money in this name. Insurance is a very hot and lucrative niche online, it’s also very very competitive. This is a name that could take years to build-up, but if you can get on page one for this term, you will make real money. Of course you’ll also have to focus on ranking for related terms so you can get at least a few thousand visitors a month.

That’s it for this week! I hope you all find these useful, it takes quite a while to sort through all the expiring names and pick-out some of the development candidates I’ve outlined here. It is so important to be very critical of every name you look at, buying the wrong domain could mean developing in a niche that you either won’t make money in, or won’t get enough traffic to make money with.

Take your time, develop the right names, and don’t expect to get rich overnight. Development and monetization takes time, it’s nothing like flipping domains so making a quick buck is probably not going to happen. Over time though, you can build-up an army of income-producing assets that have real liquidity.

You can develop domains yourself using a solution like WordPress, or use one of the top platforms for domain development like Epik and Protrada. Remember though, building the site is only the first step, it takes adding content on a regular basis and building strong backlinks to get meaningful traffic.

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New To Domaining? Read my book and learn the basics so you can make sure you are really investing and not just collecting.

2011 was plagued with some fairly disappointing auctions so I was pretty excited to see how we kicked-off 2012. There were some absolutely phenomenal names in the auction but as we’ve seen in the past, the key is pricing. Also, plenty of the highest-value sales happen after the auction so it will be interesting to see what moves over the coming weeks.

DNN did a great job as usual of live blogging the auction so you can see all the results of the auction on there. I’ll be highlighting some of the top sales and hopefully providing some entertaining pictures so you can feel like you’re getting one step closer to the action!

Empire.com sold for $135,000 after it started with an $100,000 initial bid. In my opinion this is a stellar price for this domain and I’ll definitely be paying attention to what the buyer does with this gem.

iCard.com caused quite a bidding frenzy moving from $5,000 up to its final selling price of $26,000. This is a great name to monopolize on the upcoming trend of processing payments using SmartPhones and I’ll be very interested to see what happens with this name.

Next up was Drill.com which fetched $42,000 but fell below the reserve however given that their reserve was between 25K-50K there’s a good chance this name will sell after the auction.

After Drill.com Democracy.com was able to get up to $125,000 however fell below it’s reserve which is somewhere north of 125K but below 250K. My guess is that this name was priced in the 200-250K range so it may be a stretch here but there’s definitely interest.

QE.com sold for $89,000, a good deal in my opinion for a two-character .COM which I always think of existing only in the six-figure range.

QR.com took the cake selling for $325,000. QR codes are in, but the question is for how long and what could a website on this domain do to make money? While I agree this is a great name, I still can’t quite see how this would be monetized, but like many of the names selling, I’ll be watching!

Okay, that’s all for me folks, time to head home and get ready for the big bash tonight at The House Of Blues! As you know I don’t blog parties so you’ll have to just assume that we’re all having a blast!

Day two of DOMAINfest 2012 started-out with some big news – Snapnames and Moniker are being sold to Key-Systems, the same company that purchased NameDrive. To some this news came as a complete surprise, but to many this was a logical next step as Oversee continues to find their focus.

I personally see this as a very good thing. Oversee is working hard to take tools like DomainSponsor to the next level and with their own brands seeing major traction online there’s a lot of opportunity.

Today saw an active seminar schedule as the morning kicked-off with a session on keyword research followed by advanced PPC techniques. Just like yesterday I was running around from meeting-to-meeting all morning so my first seminar was Tim Ash’s talk on Landing Page Optimization.

One of my favorite speakers that I’ve ever seen at a conference is Tim Ash from SiteTuners. Tim gives high-energy, information-packed seminars that I always leave more excited than ever! So of course I was very happy to see that Tim was speaking at DOMAINfest, and if you’re not here I can at least share some of the great information to inspire all of you! First let’s get two things out of the way:

• Always ask yourself – How can I add value to actual people?
• Important to be able to admit that your baby is ugly, i.e. your website may be ugly, sorry but it’s true!

Problems commonly seen on websites and landing pages:

1. Make your Call-To Action Clear – what do you want the user to do here?
2. Ask for Less Information – don’t ask for too much information right-away.
3. Cut Down Your Text – people don’t read on the web, using less text will increase retention and conversions.
4. Keep Your Promises – if you tell your visitors your are going to do something – do it!
5. Make Your Trust Visible – this is actually very relevant to MorganLinton.com and it is this exact advice I received from Tim Ash that caused me to add the “Featured In” section at the top of my blog!

“The #1 driver of conversion in matching people’s intent.”

How to become a conversion ninja:

• Use CrazyEgg to track in-page analytics, mouse movements, scrolling, etc.
• CrossBrowserTesting.com can help you test different browser configurations
• AttentionWizard – simulated visual attention tool, creates “attention heatmaps” of web pages
• MockFlow – design interactive UI mockups for Desktop Software

I’ve decided to split my review of today into two parts so you all get two more digestible chunks to keep on top of the latest action and excitement here at DOMAINfest! Coming-up very soon is PITCHfest and I can’t wait to share some of the cool companies that come and pitch what could be the next big thing!

Last week I asked all of you to help me pick a logo for a new brand we are launching – TutorialsForGeeks.com. The feedback was phenomenal with 39 comments and lots of great input and ideas. So I’ve taken the feedback that I received, found what seemed to be the most popular recommendations, and went back to my designer (LogoNerds) with a revision request.

Now I have three new concepts based on your feedback, and it’s time to take the next step! Now is where you come-in again! Take a look at the new revisions and let me know if you think any of these are ready for prime-time, or if you think we still need to make some adjustments. I can make more revision requests if it looks like we’re still off the mark a bit so don’t hesitate to rip these apart and suggest what you think would look the best!

Also – a huge congratulations to Melly Walker and William Brister who won free logos last week! I plan on doing this monthly so you can expect to have the chance to win a free logo (or two) once a month.

Now it’s time to be critical, be harsh, and let me know how to make this logo really shine!

Heatmaps are an absolutely critical tool for understanding how users interact with your site. Small changes to a site can make a big difference and heatmaps are one of the tools that can provide useful visual data to understand how effective your design really is. Last week we were analyzing the new design of Kayaking.org that we launched later in 2011 to understand how well it was working. We’ve seen some incredible results from this design but still some areas that definitely need improvement.

So let’s take a look at the heatmap and go through the good, the bad, and the ugly:

(Click image to see full size)

So first, let’s start with what was working. Based on data from the previous version of Kayaking.org we found that the most popular portion of our site was information about choosing a kayak. To maximize our impact based on this information we reached-out to a professional kayaker to put-together a really solid article about choosing a kayak and we put it at the very top of the sidebar. As you can see from the Heatmap it’s definitely getting a lot of attention and it has made a nice impact on the average time a user spends on our site.

Our new booking engine is also seeing some good traction and the heatmap show the attention this gets. Looking at the sidebar and the top navigation you can also see which categories are the most important and we’ve worked hard to get our most popular topics above-the-fold, but we’re always tuning!

Okay, that’s the good, now for the bad. With the relaunch we really wanted to highlight a new central slider that we hoped would feature some of the most popular things visitors were looking for. Unfortunately, looking at the data behind the heatmap, the slider only receives 5% of the clicks. The “How To Choose A Kayak” article is actually getting more than double the slider with 11% of the total clicks. When we see something like this, we tune!

So last week we made several changes to the central slider. A lot of the tuning we do is based on some of the great insight provided in Tim Ash’s book – Landing Page Optimization, as well as some great blogs, and things I’ve learned at conferences like Affiliate Summit. There were a few things wrong with this slider so in tuning we made a few key changes:

1. Add bright, distinct buttons that grab the users attention – before the tiny red button at the top didn’t really capture your eye and it blended in a bit too much with the image. We replaced this button with electric blue buttons accented by a feathered white background so they really pop.
2. Change The Slides Based On Current User Behavior – we know choosing a kayak is big, but we also wanted to add more shopping-related options as this area has been a growing revenue source for our site. One of the most popular products we’ve ever sold through the site is the Go Pro HD Hero 2 which is an awesome waterproof HD cam that is very popular in the kayaking community. Finally, we have over 1,600 fans on Facebook and the interactivity we get is phenomenal, so it felt important to feature this as one of the main slides.
3. Provide Special Offers When Possible – people like deals and exclusive offers, by adding coupon codes and discounts on the slides we are able to give people more of a reason to click and find-out more.

The new slider has been up for about a week and I’m excited to say that this central slider now receives 14.6% of the clicks, almost a 3x increase from before. Of course this process doesn’t end, it continues all year long. The more you can optimize your sites to deliver what your user is looking for, the better brand loyalty you will get, and the more conversions and revenue you will generate. We sold a $219 piece of kayaking gear from the first slide just two days after making the change so along with more interactivity we’re already seeing it generate some money.

In 2012 Kayaking.org hit the first page of Google for the insanely high search-volume term “kayak” which has driven over 1.8 million impressions on Google just this year driving thousands of new visitors to the site to start-out the year. The more visitors, the more data we get and the quicker we can tune the site and optimize the flow. So for any of the Domain Investors out there that have developed their domains and want to take it to the next level, give heapmaps a try, you’ll be surprised what our visitors can teach you about your site!

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Oh and if you want to know what software I use for heatmaps it’s called CrazyEgg and it is easy to setup and very affordable. This isn’t an affiliate link, it’s the software I use myself and highly recommend for anyone that wants to dive-into the world of heatmaps.

Hello everyone and welcome to my very first Domain Development Drop List of 2012! I started this segment in late 2011 and had a very positive response so I’ve decided to make it a regular feature on my blog. If you haven’t read about what I look for in expired domains, let me give you some basic things I look for:

• I like names with medium search volume, a good CPC, and in a market where there are half a dozen affiliate programs I can think of using right-away.
• If you want to get down to the numbers themselves I typically look for keywords with no less than 1,000 exact-match global searches and less than 10,000. Why limit it to 10,000? Typically terms with this much volume are a lot more work to rank well for so I go for the low hanging fruit in most cases.
• A good CPC to me really means anything above $0.50. I just want to see that advertisers see some kind of monetary value in people who search for this term.
• There is no one set of qualities for the perfect domain for development. Also I don’t follow the rules above every time I buy an expired domain and you shouldn’t either. Sometimes I do buy names with a very high search volume in the hundreds of thousands and with a CPC of only $0.23. That being said, a vast majority of the expired domains that I buy for development do meet the criteria I outlined above.

Bam! Now you know what I’m generally looking for in an expired domain name. If you want to know what I do once I buy a domain for development make sure to read – Domain Development 101. If you’re so darn excited after reading that article that you want to dive right in and build your first site, make sure to read – WordPress 101.

All of the domains featured in this list were found using Protrada. I started using Protrada last year and it has honestly changed the way I search for and buy expired domains. The software is rock solid, lightning fast, and has also been a great tool for managing my portfolio. I am not being paid by Protrada to mention them in this post, I just absolutely love the service and recommend it to everyone who reads my blog!

FlowersRoses.com - 1,900 global monthly searches and a CPC of $4.40 this would be a great option for one of the many flower affiliate programs out there. While it might not be a term you think people would be search for, they are and with a CPC like this there is definitely money to be made in this niche.

InstallationWindows.com - like the previous name this also doesn’t seem like it would get any search volume, but it does. With 1,900 exact-match global searches and a CPC of $6.80 this domain has some great lead generation potential.

ChineseToEnglish.org – while I’m not thrilled with a CPC of only $0.29, the search volume of 18,100 exact-match global and the ease of building a basic translation site makes this one a solid development candidate. With keywords like this I think that the .ORG plays in your favor vs. a .NET, of course having the .COM would be my top pick but for development a .ORG can rank just as well!

QuickHealthyRecipes.org – 3,600 exact-match global searches and a CPC of $1.02 makes this a great fit for development. Recipe sites are easy to get started with and given the focus of these keywords you know exactly what kind of recipes your visitors are looking for. It’s always the best when you build a site that provides people with useful information, not only are you ranking well for a term, but you’re actually making a difference!

BestBackpack.net – backpacks are a big business with a zillion different affiliate offers available in the space. 3,600 exact-match global monthly searches and a CPC of $0.53 puts this right in my typical range.

ExerciseToLoseWeight.net – I will be bidding on this one so just giving you warning and probably shooting myself in the foot for including this in the list, but heck I want to let you know what I would buy myself right? Weight loss is a huge industry with tons of great affiliate offers in the space. This term gets 6,600 global monthly searches and a CPC of $2.92 and if I get it you can expect to see a case study going up very soon, I really love this one!

RimsAndTires.net – 27,100 exact-match global searches and a CPC of $1.08. While there is some reasonable competition in this space and the search volume is higher than I typically go for this name has a lot of development potential.

RouterWireless.org – 14,800 exact-match global searches and a CPC of $1.16. This is a very competitive niche so will really take some time to build-up your ranking for this term, but you know exactly what your visitor is looking for – a wireless router.

That’s it for this week, if you want to get Domain Development Drops more frequently make sure to become a fan of me on Facebook. This year I will be sharing a lot of exclusive content with my Facebook fans so make sure to “Like” my page if you haven’t done so yet!

Of course I always love to hear from you, my readers! So please feel free to share comments about the domains above or share some of your own recommendations. Comment and let your voice be heard!