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!

Wow – this week flew by! I went to sleep at around 6AM so today has been a bit of a blur, now I finally have a break in the action, and a minute to reflect on DOMAINfest 2012. The conference was absolutely incredible this year, and as always I am very interested in understanding where the industry is headed.

I’ll be doing a much more detailed post about the conference on Monday but wanted to share my reflections on DOMAINfest while they are fresh in my head.

• The sale of Moniker and Snapnames was big news and Oversee and their new executive team looked incredibly prepared to take the company to the next level. In business sometimes the hardest thing to do is identify failure and make a chance. With an increase in focus I think Oversee will be doing some very exciting things this year.
• WordPress is hot – I heard more talk of development this year than ever before and WordPress is definitely a major focus. As a big WordPress fan I can completely see why so many Domainers are gravitating towards the platform.
• Tim Ash gave a great talk about Landing Page Optimization – I’ve seen him speak before and read his book, still every time I see him I pick-up something new. Tim’s the reason I added the “Featured In” section at the header of my blog. If you missed the talk or my coverage of it you can read about it in my summary of day two.
• Live auctions sure don’t bring the kind of liquidity that they used to, or at least not nearly at the same prices. I think it is clear that 2012 is still a buyers market, and there were some stellar deals in the auctions. I do really like the auctioneer that they use, he keeps it fun and entertaining. I think the challenge live auctions have is fairly simple, the buyers are Domainers. If you have your names priced at wholesale prices, you can probably make a sale, but end-user prices rarely yield bids. More thoughts on this coming-up on Monday!
• Domainers know how to party – the nightlife at DOMAINfest was a blast from the nightly parties to some very fun after parties. As you all know, I don’t blog about parties or nightlife so you’ll have to attend a conference like DOMAINfest to experience them for yourself. I have some great friends in the industry and it’s been awesome to catch-up with everyone and enjoy some adventures in LA. Overall I think the #1 piece of feedback I heard from people was the fact that LA nightlife ends at 1:30. I know, it’s pretty lame, I apologize for LA, but our weather is perfect – you can’t win them all!
• Biz Stone gave one of the best keynotes I’ve ever seen. My favorite quote is – “creativity is a renewable resource, it is something that you can always tap” – so true and so inspiring!
• I remember sleep – but vaguely…it’s been over a week since I’ve had a full night’s sleep, while I had a blast, I’m looking forward to some R&R. Until Tuesday when I go to Boston, and Wednesday when I go to NYC. Yes, there never really is a dull moment!

Stay-tuned, more to come!

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!

I am unbelievably excited to announce that DomainInvesting.tv, a dream that started over two years ago, has now become a reality! The final version of our first episode was finished this week and I will be bringing it live on DomainInvesting.tv tomorrow and onto the iTunes store in early February!

Since all of you have been so supportive of this project I thought it was only fair to let you be the first people to see it! I would also like to give a huge thanks to Oversee, without them this would not have happened. Through they’re sponsorship and support we now have a solid video to show anyone who doesn’t know what we do, but wants to learn!

Remember, the target market for this video is not Domainers or even tech-savvy people. The real goal of this video is to be able to show it to an end-user, let’s say a Doctor, Lawyer, or Investment Banker that knows about investing, but doesn’t know a thing about Domaining. I’m sure you’ll recognize some very familiar faces in this first episode – thanks to everyone who took the time to sit down and record an interview for the show, together we can show the whole world what Domain Investing is all about and grow our industry in 2012!

I got a very nice email early last week from someone who had discovered my blog and wanted to get started investing in domains. He had read some of the articles that I had written about not rushing in and taking time to learn the business and wanted to hop on a call to discuss more.

When we got on the phone, the person told me about how he had lost his job and was looking for a way to generate some income. He wanted to do something that would start making him money in 1-2 months. Most of his savings had been spent and he was getting ready to put the last of it into domain names.

After explaining his situation he went on to discuss how he had become inspired by my blog and a few others and wanted to get started. This is where I stopped him, it wasn’t the right fit, it’s not the right way to get started, so I told him – “I would not recommend Domaining as a path for you right now.”

I explained that Domain Investing is great for people that already have a stable income source, have money to invest, and are looking for options outside of the stock market. While you can definitely build-up an incredible business in the space, a few months won’t cut it and depending on your budget it can take years to learn the important lessons you need to make money in the space.

I wasn’t trying to crush a dream here, or paint a negative picture about Domaining, instead I wanted to be completely honest. It can be all too easy for people to look at a list of domain sales and think, “I can buy a bunch of domains, sell them for a huge profit, and cash in!” In fact, I think it is this path that most of us take when entering the space. I personally bought over 1,000 domains when I started and dropped over 600 my first year.

There’s a learning curve and I tell anyone that wants to get involved in the space that it won’t happen overnight, it’s not a great way to get rich quickly, but the potential is incredible, if you do it right. The thing is, as I said above, most of us don’t do it right in the beginning which means burning through hundreds, thousands, or tens of thousands of dollars learning the business.

If you have money to invest and are looking for a way to make more money that you would in the stock market domain names offer that opportunity. However, just like investing in the stock market or real estate, you have to take the time to learn. My best advice to anyone that wants to get started is to read as much as they can and then go to a conference and begin networking. Don’t buy a million names, just learn and begin forming a proven strategy that you yourself want to follow.

So what was the end result of my call? I recommended that the caller finds a job and gets back on their feet. During this time they can still read all about Domaining, follow case studies, watch interviews on sites like DomainSherpa, and really get some greater depth in the space.

Then, when they have gotten to a comfortable place financially and have additional money that they want to invest, then they’ll be ready. At the end of the day I feel like I probably saved that guy thousands of dollars. To many people this might be a drop in the bucket but to him this was the rest of his life savings.

I love Domaining and am unbelievably proud of building a success business in the space. I love inspiring new investors and teaching people what I have learned. At the same time, I think we all have the responsibility of being realistic with people and making sure they understand all the risks associated with this business and the incredible learning curve that most people have to go through.

In my book (Domain Investing Handbook) I make this point resoundingly clear right-away. Let’s face it, most Domain Investors start-out as Domain Collectors, there’s nothing wrong with this, but make sure you’re realistic with yourself and your expectations. Domaining is not a get-rich-quick scheme, it is a complex investment strategy, and in my opinion, the best way to own one of the most valuable asset classes on the planet. You can build-up a five,  or six-figure income with Domaining but you have to do it the right way, and at the right point in your life.

With DOMAINfest less than two weeks away, Domainers from all over the world are getting ready to converge on Santa Monica. I couldn’t be more excited about the conference this year and can tell you that this is absolutely the best way to get a head-start in 2012. Since I live in Los Angeles I thought I’d head over to Oversee Corporate in downtown LA and say “Hello!”

I have always found everyone at Oversee to be very welcoming and excited about sharing what they are up to and how they are moving the industry forward. I’ve been a fan of Oversee for years as Moniker, Snapnames, and DomainSponsor are all services that I use. So I thought it would be fun to go to their head offices and meet with Aaron Kvitek, the VP of Marketing and Communications to talk about what’s ahead for DOMAINfest this year. We talk about the seminars, venue, and of course – some of the outstanding parties and networking events!

Are you going to DOMAINfest this year? If not, there’s still time to get your ticket and join the rest of us in Santa Monica!

There is a shift going on, you might not see it yet, but it’s happening – a strong interest is coming from investors across Asia and many of the top Domainers out there are cashing-in. If you attended a Domaining Conference last year then you couldn’t have missed this one – industry leaders got up and said, there is a very strong, growing interest in domain names coming from the Asian market, specifically China.

Sites like 4.CN have grown considerably in the past year and catering to investors that buy beyond numeric domains which was the original focus of the site. Short, brandable .COMs are hot and investors around the world are scooping them up, this is causing a shift as some of the best domains make their way to new homes, many of these in China.

Hong Kong has been on the Domaining map for some time now especially with .Asia headquartered in the city. The .Asia organization has done a great job of raising awareness about Domain Names all across Asia, but like many companies choose Hong Kong as their home-base. Popular Domaining company PPX has offices in Hong Kong and there are a number of Domain Investors who call Hong Kong home.

So what’s the big deal here? The big deal, as I see it, is the great opportunity for the Domaining community to grow as a whole. There’s a great community of Domain Investors in Asia and we should all be working together, making deals, and growing the space. As savvy investors you should always be asking yourself where the activity is in the market and how you can network with people investing in the space.

So put Hong Kong on your radar if you haven’t already. It’s a beautiful city and might just be one of the Domaining capitals of the world soon, if it’s not already!

One of the most common questions I get from blog readers is, “What registrar should I use for my domains?” I personally keep most of my domains between Go Daddy and Moniker, and a handful of other registrars. I’ve always had a great experience with both of these registrars but with so many other registrars out there it’s not fair for me to only promote these two. So I’ve decided to run a completely unbiased 2012 Domain Registrar Showdown.

The idea here is that I will evaluate a number of registrars based on five key qualities that I think we all agree are pretty darn important. I’m still picking the final list of registrars I will be evaluating, feel free to recommend a few. I have finalized the criteria I will be using, both are listed below!

Registrar Evaluation Criteria

1. Technical Support – how long do I have to wait on hold before I get a real person? (I will be calling three times to get a fair average)
2. Registration and Renewal Fees – how much does it cost to manage your portfolio at a registrar?
3. Security – not all registrars are created equal when it comes to security, I’ll be getting under the hood to find-out which have the best security.
4. User Interface – does the registrar provide an easy-to-use interface or is it like navigating a maze?
5. Hosting – does the registrar offer hosting options, if so how good are they?

Registrars To Be Evaluated

• Go Daddy
• Moniker
• Dotster
• NameCheap
• Name.com
• OnlyDomains.com
• 101Domain.com
• Epik
• DomainIt
• 1&1
• Network Solutions
• Register.com
• Fabulous
• eNom
• FastDomain.com
• Domain Monster

If you notice that a registrar that you use is missing from the list please let me know and I’ll make sure to add it to the evaluation. The entire process will take roughly one month and I plan to share the results in mid-to-late February. Stay-tuned, more to come!

DOMAINfest is now less than a month away and already I’ve been coordinating plans with dozens of Domainers that will be flooding Santa Monica in the coming weeks. I have always been truly impressed by the quality of the speakers and seminars that DOMAINfest has, making it a great platform for new and experienced Domainers to learn more from experts in the field.

One of my own personal heroes is Tim Ash, an expert in Landing Page Optimization, CEO of SiteTuners, and author of the book aptly titled, Landing Page Optimization which I highly recommend to all the Domain Developers out there. I had a chance to catch-up with Tim at Affiliate Summit in Las Vegas this week and he was kind enough to record a short video saying hello!

Tim is one of the excellent speakers that you’ll have a chance to see, meet, and network with at DOMAINfest. So with that, I’ll hand it over to Tim!