Is your Domain Portfolio Junk? 2011 Guide to Dropping your Domains – Part 2

Holy Moly did this post take-off like a rocket ship! Less than 24-hours after writing it and Part 1 already has 35 comments which is GREAT to see! One thing I realized after looking through all the comments is that I need to re-iterate what I said in part one when defining my audience for this post.

This three part series is for people that have made less than $1,000 in Domaining ever and mostly for people who haven’t made a dime.

The purpose of this post was to respond to the zillions of emails that I get from people who want to be Domainers but just have portfolios full of junk and haven’t made a dime yet. If you’ve already made your money in Domaining or know how to flip and sell consistently then you really don’t need this post. What I am trying to do is create a set of standards that can help beginners get-off to a better start. So to help illustrate my point I thought I’d share one of the emails I recently received from a reader:

From: xxxxxxxxx <xxxxxxxxx@gmail.com>
Date: Thu, 6 Jan 2011 13:55:04 -0700
To: Morgan Linton <morgan@lintoninvestments.com>
Subject: My Domain Portfolio

Dear Morgan,

I’ve been reading your blog for the last year along with many of the other top blogs I have found on Domaining.com and other similar sites. Right now I have purchased somewhere around $3,000 in domain names but none of them make any money or I have been able to sell. From what everyone writes it sounds like many people are making money with this but even though I list for sale, email etc. nobody wants to buy them. I try parking with everyone but none make any money. With so many renewals coming-up should I spend the $3,000 again on these names?? Below is the list of my names:

…..

…..

When I took a look at the list of names I didn’t see a single one that would be easy to sell or monetize. I responded to the guy telling him to drop all the junk and take that $3,000 and buy one or two good names that he could develop or re-sell.

This is what I’m getting at folks. For those of you reading this that have made money in Domaining, be it through Monetization or Re-sale give yourself a pat on the back, you figured it out! However don’t forget that there are many people that have spent a fortune buying and renewing junk domains and that’s who this guide is for.

Before I move-onto Part 2 I do want to address one more point from Part 1 which was everyone’s constant slamming of Estibot. I think you’re all missing what I use Estibot for. I do not use Estibot to tell me how much my domains are worth. I do however use it to give me an idea of the order of order of magnitude. If Estibot returns $15,000 the name could be worth really anywhere between $5,000 – $90,000 but it’s probably not worth $10 and it’s probably not worth $500,000. That’s why it’s called Estibot, it’s just an estimation.

So just to be clear, I’m not saying that Estibot should be your holy grail for domain value, but Estibot can help you filter out the junk and if you’ve never made a dime in Domaining and Estibot says that every domain in your portfolio is worth under $100, there’s a good chance your portfolio is junk.

Okay now that we have that out of the way let’s take the second step in figuring out which names to drop. Now that you have the list of names to drop from Part 1 we’re going to filter through that list to make sure that there are no potential gems hiding in there, that’s what Part 2 is about.

Step 2: Take the domains that Estibot indicated were $100 or less and plug them into the Google Adwords Keyword Tool. Any with an exact match search volume above 500 and a CPC above $5 that you still want to keep, add back into your portfolio. Any that have less than 500 exact-match searches and a CPC below $5 will move onto Step 3, the final elimination round!

Thanks for all the great comments on Part 1. As always whether good or bad I want you to always feel comfortable sharing your opinion on my blog! Comment and let your voice be heard!

{ 27 comments… add one }

  • Leonard Britt January 13, 2011, 6:33 pm

    Note that GAKT’s default CPC is not what an advertiser is likely to pay and likely far more than what a Google Adsense monetized site will receive per click. Test putting in a figure of $0.40-$0.75 and see where the site might rank for that phrase. Google pays out what maybe 25% to domainers and yet I have one site which occasionally gets Adsense clicks under $0.01. I doubt seriously the advertiser is getting that traffic for $0.02!

    Reply
  • RH January 13, 2011, 7:20 pm

    Good writing and those people should take ideas from you and learn. I mean with no disrespect you don’t own any great names from what I have seen you list, yet you make money. You don’t need great names to make money. You need ideas, energy and hard work to be successful in the domaining industry.

    Reply
  • Logan January 13, 2011, 7:30 pm

    @RH – what you say is true; however, I don’t view Morgan as a domainer. Morgan is more of a lead gen / affiliate marketer who just so happens to use domains to gain an edge in interactive marketing. I do the same thing as Morgan and long ago stopped thinking of myself as a domainer. The domain name is just a tool to get a small edge in SEO results. That small edge gets me ranked higher in the search engines, which brings my sites more visitors, some of whom take a desired action of filling out a lead gen form on the website I’ve built at the domain name. Once they fill out the lead gen form, I get paid. And the pay out is much better than AdSense CPC, believe me. I’ve come to the point where I spend a lot of time researching, evaluating, and sometimes buying domain names but I think ordinary domaining is for the birds (“pidgeon shit?”). To me, a domain name is a means to an end, and that end is marketing, be it to generate a lead or to make a direct sale.

    Reply
    • Morgan January 13, 2011, 9:08 pm

      Just for the record folks I sold 10K in domains in December so for those who think I’m not a Domainer…think again. None of those names were developed, all were .com and all sold to end-users.

      Still I don’t like working for my money – I’m a passive income guy and want to be able to sit on the beach while money comes in, that’s why I’ve focused on turning domains into brands – it’s a long-term strategy. At the end of the day most of my focus goes-into building and launching online businesses because that’s what I love – starting companies. Still there’s nothing like the thrill of a domain sale and a good flip. This year I learned if you really want to make money flipping names you need to stick to .com.

      So for all you Domainers out there thinking you have to either buy and develop or buy and sell, think again – you can make money both ways but just because I’m passionate in one area doesn’t mean I’m not doing things in other areas.

      Reply
  • TeenDomainer January 13, 2011, 7:37 pm

    I love to use estibot, personally I think that if a domain has above a $2 cpc and over 500 exact search its worth keeping. I have tons of domain with $2-$4 cpc and they rank really well and do great. But its a personal call, but I think $5 is a little high for me.

    Reply
  • Will January 13, 2011, 8:35 pm

    Morgan, to be fair, I think it would be helpful if you gave additional criteria or examples of what you consider to be “junk.”

    I can quickly think of three personal characteristics of junk domains (IMO):
    1. Any misspelled/typo domain
    2. Domain names with more than one hyphen
    3. Domain names longer than three words

    Again, just my opinion. What’s yours?

    Reply
  • Luke Summers January 13, 2011, 8:37 pm

    The Google Adwords Keyword Tool is brilliant. When used in conjunction with valuation tools like Estibot, it can provide a decent overall picture of the quality of a domain. Of course there are other factors to consider that are not captured by these tools, such as brandability and future trends – but overall these tools give some useful indicators of domain quality.

    Using these tools prior to making a decision on a potential domain purchase or registration is one way to avoid accumulating a junk portfolio in the first place! This can be very helpful for anyone just starting in domaining, as the most common mistake when starting out is acquiring rubbish domains, I’ve done this myself.

    I agree with Teen Domainer, a CPC of $5 is quite high and I would personally hang onto anything from about $1.50 upwards.

    I look forward to part three, thanks for sharing Morgan!

    Reply
    • Morgan January 13, 2011, 9:13 pm

      Thanks @Luke!

      Reply
  • Gnanes January 13, 2011, 8:46 pm

    He’s only referring to keyword domains.

    No acronyms or brandable domains like:
    4 letter pronounceable .com
    5 letter pronounceable
    4 letter acronyms

    Domains with more than 1 hyphen are not junk if you know how to develop it properly. I was searching for “wheezing cough” and found this site on first page:
    http://www.home-remedies-for-you.com

    Reply
    • Morgan January 13, 2011, 9:12 pm

      @TeenDomainer – everyone has their own cut-off point. I just know there’s a bigger market for a domain with a $5 CPC since advertisers are willing to pay more. Also as I’ve said a MILLION times on my blog the CPC does not directly correspond to the amount an advertiser will pay, it is usually much less which means with a $2 CPC many advertisers could be paying much less which means an average client isn’t worth as much. It’s not that you can’t sell a domain with a $2 CPC – they sell all the time, I’m just trying to get people started with the path of least resistance and having domains that just make the cut could lead to a much longer sales cycle.

      For example I know just about anyone can move a domain with 10,000 exact match searches and a CPC of $25 whereas a domain with 1,000 exact match searches and a CPC of $3 could definitely sell but I don’t think there’s as big of a market or price tag at the end of it.

      Reply
    • Morgan January 13, 2011, 9:13 pm

      @Gnames Thanks – you hit the nail on the head…although you ruined the surprise for part three! 🙂

      Reply
  • Tony January 13, 2011, 9:23 pm

    I think 500 exact searches or $5 CPC is too high a standard. Google Keyword Tool adjusted their search stats I think a few months ago. What was once 1000 searches is now like 200-300 from what I have seen.

    If you applied that standard to even Frank Schilling’s or Kevin Ham’s portfolios, you’d wind up dropping at least 80% of their names. And you’d effectively make all new domainers drop 99% of their names.

    So what are we to do with those domains with keywords getting 200-400 exact monthly searches and $1-2 CPC? I’d say most of those are worth at least hand registering. This is a difficult gray area and I’m not 100% sure myself.

    Reply
  • TeenDomainer January 13, 2011, 9:36 pm

    @Morgan Totally agree well said.
    @ Tony I feel the same way

    Reply
  • RH January 13, 2011, 10:18 pm

    Tony best comment of the post IMO.

    Reply
  • Logan January 13, 2011, 11:30 pm

    I screen out dropping domains at 1,000+ and $5+. Everything less I tend to ignore. I buy fewer domain names this way, but when I do, they’re usually good quality for SEO purposes.

    Reply
  • Tony January 14, 2011, 6:18 am

    Let me give you guys a true story:

    Back in December 2010, I read a story about how a doctor was losing his patient base. He found out his reputation was being trashed online. He hired “reputation management” companies to clean this up and his practice was back to normal. I wound up looking up dozens of relevant domains, ie, reputation____.com’s and found that all the brandable or keyword searched ones were taken and that only one was about to expire. That one was ReputationSecurity.com and I counted down the days til it expired and grabbed it for regfee. Literally, three weeks later I get an offer via Sedo for $1750 for it and turned it down as I did not feel comfortable selling this for less than $2500. Estibot says this domain is worth $0. There are exceptions to every rule. You must use your intuition and common sense also.

    Reply
  • Will January 14, 2011, 7:00 am

    There’s a great post and discussion along these lines at Rick’s Blog:
    http://www.ricksblog.com/my_weblog/2009/02/do-you-ask-the-right-questions-when-buying-domains-my-top-20-right-here.html

    Tony’s comment and a commenter on Rick’s Blog encouraged me to take a peek at GoDaddy’s list of closeout domains. I just bought a three-word .com with a .05 CPC and an Estibot value of $0. I’m confident that I can monetize or sell it. Morgan, I’ll keep you posted on the results.

    Reply
  • fm1234 January 14, 2011, 8:28 am

    The “Quality vs. Quantity” standard has another aspect to it which is often ignored by domainers — the fact that the ~$9 one spends on renewals _should_ be an entirely trivial concern relative to the value of the time and expertise spent researching the domain. Most of my domains are hand regs, and most of my end user sales are in the mid-three figures. So I am making a nominally very healthy profit — but if I am going to be successful, I have to use an honest and sensible metric for valuing that success, and that includes breaking down the actual time spent on a domain to attain profit. In 2010, including accounting for attrition, income from the domain business only worked out to about $40 an hour for me, which is not exactly a sustainable income model (I mean, if I made $40/hour at a full-time job, that is only about $80,000 a year before taxes and concomitant expenses — what’s the point?)

    Short version (too late!) is that I get the feeling that many people trying to make money with domain names do not take into account the true cost of acquisition, and tend to justify it as a “small” expense because the actual cash outlay tends to be so small. Even “semi premium” names up to say $200 are pretty easy to justify as expenses; I can knock down half of that on date night with my wife. Surely I can swing it for an Exciting Investment In My Future Wealth without worrying too much about it. It’s a bear trap of a mentality, and one in which I think a lot of domainers have at least one foot caught.

    Frank

    Reply
  • George January 14, 2011, 11:19 am

    Interesting discussion. It is true that with google’s new keyword tool formula match search results are down, sometimes by as much as 75%. So this does beg the question as to our previous domain valuation metrics. The important thing j think,is to still go with your gut. Deep down we all pretty much know what makes a good domain, we just have to be honest with ourselves and listen to our gut.

    By the same token, there is much to be said for future trend domains or brandable domains. These are harder to evaluate and obviously come with much higher risk. But they should not be discounted, and estibot is not a very good predictor of those.

    Just my 2€.

    Reply
  • George January 14, 2011, 11:31 am

    Oh forgot to mention that there is also a growing number of IDN investors… would be great to get some insight into their metrics for buying as well. Obviously, buying and developing foreign language domains requires another special skill set… but that’s probably for another post 😉

    Reply
  • ValueDrops.com January 14, 2011, 11:44 am

    Good info Morgan. I just wanted to point out that if you are a beginner, you should never invest a lot of money and buy more domains than you can handle. You should stick to a few, maybe up to 10 that you can focus on selling. Don’t buy more until you can sell these and yes, Estibot can be a good tool, you can also use the estimate from Estibot in your end-user email.

    I’m still new to domaining, less than 1 year, but have sold many domains (mostly dropped domains) and I must add, they all were HAND registered. My other advise is that, don’t buy any domains yet or even pay drop fee, so even if it doesn’t sell, you’re out $8, vs $70 or more.

    I’ve been a developer for a long time but hadn’t done any domaining until recently and must say, Domaining ROCKS! I mean where else can you make 500% – 1000% profit with little effort. Don’t Give Up!

    Reply
  • Owen January 14, 2011, 8:48 pm

    Great job on this Morgan

    Reply
  • Joe January 15, 2011, 2:57 am

    @Morgan

    Were the .com domains you sold in December handregistrations?

    Reply
  • Richard St Cyr January 15, 2011, 5:25 am

    Hi Morgan,
    I enjoy reading your post, very informative. You give out info that is very specific
    that will help the people just learning. The high rollers in this business won’t do what you do at least not publicly, for that THANKS.
    One question, for a word or phrase you said exact match search volume should be
    above 500 I am assuming you mean Global Monthly Searches and not Local Monthly Searches.

    Thanks,
    Richard St Cyr

    Reply
  • Joe January 15, 2011, 5:50 am

    @Richard St Cyr

    Exactly, ‘global’ is the number you need.

    Reply
  • Richard St Cyr January 19, 2011, 6:53 am

    Hi Morgan,
    Yesterday I registered 3 domains and today 2 domains, all .com they are getting harder and harder to find. I will tell you the 3 I registered yesterday idanish.com
    inorwegian.co and iscandinavian.com. Now these have no exact match traffic, but
    2 have value with estibot and 1 does not.
    The other 2 are China domains and Japan domains both.com. These two domains have no traffic and value. I feel that it doesn’t hurt to take a chance with a few domains. Remember 1report.com
    I agree with just about everything you said but I feel it doesn’t hurt to go with your gut on a few domains.

    Thanks for your help,
    Richard St Cyr

    Reply
  • norman edwards February 13, 2011, 10:43 pm

    irstaxdebtrelief.us has $39 CPC but only 1250 exact search according to estibot. Since the exact search is so small, is this domain worth keeping?

    Reply

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