Well it’s official, Christmas is only one day away! I’m going to make today’s Domaining MBA Monday short but still share some valuable lessons I learned this year about buying domains. Most of the domains I buy are directly from end-users or from an expiry service. I do hand-register domains from time-to-time but this probably represents less than 10% of what I buy. Most of what I learned this year about buying domains comes from tons of negotiations with end-users which is why I feel like I definitely know a lot more than I did last year, and I’m dedicated to learning much more in 2013.
I’m a big believer in the importance of life-long learning. The moment you think you know it all is the moment you stop learning. With that, below are 3 lessons I learned about buying domains this year.
- Avoid throwing out a price – this is a lesson I’ve learned time and time again, sometimes the hard way, and other times from stories I’ve heard from other friends in the Domaining world. Just ingrain in your head that whoever throws out the first price tends to lose. When you are trying to buy a domain from an end-user you need to push them to throw out a price first, you never know what they are thinking. I bought a one-word .COM this year that I had a budget of around $10K for. I really wanted the name and had spent time researching the owner and determined it was just a random guy who had owned the name for a long time but never done anything with it. I pushed him to throw-out a price first and ended-up getting the name for under $4,000.
- Ignore number of bidders when buying expired domains – don’t worry about how many other people are bidding on an expired domain in auction. Just because a domain has a lot of bids, doesn’t mean it’s a great domain nor does it mean that the current price is justified. Many times expired domain auctions can get out of control and it only takes one very new Domain Investor that gets their heart set on a name to drive the auction far beyond the value of the domain. I know this from personal experience because I was that guy many years ago. When I first started buying expired domains I would become completely fixated on a name and keep bidding even if it went far beyond what I planned to pay. My logic was, “If so many other people are bidding on it, if I win with the high bid then there are many other people that will want to buy it.” Wrong! I overpaid for tons of domains until I learned this lesson and I’ve seen it happen so many times this year I thought it would be important to include here.
- Make it clear you are paying wholesale – this year I made an effort to be very clear from the beginning of the transaction that I only buy domains at wholesale prices. This was a new idea I had earlier in the year and it worked very well on a few transactions and helped the seller understand that I could offer them liquidity, but not top dollar for their domain. Whether I’m buying from an end-user or responding to a Domainer that sent me a list of domains they are selling I make this clear from the very beginning. I define wholesale as 50%-80% off the retail price of a name. So if another Domainer emails me out of the blue offering to sell me a domain and mentions that a very similar name sold for $5,000 I’ll usually let them know that I’d be willing to be 50%-80% off of that similar sale. It’s better to get this out in the beginning, not only will it save you time but it will help you avoid buying a domain for the same price you would sell it to an end-user for.
Okay, that wasn’t quite as short and sweet as I thought but hey, I had a lot to say! If even just one of these lessons makes you see the world a bit differently in 2013 that might just be the push you need to buy that one name that changes everything…and believe me, just like gold, those names are still out there, you just have to mine enough to find them.