The Truth About Buying And Selling Expired Domains: Part Two

Welcome to Part Two of my post on buying and selling expired domain names. If you haven’t read part one, put on the brakes and go back and read it now.

Now back to “The Truth About Buying And Selling Expired Domains.” The truth is that many expired domain auctions are driven by the emotion of being in an auction and the mentality that comes with that rather than real metrics that would lead to a successful flip in the future. It only takes one persistent newbie to drive the price of a domain through the roof and with it, take a number of other bidders for a ride as they falsely identify this activity as relating to the real value of the domain.

I can’t tell you the number of times I’ve heard someone say, “I paid more than I had originally wanted but there were 20 bidders in the auction so I already know there are lots of people interested in buying the name.” While this may sound good at the time, trying to find those people and sell them the name is probably more of a challenge than you would think.

The truth about buying and selling expired domains is that most of what you’re bidding on is junk that you probably won’t ever be able to sell, or if you do, you’ll sell for a very small profit, or loss. It is those few names, those needles in the haystack so to speak that you really should be looking for. They won’t necessarily be the names with the most bids (although sometimes they are), and they won’t necessarily be in one of the hottest niches out there like insurance or debt.

At the end of the day you need to put your blinders up and ignore what other people are doing, because everyone is different. The person bidding high on a specific domain may be doing so because they have a buyer who wants names in that niche, or maybe they themselves develop in the niche, the point is – you don’t know. As I’ve said above it could also be a brand new investor that has no idea what they are doing and is just driving up the price. The point is, you should know for yourself why you are buying the name, and why you specifically would be able to sell it.

Since I really like examples I thought I would give one. A couple of years ago I sold a diamond-related domain to a major diamond importer. After selling the name they asked me if I had any others. I told them that I didn’t but that I would be on the lookout. Over the next year every time I would find a diamond domain that was expiring I would run it by them, if they were interested I would buy it and since I knew what range they would be buying in, I could make sure I would turn a profit.

When I was bidding on expired names in this niche I was in a different position than other bidders and in many cases would fight until the bitter end to get a name. However, as it goes with auctions, there were some names that I bowed out of once they exceeded a price point that I knew would allow me to turn a profit. I then had to wonder if the auction winner had a buyer in mind like I did, or if they thought the name was worth more because there was so much bidding interest (from me in this case). Sure it was worth more to me, but without a buyer in mind the price could be completely unreasonable.

This is where the rubber hits the road with expired auctions. While it can be fun to stay up late at night putting in bids and doing keyword research on the “hottest” names, at the end of the day you have to ask yourself if you have a clear path to turning your purchase into a profit. If you are buying expired domains based on bidding activity you could be buying names that you can’t sell, or to put it a different way, you could be building a collection, rather than making real investments.

And there you have it, the truth about buying and selling expired domains, from my point of view. Of course there are many different viewpoints here and that’s where you come in. What do you think? Comment and let your voice be heard!

(Photo Credit)

{ 6 comments… add one }

  • rh2000 July 20, 2012, 6:17 am

    Good information.

    Reply
  • Anthony July 20, 2012, 8:05 am

    Thanks Morgan,

    I would add

    – Get to know the handles of the other bidders, some people are going to keep bidding because they have very deep pockets and large portfolios, they are pros. This works two ways, usually these people have no real use for the domain so they will have a limit, unlike someone who wants to build out the domain, however if you also have no use then their limit is likely to be higher than yours.

    – After a while you notice that names you bid on one year drop again the next year, this happens frequently. I have also noticed that there must be a lot of people not paying because names that you bid on last month are coming back up this month on a more frequent basis!

    – Do not back order names until the last minute if that names does not have a bid on it. You are only attracting the attention of the people mentioned in point one who are letting you do all the work for them.

    – If you are buying domains to build out set yourself a limit to the amount of names you buy before you build out a site on at least one of them. It is far too easy to buy a name you think you will develop then leave it and buy another and get to the position of having 40 names you thought you were going to build out.

    MOST IMPORTANTLY –

    – When you are first starting out in domaining, for a week print out the list of names from somewhere like Namejet and go through it highlighting the names you like. When you highlighted the names check online to see how many backorders there are on the names youve choosen. If youve choosen 20 names and 19 have no bids then you are doing something wrong. If you have 20 names and youve managed to pick out the top 10 with the most backorders on them already then you know you are picking out quality.

    Reply
  • Don Edmands July 23, 2012, 7:13 pm

    Morgan you laid it out perfectly! Domains are getting harder to come by and personally I do not go over 1500 dollars. Thing about domains…. pick niches not to exceed ten and stay the course. Know specifically the keywords your are looking for and master that niche. Then you could be in a position to sell the entire portfolio to someone like the diamond folks! I do not recommend chasing terms and being scattered with the keywords or base terms you seek. That can get you in the most trouble…cool article Morgan>>>>>>>>>>>>>>>> READ CAREFULLY BEGINNERS AND AMATEUR INVESTORS!!!

    Reply
  • Jeff September 17, 2012, 4:14 pm

    Another thing to do is to check to see if the domains have been banned by google and/or google adsense. I have purchased expired domains before checking only to get a nasty surprise. One I paid $3500.00 for only to find out it is banned on google. I could flip it but I wouldn’t do so as I don’t want to have somebody else burned by the domain so I wrote it off as a stupid mistake.

    Reply
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  • Vox Sapiens January 20, 2019, 5:58 pm

    You said:

    I can’t tell you the number of times I’ve heard someone say, “I paid more than I had originally wanted but there were 20 bidders in the auction so I already know there are lots of people interested in buying the name.” While this may sound good at the time, trying to find those people and sell them the name is probably more of a challenge than you would think.

    But this makes no sense. You’ve already outbid all these people. So they’re not going to buy from you at a higher price than their final bids in the auction – particularly because the emotional excitement of the auction has disappeared. Winning an auction is not good news unless you want to develop a site on the domain that you buy.

    Reply

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