What Worked And What Didn’t In 2011 – Part 2: Domain Sales

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Last year I made some major breakthrough when it came to selling domains. I have always been completely honest when I say that I suck at selling domains. I am not a domain broker nor do I spent a lot of time actively selling domains. At the end of 2010 I had realized that part of my problem selling domains was that I had a portfolio dominated by .NET, .ORG, .INFO, etc. and a small number of .COMs.

After talking with a few of my mentors and friends in the industry they kept reiterating the same thing, “you have to start putting more focus on .COM Morgan!” This was only part of the puzzle but I learned a lot last year and sold over 30 domains last year with an average selling price of around 2.5K. I put more time in than I had in previous years, but I also learned how to spend my time more effectively. Which brings us to what worked and what didn’t work in 2011!

Domain Sales – What Worked In 2011

  • Buying aged, two and three-word .COMs. Almost every single domain I purchased in 2012 was a .COM. The advice I got from my friends who have been selling domains for 10+ years was to focus on two and three word .COMs, so I did. My average price-per-domain went up and I did buy less domains each month than in 2010.
  • Calling End-Users On The Phone. I made a lot of phone calls last year and they translated into real sales much better than I had expected. I didn’t call a million people for each name but instead really tried to identify the 2-3 top people that would be the best fit for the name.
  • Sending Different Sales Emails To Different Potential Buyers. Rather than sending the same sales letter I had customized letters for each domain that really brought-out what made it unique and what the opportunity was. I also shortened all of my emails which before were several paragraphs and are now less than five sentences long. Keeping it short and sweet is important and I think that not making it look like a sales letter plays to your benefit.
  • Listing My Domains On Marketplaces Like Afternic, Sedo, and Snapnames. I made sure that every single domain I bought went-into all of the marketplaces. This year I decided to go with “Make Offer” rather than fixed-price despite data showing that fixed-price names sell better. I’m okay being patient and waiting for the right buyer, I really want to sell to end-users rather than Domainers through these platforms and listing as “Make Offer” will get most Domainers to ignore you. I’m not concerned with selling names quickly, I’m much more interested in selling names to a Buyer who really wants the name and sees the value.
  • I am no longer a motivated seller. Thinking this way changed things a lot for me! Special thanks to Rick Schwartz who really hammered this home in his Domain Sherpa Interview along with Adam Dicker who also made some phenomenal points in his interview. Both Rick and Adam talked about having no issues sending a prospective Buyer away and telling them to find another domain. I took this approach this year and in my sales letters and phone calls emphasized that I was looking for the right buyer, not a quick sale.
  • Buying Domains That Exactly Matched The Keywords In An Advertisers Ad. If someone is already advertising for the exact keywords in your domain then you know they see value in it. If they are paying $5/click you know that they really care about those keywords. If you have the exact-match .COM you might have an interested buyer.
  • Pushing For The End-User To Make An Offer. One of my top mentors (I’ll add him in after the fact if I get his approval) told me that in a domain sales negotiation, the person who throws out the first number loses. They gave me a ton of examples, and they are absolutely right. It took me a while to get comfortable with this and it wasn’t until about mid-2011 that I was 100% on the “Offers Only” train.
  • Using Escrow.com. Using an escrow service is absolutely critical when selling domains to protect you and the buyer. Escrow.com came through and exceeded expectations this year. Not only was the service lightning fast but Buyers felt very comfortable using Escrow.com and really trusted the brand. I’ve said it before and I’ll say it again, Escrow.com rocks!

Domain Sales – What Didn’t Work In 2011

  • Selling Other TLDs To End-Users. While I’m sure there are end-users out there interested in other TLDs everyone I talked to wanted the .COM. When I tried to sell .NETs and .ORGs the deals often went nowhere either because I got no response, or the buyer indicated they loved the name, but wanted it in a .COM. Also selling the .COM owner the .NET or .ORG of their name didn’t produce much either. It really was two and three-word .COMs that got people’s interest.
  • Long Sales Letters. I tried about ten different sales letters this year and found, the longer they got, the less responses I would get. Same was true on the phone, short and sweet always won.
  • Giving A Price Range To An End-User. I sold a domain last year for $5,500 after I told the buyer my range was between $5K-$10K. Once I had said that range I was screwed. I countered his 5.5K and kept trying to bring it up but he wouldn’t budge. I don’t blame him, he got a range, and put in an offer that he was sticking to in that range. Later when I found-out who the buyer was I realized I could have thrown out $25K-$30K and probably sold it for $25.5K. Valuable lesson and like I said in the “what worked” section above, pushing end-users to make an offer was important, and I had to learn from some mistakes to get that.
  • Selling .US Domains. I ended 2011 without selling a single .US domain. As I’ve said before this is a great TLD for development with but I can tell you that end-users haven’t even heard of .US and typically aren’t interested. My sales letters for .US names always received absolutely no response, not one, all year.
  • Asking Buyers If I Could Publish The Sale On My Blog. The answer to this was almost always a very resounding, “No,” but in some cases I got the green-light. In general though this made people really nervous and might have prevented people from buying more names from me in the future. One guy got so nervous he wanted me to sign a separate NDA, all for a four-figure sale…either way, asking this question didn’t go over well or work to build trust. My plan in the future is to include this as a clause in my sales contracts rather than just asking it on its own out of the blue. (Anyone else with experience here feel free to share what you do in these situations!)
  • Selling Domains With Four Or More Words. It really was the two and three-word .COMs I bought that sold this year. Four words or more and they looked pretty darn ugly as the subject of an email, and even worse when you’re saying them over the phone. I bought some great four-word .COMs with great search volume and CPC but didn’t see nearly the level of interest that I saw with my two and three word .COMs.

As always, feel free to share what worked and what didn’t work for you in 2011! Or feel free to let me know anything above that you also encountered last year and share your own experience. Either way, comment and let your voice be heard!

(Photo Credit: betta design on Flickr)

{ 18 comments… add one }

  • Anonymous January 5, 2012, 4:16 pm

    Morgan ,
    if i get a domain before its been droped that is 10 years old and the same domain is let to be axpire then  picked up from the drops,in your experience i could get more money for the aged one?

    Reply
    • Morgan Linton January 6, 2012, 8:51 am

      Hi Rich, 

      Not sure I completely understand your question. Are you saying is there a difference in what someone would pay if the domain is dropped vs. hand-registered? 

      Age is age so if a domain was registered in 1998 whether it is bought through a drop service or hand-registered the original registration date never changes.

      Reply
  • Ryan Gruenwald January 5, 2012, 4:30 pm

    Great tips in this post Morgan. Hope to see you again in a few days at ASW. 

    Reply
    • Morgan Linton January 6, 2012, 8:49 am

      Thanks Ryan! Awesome, glad to hear your coming to ASW, we should definitely get together for a drink!

      Reply
  • Domain Tweeter January 5, 2012, 5:22 pm

    Great post Morgan – thanks for sharing.

    Reply
    • Morgan Linton January 6, 2012, 8:49 am

      Thanks DomainTweeter – glad you liked the post!

      Reply
  • James January 5, 2012, 6:26 pm

    This 2 part series is some of the best, open, easy to read, real advice (aka experience) on domaining and development I’ve seen. If you’re new to Domaining, you won’t find a better resource of this length than these two posts, paid or unpaid. Kudos Morgan sharing what most people are reluctant or unwilling to.

    Reply
    • Morgan Linton January 6, 2012, 8:49 am

      Thanks James – really appreciate the kind words and I’m glad you liked the posts so far!!

      Reply
  • Patrick Ruddell January 5, 2012, 7:34 pm

    Love how you share your experiences, good and bad. Great way for others to learn. Keep up the good work!

    Reply
  • DomainAssets.ca January 5, 2012, 8:10 pm

    Thanks Morgan!  – that’s solid advice and I’m planning on incorporating it into my own sales strategy this year.  Can’t wait for series post #3!
    Cheers,
    Jim

    Reply
    • Morgan Linton January 6, 2012, 8:48 am

      Thanks DomainAssets – glad you liked it!!

      Reply
  • Leonard Britt January 5, 2012, 8:37 pm

    Thanks for sharing!  You make an interesting point about waiting for the buyer to make an offer.  Many times when I receive an email asking for a price, I either never hear a response or they try to counter with a lower offer than my already “fair” price which I pull from my SEDO fixed price.  I usually assume they have already seen the fixed price and are just trying to negotiate lower.  But I try to stick to my listed price.  However, often just quoting a price doesn’t work. 

    Another point newer domainers should not forget is that of Paypal which sadly does not protect domain sellers from fraud.  In the last week I received a $2K offer for a couple of foreign-language .TV domains but the buyer mentioned he would pay via Paypal.  I tried countering at a point between my initial price and his counteroffer (midpoint of a ~10% difference) but insisted on payment via Escrow.  No response from the buyer….

    I have noticed a pickup in sales the last couple months and am wondering if perhaps it is due to what might be referred to as the minisite factor.  I’ve been launching a considerable number of semi-automated minisites with either Domain Holdings’ DomainPower platform or WhyPark (now DomainApps) platform.  OK static minisites aren’t going to rank well in Google.  But perhaps that relevant content (and a “For Sale” tag) becomes a selling point and communicates how well the domain works for branding purposes.  A parked page just doesn’t promote a domain the way a site with relevant photos and videos does. 

    I will agree you have to be much more careful with .Net and .TV registrations as they are harder to sell than .COM. 

    Reply
    • Morgan Linton January 6, 2012, 8:48 am

      Great feedback Leonard, thank you so much for sharing your experiences!

      Interesting point about a parked page vs. a minisite and how this might be perceived by buyers.

      As for end-users seeing the price on Sedo, I’ve found that most end-users have never heard of Sedo, Afternic or Snapnames, and often don’t even know that people are actively buying and selling domains.

      Reply
  • AndyO January 6, 2012, 2:49 am

    That’s an Australian sign! Good choice! 🙂

    One thing I’ve been wondering for a while, is whether the best choice is to point your domains to Afternic/Sedo parking pages after listing them, or to a customised “your company” page stating the domain is for sale (similar to what you mentioned previously about them going to a page with an image listing recent sales and contact information)…

    If emailing end users and they go to the domain, and it goes to say an Afternic parking page with a BuyDomains banner across the top, I don’t think it’d be instilling a lot of confidence in your email and seem more like a scam – maybe a phrase in the email stating it is listed at Afternic/buydomains may be the solution?

    I’d love to hear Morgans or anyone elses feedback on this!

    Reply
    • Morgan Linton January 6, 2012, 8:13 am

      Hi Andy – great question and one I’m not sure I have the answer to!

      I’ve found that an end-user doesn’t seem to care if it’s parked or has a site on it. That being said, I do agree with Elliot that having the site developed will lead to fewer offers.

      Right now I have most of my undeveloped names parked with Voodoo.com, pretty cool because I can put a “For Sale” strip at the top that sends the lead right to me. You can see a sample at http://www.justoriginals.com

      Reply
  • DomainFuze! January 6, 2012, 8:25 am

    Thanks Morgan, this is an invaluable post to domainers at any stage of their career.  Love the transparency.  One thing that I found fascinating:

     Selling .US Domains. I ended 2011 without selling a single .US domain. As I’ve said before this is a great TLD for development with but I can tell you that end-users haven’t even heard of .US and typically aren’t interested. My sales letters for .US names always received absolutely no response, not one, all year. 

    …and somewhat disheartening, given that’s how domainer greats like Ron Jackson made $$$ to fund their domaining exploits.  To me, that reinforces: stick with .coms, unless you’re banking on getting lucky, being in the right place at the right time.

    Reply
    • Morgan Linton January 6, 2012, 3:14 pm

      Thanks DomainFuze! – really glad you enjoyed it!

      I still love .US, great for development, but I’ve had a hard time selling mine.

      Reply

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