Making mistakes is common in all types of learning and profession. This is also true to domain trading. What counts is not only learning from mistake of one’s own but also from mistakes of other domain investors. In today’s blog post I will discuss top ten mistakes that domain investors commonly make.
(1) Registering Trademark Related Domains: Many newbie domainers frequently make this sort of mistake. They register domain names based on popular brands like Apple, Facebook etc. and try registering typo domains or domains that combine the brand name plus a keyword, such as Facebooklikes.com, Godolge.com. What they forget knowingly or unknowingly that these domains are trademarked and the consequence can be disastrous.
Most of well known companies have their own legal cells. They actively look after trademark violators. Usually the main motive behind registering trademarked domain is to sell the domain to the trademark holder company and make huge amount of money. But things are not like that. You can face legal action at any time.
Trademark related disputes are mostly fought by filing UDRPs (Uniform Domain-Name Resolution Policy) and often by resorting to legal action in the court of law. In these cases, the company has more than 90% chances of winning the disputes. You are not only going to loss your domain but also mental peace. Court case can cause you heavy financial losses. The risk certainly is not worth taking.
So, avoid registering trademark related domains or buy from other sellers.
(2) Buying/Bidding domains beyond budget: Buying or bidding on domains tend to be very addictive. Worse, you will find justification your excessive buying impulse with excuses like building a good portfolio or fear of future unavailability. In this process you will cross your budget and even borrow money from others. Excessive buying signifies lack of discipline on your part.
Excessive buying of domains is a bad habit. Remember that buying a domain is lot easier than selling one. Unless a domain is top notch or has potential, never exceed your budget. Domaining is done as a business on long run. Not short term flipping. That is why buying within your budget is important to for your personal and professional line.
(3) Not checking spellings properly while registering:This is one-time mistake must domainers have made. Fortunately, people usually fast learn from this mistake. When you misspell a domain while registering your intended domain, it becomes worthless. I had done mistake once. While registering burglaryprotection.com, I mistyped burgalryprotection.com. You got to be careful while registering your domain name.
(4) Lottery Mentality:It is so called because there are domainers who buy hundred or even thousands of domains, thinking one big sell will offset the total cost and leave them with some profit. This strategy can be successful if you research each domain well before registering. This is obviously difficult task and can consume lot of time. Anyway, domainers with lottery mentality either lose money or make very little profit. Domain business is not a lottery because unlike lottery, all domains don’t have the same chance of winning the jackpot.
(5) Not taking renewal fees into account:You cannot purchase a domain for once and all. You have to pay early renewal fees to retain ownership of the domains. The larger the size of your domain portfolio, the more renewal fees you have to pay. Sometimes, many newbie and intermediate domainers buy domains from secondary markets at cheap rate without mindful of expiry date and renewal fees. Large number of domains can dramatically increase your running cost. Hold domains that you are capable of renew.
(6) Not taking domaining seriously: Domaining, even it is your part time profession, should be taken very seriously. Domains are online property and must be taken care of like you do with your physical properly. If you forget to renew some of your domains, they will expiry and somebody will sure to grab them. Similarly, if you don’t promote your domains you are unlikely to receive good offers. You got to look for opportunities to buy and sale. Domain are more valuable than other commodities like real estate, gold or silver. They can appreciate more quickly than any other real/virtual properties.
(7) Not marketing their domains:To be a successful domainer, you have to make a couple of good sales at regular interval to meet your running cost and keep your morale high. Unless you market your domains your domains won’t get good exposure. The good thing is that marketing does not require that much time. You can hire brokers and list in marketplaces like Sedo, Flippa etc.
(8) Not singling out sub-niche(s): Domaining is a broad niche and there are thousands of sub-niches in it. Obviously, you can’t focus all on all of them. Personally, I prefer short domains (LLL and LLLLs), brandable domains and dictionary names. I choose these sub-niches because I have good knowledge on them and these domains are extremely liquid. I have couple of domainer friends who spent their whole time on IDN (Internationalized Domain Names) and made considerable profit. You thus got to delineate an area for yourself. The narrower is your niche, the more good domains you likely to pick. It also helps in saving time and resource.
(9) Always in hurry to sell:This is one of the grave mistakes that majority of newbie and intermediate domainers make. They try to sell as soon as they acquire domains. In this process they end up with marginal profit. Often they do piggy-backing. They justify their action because they think they are making some profit. They forget the fact that had they waited a couple of years or even months, they would have multiplied their profit.
One of my domainer friends named David told me his interesting story. Eight years back, when he started buying/register LLL with non-premium letters like X, Y and Q (because they were available and somewhat cheap), many people dismissed him. He was ridiculed of wasting money by buying so-called worthless domains. Flash forward eight years! Time has completely changed now. Value of LLL Com domains are soaring high. David has just sold one of his LLL at Sedo for a high $XX, XXX and another at mid $XX, XXX. He still has another 15 LLLs in his repertoire but he is in no mood to liquidate though the situation is rife. He is holding them for future.
The bottom-line is that don’t try to be hurry to sell your good names. Hold them till you get right to sell.
(10) Not doing research before buying and selling: Domaining is a serious job. You got to have expert knowledge about domains you are registering or buying. The same is needed when you sell or else you might undersell (though you make a good profit) and loss some additional bucks. You have to be in touch with current reality and maintain a proper account of the cost you have incurred or have been incurring.
The ten mistakes discussed above are not my personal experience but are views of seasoned domainers, which I personally collected. You may not have committed these mistakes, but if you prevent these mistakes that others have experienced you will become a successful domain investor sooner than later.