Domaining business, if done rightly, can be very lucrative and has potential to make you millionaires in no time. But it has also some downsides and secrets. You have to be aware of these facts if you want to sell your domains fast, maintain cashflow and minimize the running cost. Here are 5 facts you must know before buying and selling domains.
So, what are they?
Fact 1: Not Every Domain You Buy Will Sell for Millions
This is the bitter truth. If you buy without doing research the chance is that the domain won’t sell at all. Instead of becoming an asset it would become liability. You will incur loss – loss from purchasing price plus renewal plus your loss.
Anyway, a domain selling for millions happens one in a million times. So as a rule of thumb your focus should be on number of sales rather than amount in a single transaction. This principle is known as Economies of Scale, where profit results from large scale of operation and not from a single sales. In other words, selling more domains at lesser profit consistently will leave you more profit than selling couple of domains at higher prices.
Fact 2: Have a Realistic Expectation
Many newbie and intermediate domainers make this mistake. They register or buy a domain that is not worth more than registration fees but set a sales price of $XX, XXX. They are never going to sell that.
As a domain seller you must not take buyers for granted. Both end users and resellers know what type of domains they need and at what price. So, research well about potential of the domain that you are going to register or buy. It is also very important to set a reasonable price . Of course you can vary the price upward if you get whiff of desperation and/or financial capacity of the buyer.
Fact 3: Keyword Domains Sell More than Brandable Domains
It is easy to understand why keyword domains sell more than brandable domains. When brandable domain is concerned, the buyer has a choice but in Keyword domains, especially those exact match names he does not have any.
Let’s say a buyer is looking for a domain on video on demand o niche. Domains such as VoD.com or VideoOnDemand.com domains have been developed or the asking price is out of his reach. In that situation, he may look for Brandable alternatives such as Vodcy.com, Yourvod.com, VodMovie etc. As you see he has a lot of alternatives and thus you need to keep your asking price for your brandable domain reasonable.
Now let us see another example. A buyer wants exact keyword name, say, Personal Injury Lawyer in California. He has two options, CaliforniaPersonalInjuryLawyer.com or PersonalInjuryLawyerCalifornia.com. the former is the best. He has to buy one of the two above names if he wants good ranking on search engines and getting trust of visitors. If you happen to own of these names, certainly you can fleece some more money from the buyer as the later has no to limited choices.
Since all highly sought after domain names such as LLL.com, NNN.com, dictionary names have been taken and acquiring them is cost prohibitive, there should be more keyword domains on your portfolio.
Fact 4: Understand Your Domain Well
You have to understand your domain very well so that you can determine the correct selling value of domain in the market. Since you would not want to leave some money on table, it is imperative to know the real value of your domain.
Type of extension, age of the domain, traffic it receives, number of sales page visitors, previous contacts for interested customers, search volume for the keyword, CPC etc. should be taken into account to determine the value of a domain.
Don’t use domain evaluation software evaluation like Estibot, Valuator etc. They are useless and no substitute to human evaluation.
Fact 5: Get Negotiation Skill
Psychology plays a huge role in negotiation. You must be polite and professional in all your correspondence with interested buyers. No matter how you badly need the sale, don’t show your desperation. Desperation leads to marginal profit. If the buyer is lowballing, you explain his value of your domains with metrics and convince him it is worth your asking price. Finally, always follow up even if the buyers are not replying. This is a busy world and people lose counts of things they are doing.
Buying and selling domains is an art. You have to learn from every experience to perfect the art. Selling your domains at regular interval is important to bear the maintenance cost of the domains you own, acquire new domains, other investments and of course to support yourself and your family.