When looking for domain names to buy on the secondary market, you may find it productive to undertake the same research process you would follow if you were going to register an available domain name, such as keyword research. However, once a third party becomes involved, other factors must be taken into consideration, including:
Here’s a specific example: in your research, you find a piece of new software that will make it very easy for car parts dealers to take their stores online. That information, coupled with your own experience, has shown you that the likelihood of finding a simple, memorable domain name relating to that industry is zero. However, you decide that you can afford to spend up to $10,000 on securing a suitable domain name because there will be a higher demand for it in the future. So, you draw up a shortlist of names that you’re absolutely certain would have a high resale value by next year (none of which are currently available). This list includes:
Now it’s time to start honing your list down to the top one or two candidates. To do so, you need to examine the use to which the name is being put. Try and visit each domain name on your shortlist by typing it into the address bar of your browser to see if it currently has a website associated with it. If there is a site associated with the domain name, is the site:
A) Related to the domain name, and associated with a successful business that is using the domain name as its primary URL?
In the example, if you were checking the domain name “carparts.com” and you found a site belonging to a company selling car parts, with “CarParts.com” as its company name or in its main logo, with an up-to-date News section and copyright statement on it, then clearly the domain name is being put to very good use by its current owner. BUYING DIFFICULTY: 10/10.
B) Related to the domain name, and associated with a successful business that is NOT using the domain name as its primary URL?
If you checked out “carparts.com” and found an up-to-date site belonging to a company selling car parts, with “AutoParts.com” as its company name or in its main logo, with an up-to-date News section and copyright statement on it, then while the domain name is clearly being put to good use by its current owner, the owner is not using the domain name as the primary domain name for their site. This may make it a little easier when it comes to negotiating a purchase. BUYING DIFFICULTY: 9/10.
C) Related to the domain name, but containing clearly out of date material?
If you checked for “carparts.com” and you found a site with broken links, missing pictures and a 4-year-old copyright notice, then things are looking more promising. While the domain name owner clearly made good use of the domain name at some point, it is not being used very effectively right now. BUYING DIFFICULTY: 6/10-8/10.
D) Related to the domain name, but essentially linking to one or more affiliate programs?
If you checked for “carparts.com” and you found a single page with a few affiliate program links relating to car parts sites, your attempt to purchase the domain would be very closely tied to how much revenue the domain is currently generating. In other words, the current owner is monetizing the domain name by sending its traffic straight to an affiliate program and receiving a commission from the transactions generated by visitors. Therefore, the value of any sale must reflect this loss of income in addition to the value of the domain itself. However, the current owner is less likely to have any deep or long-term attachment to the name. BUYING DIFFICULTY: 5/10-7/10.
E) Unrelated to the domain name, but linking to a generic affiliate link or parked with PPC ads?
Using “carparts.com” again as the example, if you visited the site to find a generic “Hottest Sites on the Web!” page filled with affiliate links to gambling, credit card, cell phone, loan and other ads, then any transaction will likely be based on primarily on how much revenue the domain is generating. It’s also clear the current owner isn’t too sure what to do with the domain name, since they’re not targeting it at an appropriate affiliate program. BUYING DIFFICULTY: 4/10-6/10
F) Showing a generic “Registrar” page or a blank “Under Construction” page
If “carparts.com” directed you straight to a page advertising a Registrar’s services or an Under Construction page, then clearly the owner hasn’t “moved in” to the domain name yet. At the same time, they are not currently doing anything with the name to generate revenue, so it may be easier to persuade them to sell it. BUYING DIFFICULTY: 3/10-5/10.
G) Pointing to a “Domain for Sale” page
This could be your hardest challenge or an easy transaction. The domain name is owned by somebody who, at the least, understands that desirable domain names can have value. The prospect of closing a sale will depend on the desirability of the domain in question, the current owner’s expectations and experience in the domain name resale market, and your negotiating skills. BUYING DIFFICULTY: 4/10-10/10.
H) No website at the domain
If the domain name is not currently pointed at any website, this at least tells you that its owner is not making any money off of the domain name right now. Maybe there used to be a site at that domain name or maybe the server hosting the site is offline. Whatever the reason, the domain name is currently gathering dust, which should make it a little bit easier to close a sale. BUYING DIFFICULTY: 2/10-8/10.
Now that you know a little about the difficulty in picking up names from website owners, let’s look at how domainers usually try to buy the names for the right prices.