Many people ask me the question “Maxwell, how did you get into domaining?”. This comes from both established, seasoned domainers, as well as people who are only slightly (if at all) aware of the bustling, out-of-the-mainstream industry that is domaining.
I had a similar fascination with the practice before I got into it, as to how one becomes a part of it all. It seemed to be a real “boys club”, where you had to “know someone”, or be “in the know” in ways that the layperson may not be in on, in order to make money at it.
After all, how do you know what domains other people willing to pay a premium for? And if the guys who made the headlines have been holding onto these names since the 1990’s, how is a newcomer to the game like me supposed to get a move on?
I got into domaining a little after (okay, a lot after) that time frame. Here’s how it all started for me…
It was the Summer of 2009. I was 16 years old, sitting at home, bored on the computer. At this point in my life, I had left school in pursuit of a career in real estate, and was working away at a call center job earning $9.75 an hour, just as I had started my pre-licensing studies with my local real estate board. I knew I wasn’t going to get rich doing the call center bit, it was just “something to do for now”.
Having been an avid eBayer since my preteens, I was looking on eBay for something on that particular day – I can’t remember what. But, in doing so, I encountered a listing for a domain name, and became slightly confused by the fact that not only were domain names being bought and sold on eBay (I didn’t think they were ever transacted this way), but they were changing hands for less than what they cost to register (i.e. less than $10).
It seemed too good to be true. I wondered, “how are these guys making any money?”. I started to notice that some names were selling for a bit above the registration fee, which suggested to me that it was a “quick flip”, “slightly above cost” business model. It made sense.
But for good domain names of two and three words to be sold for $3 or $5 just seemed a little… off to me. Like, they were too good to be that cheap.
I was confident that I could sell some of these names for at least a few hundred. There had to be someone out there that I could talk into it. They sounded good enough to me. My thinking was that they should sound even better to someone who can actually use them.
I talked myself into it. I decided, “why not place a bid?”. Right then, was when my life changed forever.
I won a few names in auction, just spending a few bucks here and there. This gave me the reassurance that in the worst of cases, I’d only be out a few bucks. This isn’t a high-stakes game.
At this point, everything about this was all new to me. I had no idea what the heck I was doing. It was purely guesswork.
Once the domains started coming into my possession, I started searching around on Google a little bit, to find some domain name appraisal tools, just to get a sense as to what they’re worth.
I got some very promising appraisals for some of the domains I’d just bought… particularly for a name of mine that related to cash advances. That got me excited.
But I knew that for it to mean anything, I had to figure out just how I could translate that into real dollars, instead of an illusion of them.
Remember, money talks.
Call center skills coming into play, I decided I’d pick up the phone, and call some companies that might be able to use the name.
At this point, I had no idea how to pitch a domain name. All I knew was that it sounded cool, and in my honest, professional opinion, this name could actually be of use to the companies I was calling.
When I made the calls, I was literally making random guesses as to who to speak to. Domain name manager? No such thing. I’d tap-danced my way through improvised phone calls plenty of times, so I just adapted those skills over to these phone calls.
Then, I spoke to a company that happened to be in the same province as me, and I was given the email address of the guy who oversaw the company’s web presence. I had no doubt that this was the right guy to be hearing “yes” or “no” from.
I sent him an email about the domain, and he got back to me almost right away, asking me “how much are you looking for?”
This was a big moment for me. I knew I had him interested, and it was just a question of “how much” at this point.
I’d only paid $4.50 for the name, so I knew I’d get some money out of this one. But at this point, it was up to me as to just how much that would be.
One of the automatic valuation tools I’d used told me the domain was worth $1,200. Looking back, that might have been plausible for this particular name. But I wasn’t comfortable quoting that high a figure. Didn’t want to get greedy. I felt a little more comfortable in the range of a few hundred.
After giving it some thought, I explained the appraisal, and told him that if he wants the name, he can have it for $350.
With no hesitation, and no resistance, he accepted, and asked me how I’d like to be paid. I then initiated the transfer process for the domain name, and in less than an hour, the money was in my bank account. I still remember sitting at the kitchen table, eating some lunch, and getting an email alert on my iPhone, saying that I’d just received an EMT (e-mail money transfer) for $350.
For me, doing the call center job, that was a week’s pay. I’d have to go downtown five days a week, hammer away at the phones, stress myself out, and hear “no” a hundred different ways before I could have $350 to my name from that job.
Plus, I had to pay my fare to get on the subway to go to work. In domaining, there’s no office to get to.
I knew I was doing something right. I hit the target. Using very little of my time, I earned what normally would take very much of my time. I just had to find a way to duplicate this over and over again.
I started buying up some more domains, making some end user flips here and there. But nothing too substantial, this has been mostly a hobby for me. Perhaps my best move was to join DnForum.com. It put me into contact with many fellow domainers, and contained discussion threads dating back as far as 2002.
This hasn’t become a primary source of income for me by any means, but above and beyond anything else, I think it’s made me more evolved as both a person and as an entrepreneur.
I’ve become connected to many different professionals as a result of being in the industry, learned many new things, and become conditioned to what the internet commerce world is like from the “other side”. Oh, and I’ve made some money along the way, too.
Today, my holdings mostly consist of LLLL.com domain names, and some keyword .ca names.
My underlying strategy to it all is to not invest too much into any given name.
I’ll put it to you this way…
If you buy a name for $500, hoping to flip it for $1,000, the best that can happen is that you get your price and make an easy $500. But the worst that can happen is, it doesn’t sell, and you’re out $500.
And I’ll tell you, you can buy an awful lot of domains with $500.
The only guarantee at that moment is that you’re out $500. There is nothing else that is certain at that particular point in time. Sure, you may sell it for more. But that doesn’t have to happen.
Whereas, if you buy a name for $20, your maximum liability is that $20, plus any renewal fees that might come up later on in your ownership of the name.
Don’t get me wrong. It is very much possible to buy a domain for $500, and then sell it for $5,000 or $10,000. Just remember, you have to convince someone to spend that kind of money in order for that to happen. Which is no easy task, while a $500 decision can be made (and does often get made) on the spot.
If I had to give some “guidelines” for a newbie to follow, here are six to stick to…
1. Google is your friend
As cool, useful, or commercially applicable as a name might sound, running a quick Google search for whatever phrase your domain name consists of can do wonders in telling you just how widely used the term is on Google.Check to see how many paid ads there are using those terms, in the sponsored section, and how many website addresses there are using similar words, in the links at the bottom of each search result.This, in my opinion, is the best way to “test the waters”. It gives you a sense as to whether the words in your domain name are being “talked about”.
2. Automated appraisals mean nothing
The value of a domain name is whatever somebody is willing to pay for it. Just because Estibot says it’s worth $5,000 doesn’t mean anything. It could be worth $10 to one buyer, or $10,000 to another buyer.Stock prices, for instance, have a definitive way to be valued, as they are calculated based on what people are actually buying and selling them for in the marketplace.Domain names being unique, on the other hand, don’t have a means to be valued this way.Just don’t forget, it’s your domain name, so that means it’s your price. If you’re not comfortable with a certain offer, you don’t have to take it.At the same time, just remember you have to sell the domain at some point, and when turning down an offer, you should always consider just how possible (if at all possible) it is to get a higher offer in the future (which may or may not come).
3. Ditto for emails offering you appraisals
Anybody who emails you offering you an appraisal is trying to scam you. Even if they’re talking about making you an offer. Don’t entertain it. Unless they’re offering you unconditional cash, it’s not a real offer. I’ve seen too many new domainers pay for an appraisal from someone claiming to be interested in buying the name. Don’t fall for it.
4. Don’t be afraid to field a phone call, be less afraid to make one
You might want to consider letting your domain names go to a webpage saying “this domain name is for sale”, and putting your name, email and phone number on there.
A lot of buyers are apprehensive towards using marketplace services such as Sedo or Buydomains, since they don’t know much about them.There’s a bit of a “comfort” factor there in terms of the buyer seeing a name and a phone number and having the option to call in and speak to a real person.
Many buyers will type in the domain they’re looking for to see if anybody is currently using it. If it’s your domain they want, and they see your number there, that’s their cue to call you. Be ready to pick up that phone.Also be ready to pick up that phone if you think a company could use your domain. Do not be afraid to make the cold calls. Just remember, the worst that can happen, is they tell you “no”. You’ve been told “no” before… right?
5. Always ask yourself, “would somebody actually pay money for this?”
Just like in point #1, a name may sound cool, nice, or really awesome. But don’t forget, you’re in this business to make money. Meaning, that once you’ve invested money, your goal is to get all of that money back, plus more, representing your profit.I know it might be easy to talk yourself into a domain on the illusion in the train of thought that “oh, I could sell this to someone for a profit!”. Being under that impression can easily sway you to buy the domain.But the end user is buying it for a different reason than you are. They want it so they can use it. They don’t have any aspiration to resell it for a profit. That being said, what’s in it for them? Ask that question to yourself as if you were in their shoes. It gives you the opportunity to think about your potential investment a little more critically.
6. Just DO it!
This is actually the one bit of advice I have a bit of difficulty following myself. Standing on the sidelines and watching everybody else do their thing might get you a little bit of insight, but it won’t make you any money.If you, by your gut instinct, think that buying a domain name could stand to make you a profit, and you can prove that to yourself, waiting around won’t do you any good.It’s better to invest a few bucks in a domain name today, and know you made an honest effort as you start to ignore the “renewal” emails a year later, than to keep those few dollars in your pocket and wish you did it.Investing of any kind involves taking risks, and domaining is no different.