Everybody has heard the stories of a few domains selling for over $1 million and some people getting in trouble for using the domain names of celebrities. For a recent example, there were several Janet Jackson domains registered a minute after her breast was exposed at the Super Bowl. Thus, a fair number of people outside of the industry feel that domains are either sleazy and a playground for cyber squatters or can make you rich overnight.  As a domain dealer for over a year, I have learned that neither of these perceptions are true. Yes, there are still cyber squatters and domains that sell for extremely large sums, but these are the exceptions not the rule.

If you want to start out in the domain industry, be prepared to make several mistakes when you first start. Very rarely if ever will you be able to register a domain for $8 to $35 and then sell it for $1000 or more the next day. Instead, you will more than likely register domains that nobody else really wants. I don’t know how many times I have seen people ask for appraisals of their domains on forums and be personally offended when a price like $25 is quoted. Some people have taken their anger so far as to blast the forums themselves at Alexa.com! These are the type of people who don’t “get” the domain industry and will usually not last. Did I get my feelings hurt by appraisals when I first started? You bet I did. However, it made me want to find better names that much more until I finally did.

The first thing that you need to do is learn more about the domain industry in general, minus the myths. Go to a major forum and just absorb as much info as you can BEFORE you buy your first name. Trust me, it will save you a lot of time and money. After that, develop a strategy and stick to it for a while.

Ask yourself questions like: Do I want to only go after expiring names? Do I only want to buy domains with traffic? Do I only want to register new domains? Do I only want to buy domains from other people on forums?

To help you answer yourself, here are a few things to remember about each strategy: Usually, expiring domains are the most valuable because they go straight from the hands of one owner to another the second the domain expires. Nobody has the chance to stumble across these domains and register them when they feel like it. Buying solely traffic names is also a sound strategy because you can just earn income from the domain without trying to find a buyer for it. Registering only new names, on the other hand, should really not be done by a newbie because that is a fast way to spend a lot of money and get nothing in return. You would be better off buying names you like from other people on forums at wholesale prices because you have a better chance of buying solid names. If one of these buying strategies is not working out, then try another one after a week or two.

While building your domain portfolio, put a few domains up to be appraised to help get your feet wet in accepting the opinions of others. Try to learn from any negative comments you receive. You will also more than likely get a few helpful tips. Use these tips as well to improve your buying skills. Eventually, you will start buying significantly better names.

Ask any person not involved in the domain name industry and has not spent much time on the Internet to list the various available domain extensions and very few will list anything besides .com. Now ask somebody who has spent time on the Internet to list all of the global extensions and see what they say. I bet a few people will still only list .com while most others won’t get past .org. For further proof of the pervasiveness of .com outside the domain name industry, just look at what happened when the famous “Internet Bubble” finally popped and the stock market crashed. What did you hear back then? Was the “Internet Bubble” also called the “.NET Bubble” or maybe the “.ORG Bubble”? No, this important period of the Internet was also referred to as the “.COM Bubble” (.BOMB in some places) countless times. Thus, anybody who listened to the news in that time period undoubtedly heard .com this and .com that. That’s not even mentioning the fact that a plethora of Internet companies like Amazon.com showed off their .com domains on various TV commercials.

A few years have passed since the height of Internet mania on Wall Street but the Internet continues to become more involved in our daily lives and .com still remains the undisputed champion of domain name extensions despite many more being introduced like .info, .biz, and .us. From a domainer’s point of view .com is king as well since the overwhelming majority of domain sales over $10,000 are .com domains. Although not as large a margin between other extensions in end-user sales, even premium sales between domainers are usually .coms. Furthermore, from a personal standpoint, my top five domain sales have all been .coms.

However, domain newbies and most seasoned domainers should not be completely reliant on .com. Why not? Without question, .coms should be a major portion of your domain portfolio but don’t forget that a great portion of  .coms are actually stinkers. For example, I would take a non .com domain like Jokes.org over a .com like eWebJokes.com all day long. To get the .coms that truly deserve a premium you will have to do one of three things:

1. Spend big bucks.
2. Be the first to backorder a name at a non-auction drop catcher like SnapNames.com or GoDaddy.
3. Buy it off somebody who doesn’t know what they have or just need a quick return.

Trying to manually register a premium .com is like trying to win the lottery. You chances are in the millions to one because people like myself spend enormous amounts of time trying to find hidden gems. I have sold a few .coms in the $xxx range that were manual regs and a few that I have developed as sites, but none are what you would call premium names. On the other hand, my best manually registered domain sale was from a .info in the mid $xxx range. In fact, I have more manually registered sales in the $xxx area from non .coms than I do from .coms. Why? Simply put, the names were better on the left side of the dot.

Having said all that, a good strategy for domainers without deep pockets would be to research expiring domains for opportunities to pick up a premium .com via a non-auction drop catcher while constantly looking for quality  available names beyond .com. For more info on the other extensions, stay tuned to DBKV.eu for more installments in this series.

Let’s say you that you have an idea for a great domain name. You go to either a registrar or a Whois site and you check to see if it’s available. Your hopes are somewhat crushed when you discover that the .com version of the name is taken. However, you notice that “the next best thing” is currently available, the .net. You think why not since you did want that name badly, so you go ahead and register it. Did you make a good move? If no other non .com extensions were taken when you registered this domain, then probably not.

How can buying the second most popular global extension be a bad move? Depending on what you plan to do with the domain, there are several reasons. For starters, .nets will probably always trail .coms (on the same names) in terms of type-ins because .com is the default extension in the major browsers and .com is just considerably more known than .nets. This severely hinders your ability to generate income from most .net domains.  Secondly, .nets do not resale well. Not only does .net under-sale .org among resellers on the major domain forums but even lower extensions like .info and .us usually out-sale .net as well. Lastly, let’s say that you develop your .net and spend a lot of time and money building it up. Guess what’s going to happen? Yes, the .com version of your name is going to benefit some from all your work and money because some visitors while type in the .com to find your site again.

Of course, the exception to the guidelines mentioned above is the ultra-premium name. This great name can be in the form of a major keyword or a 2 to 3 letter domain.  For example, a domain like Hosting.net or pic.net will still command very high premiums in the resale market. The previous guidelines mentioned are only for poor to above average domains.

These special cases aside, there are a few other reasons why you should largely avoid .net. Probably the most important of these is simply image. For instance, a domain sales site had better not use a .net because it will probably convey the message that the owner does not have quality names simply because the owner can not even get the best version of their own domain! Furthermore, unlike most other extensions that will be covered in this series, you have to take into consideration that .net has positioned itself as nothing but a .com wannabe. Do you see many domain names on TV using .net? No, but you see plenty of .coms and .orgs. Who wants to advertise a domain with a second rate extension? For more info on the extensions that do position themselves differently than .com, stay tuned to DBKV.eu for more installments in this series.

Although .com continues to dominate the domain landscape, .org has carved out itself a nice little niche. .Org has been able to establish this niche because it has a significantly better/cleaner image than .com due to its non-profit origins. These non-profit origins have translated into a great deal of TV time for this extension. I don’t know how many times that I have been watching TV and saw a commercial or program saying something.org. It has actually gotten to the point where I don’t know whether .org or .com gets more TV time these days.

What does that mean for domainers?  It means that domainers have a viable substitute for .com in certain areas. These areas do not have to be completely void of making a profit, but some industries simply DO NOT work well .org at all. These non-.org industries include:

• sex – remember that .org has a fairly clean image
• hosting – stick with .com or .net
• gambling – unless for addicts or along those lines
• money-related – anything overtly related to commerce or money

Besides just non-profit organizations, a few areas that DO work with .org include:

• free games
• reviews
• directories
• news or blogs
• general info about a particular subject

Now the question that you are probably asking yourself is how can you make money off .org if this extension is supposed to be non-profit. Like .com was originally intended just for commerce (where the ‘com’ comes from), .org is not used strictly for non-profit purposes anymore. There are no restrictions on what a .org can be used for and I have seen many .org sites selling products or making money from advertising. Keep in mind that .org being strictly non-profit is more image than anything else.

Furthermore, .org is one of the most sold extensions on domain forums. Speaking from personal experience as well, I have sold at least 5 times the number of .org domains that I have sold .net. In fact, I will usually pick a .org before a pick a .net if they are both available. As mentioned in the .net article, .net does not have a real identity. On the other hand, .org definitely does and domainers need to be aware of that.

Like everything else, domain speculation is a job for the born marketer. It’s easy to find good domains, once you invest a little time or money. It’s harder to get them off your hands. But if you want to try it, here’s a way to get started:

1) Scan Godaddy and see what’s selling. Then scan some of the Domain Name forums and do the same.

2) Seek out your own domains. Either comb some of the free services, or pay for an expired-domain service.

3) Evaluate the domain. Here are some things to look for:

– brevity: not too many letters, and preferably two or fewer words.
– dictionary words: ideally, the keywords in the domain should break down into recognizable dictionary words.
– good TLD: stick to .com if at all possible, or maybe consider.us.
– no ‘junk’ characters: avoid numbers; avoid hyphens. Avoid e- or i- or similar prefixes (eBigSplash, iLaunchNow) if possible. Avoid junk suffixes like “inc” if possible.
– singular v. plural: singular keywords are sometimes better. E.g., ApocalypseNow.com is better than ApocalypsesNow.com. Sometimes, though, the reverse is true: UsedCDs is better than UsedCD.
– if plural, standard is better: “z” won’t kill you, but “s” is better. That is, Stocks.com is much better than Stockz.com — although if you can find a decent one-word domain, grab it, even if it is pluralized with a z!

4) When you see a domain you like, do some research before you buy. Here’s what I look for:

Does the domain have any traffic or backlinks?
A domain that used to be active and popular is more valuable than an undeveloped domain. These domains tend to still bring traffic in, which you can leverage. Here’s how to peer into the dark depths of that traffic:

Go to Alexa and enter the domain. Alexa tries to tell you how many other (important) sites link to your domain. It also gives you a rough estimate of site importance. (This ranking is more accurate as site rank slips under 1 million). If the site was very popular, you might see a screenshot of the home page and actual traffic statistics.

Now that you’ve done that, scroll down and look for the “WayBack Machine“ link on the left. Click this link to see what your site looked like before the domain expired. Typically, your site will have stopped operating at least six months ago, but you can still tell what it looked like and sold. (This can give you a good idea of how to market your domain.)

Now, get a better idea of how many backlinks (other sites linking to yours) your domain enjoys: use the MarketLeap tool. Plug in your domain — forget the comparison URL fields — and MarketLeap will return a more accurate count of which sites link to yours, and which search engines know about them.

Now you have a good idea of traffic. Is there any? Good, then you can capitalize on it in at least two ways.
1) Find an affiliate program that closely matches your site’s old content. Build a quick site that pre-sells those affiliate products, or simply get an affiliate link and forward all your traffic directly to the merchant’s site.
Or,
2) Park your domain at a free clearinghouse offering good pay-per-click revenues. Sedo has performed best for me.

Now, let’s say there’s no traffic, or only a little, but the domain looks good. Do a little market research for obvious prospects before you buy. Here’s how to start:

1) Google. Break your domain down into keywords, then search on them. For example, if you’re looking at the domain name “MarketApp.com,” plug in “market app” and see what turns up. Any potential buyers?
2) Whois Source. Use this amazing, invaluable tool to see if anyone has a similar but less desirable version of your domain. If you’re selling NeoIndia.com, does someone have Neo-India.org? Just enter your keywords and try different permutations … with or without hyphens, for example.

Putting the Domain on the Market
If you’re ready to sell, jump to How to Sell a Domain Name.