One of the things that’s exciting to me about domain names is there are so many ways to profit. There are also some ways to lose money. I don’t want you to be like the guy yesterday who auctioned off his portfolio of 383 names for $40.99. That’s about 10 cents a name on his investment that was originally about $3,800 (depending upon the registrar he was using).

So what do I mean by plan B? Whenever you are looking to buy a domain name you need to purchase with the end in mind. Buying is the easy part – you just click your button on the shopping cart. Now that you have it what are you going to do with it?

Whenever I’m considering a domain name I like to consider what I’m going to do with it – am I going to auction it? Is it an orphan? Am I going to develop it? I like to have two or three strong options. I chose the one that offers the most profit potential and see it which one meets the timeframe I want – quick profit or longer term revenue. That way if the first one falls through I go to Plan B.

Let me give you an example. Here’s the 20 second explanation of the orphan method of domaining. Basically what it means is you buy a .com domain and then offer it to the .net owner for a profit. You may have all of the reasons why .the net owner should buy – .com is a stronger extension, it might be getting existing traffic, easy low cost way to boost their business, etc. It might make all complete sense to you. But remember the business owner might not be internet savvy and it just might not make sense to the .net owner. I was trying to sell an orphan domain to a business owner of the .net name. Even though the .com equivalent of the name was both DMZ and yahoo listed, had traffic, etc. the .net owner wasn’t interested in any price.

But at the price and with the statistics it was a bargain I just couldn’t pass up. The orphan strategy didn’t work so I went to plan B. The first thing I did was go to Google and search on the domain name. Remember with the Internet the world is your oyster. So a business owner with this exact name, in this particular town in California wasn’t interested in purchasing. So what! I didn’t waste any tears. A Google search showed thousands of businesses around the country with the same exact name. Hear a no? Just think next! Go to the next one in line or to Plan B.

Be open to possibilities. One of the things I did a while back was to flip cars – buy used cars and resell them for a profit at auctions. (If you know what you are doing its a good way of making a signifcant income.) When people have to sell their car they often need cash bad and they need it NOW. So one of the names I picked up was www.carcashfast.com. My original idea was just to sell it at auction. But when I mentioned it to the partner I had on some of the past car flips he flipped. Knowing the business, he knew the potential and what he proposed is that we become partners. I handle the web and marketing and he handles examining the cars, and setting with the auctions. Perfect fit. I’m already doing that so web and marketing won’t be a problem for me and I’l certainly get a lot more as a parner in a business than I would by parking or other types of monitization.

So remember when you are considering a domain name start with the end in mind. What am I going to do with it if I get it? – how am I going to turn it into a profit? Have a couple of alternate plans so if one doesn’t work out you can go to plan B. Make sure you have a viable plan B before you start. In the orphan domain example I gave above I checked and found out first that there were many other businesses with exactly the same name that might be interested. But remember to stay away from trademarked names or known company brands. You don’t want any legal complications – and besides their pockets are probably a lot deeper than yours. Well that’s it for now. Let me know what you would like to hear more about. My next post is going to be “How to know if you are going in the right direction!”

In the meantime, for some practice go to HotDotAuctions.com Go through the list of names imagining that you were going to purchase a few. For each one come up with a plan A for turning a profit, a Plan B, and maybe even a plan C. How realistic are each of those plans? Do you believe that each one of you alternatives could be successful? If you are confident you have several strong plans for monitization and you’ve done the research to show you the value then this might be a domain you can turn a profit on. But for now we are just practicing. I want you to make sure you are going in the right direction. I don’t want you to end up like the other guy with a portfolio of 383 names no one wants. (Well someone wanted them for ten cents a name) That’s it until the next post tomorrow. Happy Domain Hunting.

All the best,
Ted Sudol
PS Don’t forget to practice and just in case you are in a rush here’s a few auction names for you to practice with.

Maniac.US - [Keyword .US Domain Name] US $15.51 (13 Bids) End Date: Monday Sep-06-2010 2:57:28 PDT Add to watch list

GrillPlan.com - Domain Name - Rare - NR US $4.25 (6 Bids) End Date: Monday Sep-06-2010 2:58:31 PDT Add to watch list

MROBNOXIOUS.COM Premium Domain Name US $5.74 (3 Bids) End Date: Monday Sep-06-2010 3:32:53 PDT Add to watch list

HomestyleDinners.com - Excellent Domain Name - NR US $3.25 (4 Bids) End Date: Monday Sep-06-2010 8:42:08 PDT Add to watch list

WEBGNAT COM NET ORG Domain Name Series VirtualK9 US $3.32 (5 Bids) End Date: Monday Sep-06-2010 8:42:12 PDT Add to watch list

CameraFinds.com - Excellent Domain Name - NR US $3.58 (3 Bids) End Date: Monday Sep-06-2010 8:59:15 PDT Add to watch list

TvFreebies.com - Excellent Domain Name - NR US $3.25 (3 Bids) End Date: Monday Sep-06-2010 9:00:39 PDT Add to watch list

ForexMarketGuides.com - Excellent Domain Name - NR US $3.25 (3 Bids) End Date: Monday Sep-06-2010 9:03:59 PDT Add to watch list

GetFirstPlace .com Internet Website DOMAIN NAME - SEO US $5.50 (5 Bids) End Date: Monday Sep-06-2010 10:31:30 PDT Add to watch list

YPVP.com 4-Letter LLLL PvP Domain Name RPG LLLL.com US $10.00 (6 Bids) End Date: Monday Sep-06-2010 13:24:27 PDT Add to watch list

HHLJ.com 4-Letter LLLL com Short Domain Name LLLL.com US $10.50 (6 Bids) End Date: Monday Sep-06-2010 13:26:53 PDT Add to watch list

0FY.com 3 Character CCC.com Domain Name (Zero) llll.com US $149.50 (6 Bids) End Date: Monday Sep-06-2010 13:30:15 PDT Add to watch list

YBMY.com Rare Brandable LLLL.com Domain Name WNR US $10.50 (5 Bids) End Date: Monday Sep-06-2010 14:31:57 PDT Add to watch list

Zavna.com - Brandable Website DOMAIN NAME For Sale NR! US $20.50 (4 Bids) End Date: Monday Sep-06-2010 15:00:24 PDT Add to watch list

EatOnly.com - COOL Cooking/Dining Domain Name For Sale US $10.50 (10 Bids) End Date: Monday Sep-06-2010 16:31:08 PDT Add to watch list

InsertCode.com - NIFTY Programming Website Domain Name US $19.50 (13 Bids) End Date: Monday Sep-06-2010 16:35:28 PDT Add to watch list

Mubug.com 5 Letter Premium Domain Name 4,3 US $5.00 (6 Bids) End Date: Monday Sep-06-2010 17:50:51 PDT Add to watch list

QWWE.com LLLL 3 Premium 4 Letter Domain Name, Augt 2011 US $30.00 (12 Bids) End Date: Monday Sep-06-2010 19:12:59 PDT Add to watch list

Established 'GOLF TIPS' Website & Domain Name For Sale US $15.50 (4 Bids) End Date: Monday Sep-06-2010 19:15:40 PDT Add to watch list

'INTERNET MARKETING' Website & Domain Name For Sale US $20.50 (5 Bids) End Date: Monday Sep-06-2010 19:27:10 PDT Add to watch list

There’s a lot of confusion about domain name valuation. Some domainers believe it all depends upon traffic, some domainers believe it all depends upon revenue, some domainers believe brandabilty is the key, others believe its the commercial potential.

In the end the definition of selling price remains the same whether it’s real estate or domain names. The selling price is the price at which a willing seller is willing to sell the name and a willing buyer is willing to buy it.

Software tools or web sites that try to give a valuation only give a very, very rough indication of what the value is. There are many examples of domains given very low valuations by automated valuation tools that sold for hundreds of thousands of dollars and those that were valued for such high amounts that the owner thought he had a lottery ticket when he priced it to sell. The only problem is no one else agreed and he’s still holding on to it. If you really want to get a good idea of domain name values look at some of the auctions – or rather look at some of the completed auctions and see what the names sold for (not what people were asking) The market will give you a better indication of value than an automated valuation tool.

Remember that willing buyer? Well its your task, if you are looking to sell that domain name, to find that willing buyer. It might be easy. You just put it up on an auction and people flock to bid on it. Or it might involve a little more. Look around – who might be interested in that domain name? Then contact them and see if they are interested. Make sure if you are sending out an email you follow all of the CAN-SPAM regulations like including your contact information so you can’t be accused of spamming people. Approach in an open and friendly manner, be open to negotiation and don’t set such a high price that you turn people off immediately. A good first step is to see if there is interest and then as the conversation proceeds introduce and negotiate price. Above all if they have said no stop calling or emailing and go to plan B. You do have a plan B don’t you? That will the the subject of another post. I’ve sold domains this way, rented domains, and developed some into business partnerships.

Start out by visiting some of the domain auctions like the ones you can find at HotDotAuctions.com Get a sense of what the market is willing to pay for domain names. It will give you an idea of what domain names sell and what don’t and guide you in the type of names you purchase. I’ll also include a sampling of some ebay auctions following this post. Happy hunting.

All the best,
Ted Sudol
TheDomainHunter

Maniac.US - [Keyword .US Domain Name] US $15.51 (13 Bids) End Date: Monday Sep-06-2010 2:57:28 PDT Add to watch list

GrillPlan.com - Domain Name - Rare - NR US $4.25 (6 Bids) End Date: Monday Sep-06-2010 2:58:31 PDT Add to watch list

MROBNOXIOUS.COM Premium Domain Name US $5.74 (3 Bids) End Date: Monday Sep-06-2010 3:32:53 PDT Add to watch list

HomestyleDinners.com - Excellent Domain Name - NR US $3.25 (4 Bids) End Date: Monday Sep-06-2010 8:42:08 PDT Add to watch list

WEBGNAT COM NET ORG Domain Name Series VirtualK9 US $3.32 (5 Bids) End Date: Monday Sep-06-2010 8:42:12 PDT Add to watch list

CameraFinds.com - Excellent Domain Name - NR US $3.58 (3 Bids) End Date: Monday Sep-06-2010 8:59:15 PDT Add to watch list

TvFreebies.com - Excellent Domain Name - NR US $3.25 (3 Bids) End Date: Monday Sep-06-2010 9:00:39 PDT Add to watch list

ForexMarketGuides.com - Excellent Domain Name - NR US $3.25 (3 Bids) End Date: Monday Sep-06-2010 9:03:59 PDT Add to watch list

GetFirstPlace .com Internet Website DOMAIN NAME - SEO US $5.50 (5 Bids) End Date: Monday Sep-06-2010 10:31:30 PDT Add to watch list

YPVP.com 4-Letter LLLL PvP Domain Name RPG LLLL.com US $10.00 (6 Bids) End Date: Monday Sep-06-2010 13:24:27 PDT Add to watch list

HHLJ.com 4-Letter LLLL com Short Domain Name LLLL.com US $10.50 (6 Bids) End Date: Monday Sep-06-2010 13:26:53 PDT Add to watch list

0FY.com 3 Character CCC.com Domain Name (Zero) llll.com US $149.50 (6 Bids) End Date: Monday Sep-06-2010 13:30:15 PDT Add to watch list

YBMY.com Rare Brandable LLLL.com Domain Name WNR US $10.50 (5 Bids) End Date: Monday Sep-06-2010 14:31:57 PDT Add to watch list

Zavna.com - Brandable Website DOMAIN NAME For Sale NR! US $20.50 (4 Bids) End Date: Monday Sep-06-2010 15:00:24 PDT Add to watch list

EatOnly.com - COOL Cooking/Dining Domain Name For Sale US $10.50 (10 Bids) End Date: Monday Sep-06-2010 16:31:08 PDT Add to watch list

InsertCode.com - NIFTY Programming Website Domain Name US $19.50 (13 Bids) End Date: Monday Sep-06-2010 16:35:28 PDT Add to watch list

Mubug.com 5 Letter Premium Domain Name 4,3 US $5.00 (6 Bids) End Date: Monday Sep-06-2010 17:50:51 PDT Add to watch list

QWWE.com LLLL 3 Premium 4 Letter Domain Name, Augt 2011 US $30.00 (12 Bids) End Date: Monday Sep-06-2010 19:12:59 PDT Add to watch list

Established 'GOLF TIPS' Website & Domain Name For Sale US $15.50 (4 Bids) End Date: Monday Sep-06-2010 19:15:40 PDT Add to watch list

'INTERNET MARKETING' Website & Domain Name For Sale US $20.50 (5 Bids) End Date: Monday Sep-06-2010 19:27:10 PDT Add to watch list

2008 promises to be a great year for domainers. It’s only the second month of the year and we’ve had a domain sale for 1.7 million Dollars. In case you want to discount that as a one in a million shot the T.R.A.F.F.I.C silent domain auction that just closed sold roughly 270 domains for about $475,000.00. Although these figures were a little lower than October’s auction it still points to a strong and growing market.

The reason I brought up the 1.7 million dollar sale is not because of the size but because of some of the thought, evaluation, and reasons for its high valuation that you could use in your own search for domain gold. The name, DataRecovery.com was owned by Associated Computers and purchased by a competitor, ESS Data Recovery, whose website was e-s-s-data-recovery.

Why were they willing to pay this much for this name? Well this is a targeted, generic domain name that generates targeted direct traffic. The company use to spend $10,000-$12,000 per month on pay per click advertising. Even at todays conversion rate it was hard for them to get a good return. There are some in the domain world who are speculating that conversion rates will be lower in the future.

If you look at what it would take to be in postions 1-3 for the term “data recovery” you would need to pay $13.83-$20.74 per click which would result in a total cost of approximately $3,800-$7,200 per day! It just makes sense to be in the natural stream of people looking for “DataRecovery.” Its also a heck of a lot easier for their clients to remember than their old website name and a lot stronger platform to build brand recognition on.

So what does this mean for you and your profitable domain career? You can roughly divide the domainer world into two camps. Those who believe that the metrics like traffic, links, age, page rank determine the value of a domain. They feel domains names without these potentially revenue generatings statistics are worthless. The other half of the domain world believes that it is the short, catchy, keyword rich domain that is easily recognizable, has great branding potential, and great commerial potential that has value. They believe the “stats” guys are just chasing shadows.

And you know what? They are both right. There are advantages and dangers to each approach and I’ll go into that in my next post. But the great thing about it is that both groups are making money! The silent auction list of domain sales goes on for nine pages and it has example after example of domains that sold on the basis of their traffic and example after example of domains that sold and had no traffic or stats but had a great name that someone felt had great potential.

Make sure you signed up for your free account at Premiumdrops so you can start to get to know some of those statistics, what they mean, and how they help determine value.

You might want to also take a look at some of the current auctions to see what the various names are bringing. Make sure you read my post on auction tools if you are going to dip your toes in the auction waters so you have the best chance of winning at a great price. We don’t want you overbidding. To make going through the ebay auctions easier I actually put together hotdotauctions.com which features some of the best ebay auctions for myself. I applied some filters so it would only show me what I considered the best auctions so go to HotDotAuctions.com. However I’ll also have a sampling of ebay domain auctions immediately below this post.

All the best,
Ted Sudol
TheDomainHunter.com

Maniac.US - [Keyword .US Domain Name] US $15.51 (13 Bids) End Date: Monday Sep-06-2010 2:57:28 PDT Add to watch list

GrillPlan.com - Domain Name - Rare - NR US $4.25 (6 Bids) End Date: Monday Sep-06-2010 2:58:31 PDT Add to watch list

MROBNOXIOUS.COM Premium Domain Name US $5.74 (3 Bids) End Date: Monday Sep-06-2010 3:32:53 PDT Add to watch list

HomestyleDinners.com - Excellent Domain Name - NR US $3.25 (4 Bids) End Date: Monday Sep-06-2010 8:42:08 PDT Add to watch list

WEBGNAT COM NET ORG Domain Name Series VirtualK9 US $3.32 (5 Bids) End Date: Monday Sep-06-2010 8:42:12 PDT Add to watch list

CameraFinds.com - Excellent Domain Name - NR US $3.58 (3 Bids) End Date: Monday Sep-06-2010 8:59:15 PDT Add to watch list

TvFreebies.com - Excellent Domain Name - NR US $3.25 (3 Bids) End Date: Monday Sep-06-2010 9:00:39 PDT Add to watch list

ForexMarketGuides.com - Excellent Domain Name - NR US $3.25 (3 Bids) End Date: Monday Sep-06-2010 9:03:59 PDT Add to watch list

GetFirstPlace .com Internet Website DOMAIN NAME - SEO US $5.50 (5 Bids) End Date: Monday Sep-06-2010 10:31:30 PDT Add to watch list

YPVP.com 4-Letter LLLL PvP Domain Name RPG LLLL.com US $10.00 (6 Bids) End Date: Monday Sep-06-2010 13:24:27 PDT Add to watch list

HHLJ.com 4-Letter LLLL com Short Domain Name LLLL.com US $10.50 (6 Bids) End Date: Monday Sep-06-2010 13:26:53 PDT Add to watch list

0FY.com 3 Character CCC.com Domain Name (Zero) llll.com US $149.50 (6 Bids) End Date: Monday Sep-06-2010 13:30:15 PDT Add to watch list

YBMY.com Rare Brandable LLLL.com Domain Name WNR US $10.50 (5 Bids) End Date: Monday Sep-06-2010 14:31:57 PDT Add to watch list

Zavna.com - Brandable Website DOMAIN NAME For Sale NR! US $20.50 (4 Bids) End Date: Monday Sep-06-2010 15:00:24 PDT Add to watch list

EatOnly.com - COOL Cooking/Dining Domain Name For Sale US $10.50 (10 Bids) End Date: Monday Sep-06-2010 16:31:08 PDT Add to watch list

InsertCode.com - NIFTY Programming Website Domain Name US $19.50 (13 Bids) End Date: Monday Sep-06-2010 16:35:28 PDT Add to watch list

Mubug.com 5 Letter Premium Domain Name 4,3 US $5.00 (6 Bids) End Date: Monday Sep-06-2010 17:50:51 PDT Add to watch list

QWWE.com LLLL 3 Premium 4 Letter Domain Name, Augt 2011 US $30.00 (12 Bids) End Date: Monday Sep-06-2010 19:12:59 PDT Add to watch list

Established 'GOLF TIPS' Website & Domain Name For Sale US $15.50 (4 Bids) End Date: Monday Sep-06-2010 19:15:40 PDT Add to watch list

'INTERNET MARKETING' Website & Domain Name For Sale US $20.50 (5 Bids) End Date: Monday Sep-06-2010 19:27:10 PDT Add to watch list