A common wisdom in business circles is that profit is ensured if we buy right. That means acquiring assets at undervalued prices. This is a basic principle in everything from stocks (which you can buy hier) to used cars. It’s an especially common saying in real estate. It’s all about tracking the market trends, finding out what has the most potential, and investing at the right time. So how does this apply to the virtual real estate of domains? Well, domaining is a little different from other investments. How? They’re more speculative. Drew Rosener once said on Domain Sherpa: ‘most of the domains we own, won’t sell in our lifetime.’ In this instance Drew was referring to end users sales but you get the point.
Do Your Due Dilly
If we want to be profitable (and we do) then due diligence is not an option. It’s a necessity. While waiting for an end user sale, if we need cash or we get tired of renewals, we need to be able to sell our domains on the aftermarket for a small profit or at least break even. That means we have to buy smart.
The challenge is determining the value of a brandable domain before we buy it. Brandables are notoriously subjective. So how do we get objective data on brandables to make a reasonable valuation? Well checking NameBio for prior sales is one common method. But 95% of my brandable purchases are under $100 so I need a work around. I need ways to gather objective information and see whether or not it substantiates my subjective evaluation of a domain.
Google It — This is so obvious but you’d be surprised how many people don’t check their names on Google. I get all sorts of info there about searches, prior company usage and current popularity. I also check the ‘images‘ option at the top of the Google search page to see how people are applying the term to pictures, products, services and pop culture in general.
WhoIs – I check Domain Tools to find out the domain’s age, the number of times it’s been dropped, if there’s ever been a website on it, who’s selling it or letting it expire and if it’s regged in other TLDs.
CrunchBase – If it’s a keyword domain I search CrunchBase or AngelList to see how often and in what way the keyword(s) has been used by existing startups. I also check my keywords on BrandBucket since they are the industry leaders in the brandable space and stay current on brandable trends.
Estibot – A lot of people are down on Estibot valuations but that is only because they have a misguided expectation. Estibot was never intended to predict an exact market value or sale price. No software can do that. What they can do is give a data based, ballpark figure of a domain’s potential value. In my opinion it’s very useful data and a good indicator despite its lack of accuracy.
There is a lot more to say on this topic so I’ll expand on these points in future blogs. Meanwhile, at least you’ve got some insights into my process and the everyday items in my brandable toolbox. I hope they help you to develop your own methods and style for ensuring profits by making your money on the buy.
Some nice names that sold this past week as reported by NameBio:
- BioMind.com $913
- BrandFair.com $560
- FileGiant.com $78
- Hygenics.com $627
- Jaxos.com $100
- MediaJug.com $90
- OrganicStar.com $455
- Orivo.com $109
- ThirstyCamel.com $660
- UrbanCrew.com $202
- WhiteMonkey.com $721
Some interesting domains in the GoDaddy Closeouts as of May 21st:
Thanks for reading! I look forward to your comments and feedback below.