sashas

I've been away from active buying for quite some time now. I've been busy learning development and trying to make money off my "dead" domains.

Having developed some domains and taken them to $10/day from $0/year, I can say that I have gathered some knowledge about domains, and development.

A good domain name is a gem of a thing to have when you start off development.

But honestly, the domains that I've seen being sold here, and the prices people are asking for them are absolutely ridiculous. Thread after thread have no bids, with prices falling from $1000 to $100 within a span of two days until a final, desperate call for "$50 BIN, last price! Hurry!" sinks the thread. It's clear to me that domains, particularly at the ridiculous prices people are asking for them in the forums, aren't selling.

These prices are not even end user prices. They are beyond end user prices.

I'm not talking of highly brandable, or mega-keyword domains that can be developed into massive web properties, or can attract xxx,xxx monthly traffic. I'm talking of 3-4 word domains in micro niches that won't get more than 500 visitors a month even if you managed to get it ranked no.1 on Google. These 500 visitors would probably make me $5-10/month. If I have to pay $600 for a domain like that, it would take me 5 years to make a return on my investment. Even if that was a viable business choice (it isn't), domainers tend to forget that sites in most micro niches don't stay on top of Google for even 1 year, let alone 5.

I think every domainer ought to try his hand at development to really understand the value of domain names. Thread after thread resulting in no sales should have been enough of a wake up call, but it seems to me that not enough people are really listening.

Oh and one more thing. Although I've been guilty of doing it too, the practice of saying "xxx,xxx" Google results is downright stupid. Simply put, the more results a domain has in Google, the higher the competition. What would make a domain more attractive to me would be LOW Google results, not high, because it is damn easy to rank when you have 5000 competing pages as compared to 500,000

So sellers, before you sell a domain and beam with pride that your little pet has 1 million Google results (with quotes!), maybe try and understand that higher Google results is actually a deterrent. High numbers in the Google Adwords tool are certainly very, very attractive, but search results aren't. The ideal domain is one that has high searches per month as per the Adwords tool, but low competing pages in Google.

stub

So Sashas, what can you tell us about turning our dead domains to $10/day. What have you learned which we can emulate? This is a serious, not tongue in cheek question

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sashas

Just a few tips:

1. Pick low competition, high CPC keywords with at least 3000 EXACT searches per month (not Broad or Phrase) in the Google Adwords Keyword tool.
2. If you use Wordpress, use pages instead of posts (i.e., make the site static, not blog style).
3. Write at least 10 articles related to the keyword(s). Submit to EzineArticles, GoArticles, ArticleBase, and if possible, to ArticleSnatch, SearchWarp, ArticleAlley and ArticleDashboard. Make EzineArticles your top priority and submit your best work there first.
4. Create linkwheels for link juice.
5. Get multiple hosting accounts (or hosting accounts with multiple class-C IPs) and use your own PR domains for link juice. Don't make your site interlinking very obvious.
6. Always use a Whois guard if you do interlink your sites.
7. Bookmark, submit RSS feeds, create videos if possible, etc. All depends on the kind of niche you are in.
8. Experiment with themes until you get a 10-20% CTR.

Having the keyword your are pursuing in the domain itself can be a huge bonus, particularly if the domain is somewhat old or has some PR.

Steven

Thank you for the post in regards to tips for the development.

Development is the key.
However, some of us don't have the time to develop and constantly update.

How do you manage to get a good conversation rate for "decent" traffic /month?

Domainer

garptrader

As Sashas states, a phrase with high-search volume can still have difficulty getting traffic if there are millions of Google results for that phrase. If your site isn't on the first two pages of Google for some search phrase, where is your traffic going to come from? (personal example of mine WeightTraining.tv) Well, you can do massive link building but that doesn't happen overnight. On the other hand in September someone bought a very brandable domain from me for $799 but the search volume for that exact phrase is practically zero.

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InsanerDomainer

It's an extremely illiquid market. It's not like used cars where there are only thousands on the market in a given area. There are millions of domains for sale in a global market, and each of them are unique. So it's hard to find a buyer. I think that is the main problem, assuming you have good domains for sale. And then compound that with the fact that most domains are worthless. It's as if the biggest used car lot in the galaxy was overwhelmed with cars that are missing drivetrains, and it's completely up to the buyer to inspect each one before he can even think about buying.

I'm basically agreeing with you, in my roundabout way. And I like the advice.

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evirtual1

I feel every domainer should at least have one site, even if its just a blog

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ThreeD

That proves you've taken the step from domainer to dev The average domainer likes big numbers and most of them don't realize when these numbers work against them. The google "search results" is a great example of that. (Note, we're not talking google exact keyword search results using the adsense keyword tool!)

If you're serious about making good money in the domain industry today (that goes for 90% of the people in the business) it should be all about developing sites. Why? Because all the top domains are long gone. I should probably mention that "good money" is not a $5 flip. Good money comes with sites that have good ranking + PR, keyword rich content, a solid # of backlinks etc.

Anyways, that's just my two cents. Been around for more than just a while myself and I've seen the changes that have taken place over the years.

Great post sashas, rep added!

► * Losers make excuses - winners make it happen *

mwzd

Having come into domaining from the other side of the divide, development, I'll offer a counterview, even though in essence what sashas has said is absolutely correct.

Not everyone can develop or is willing to learn. Though domaining as we see on the boards is probably not the best way to earn a decent revenue from domains, it allows a lot of smaller players a method to make a decent return from their investments which will far outstrip any other method they might know.

Also, even w/ development and substantial content, its not easy for people to even make $10/mo from a website, let alone $10/day - I know how tough that is and how much time it does take to reach the $10/day figure. Specially when adsense pays differential commissions to people from different locations. What might earn you 25c / click, might only earn me 1c for the same click. Sucks, but thats the way it is.

tristanperry

What sashas is referring to is just micro niche development. It's nothing new. It's getting more popular over at places like WarriorForum.com though. It's basically developing a mini-site around a bunch of low-competition keywords. Then having a good template which gives pretty good (low-mid xx%) AdSense CTRs. It's basically "mini-site development" as domainers know it... but with good keyword research before picking the domain since it's the keyword which matters, not the content or mini-site design. Traffic (which comes from the SEs which is based on a good keyword) is what's important.

Anywhoo, I know what you are saying and I agree with you in that micro niche development is a very good way to generate low $x per day revenue (per site) with a relatively small amount of work. Not all sites (even ones with good, solid keyword research) make low $x per day revenue though. But the idea is a good one for sure.

But remember that not everyone can develop, plus you seem to be saying that there's no profit in domaining.

Whilst I'm a good developer and am also into micro niche development, my biggest ROIs have still been from domaining.

There's still plently of money to be made from domaining. Just not as easily via hand regges.

That's why there's more rich domainers than rich micro niche marketers. I think that domaining is still easier to make a good ROI, but certainly micro niche development is a little easier to get into.

It's all about what works for individual people though. For some, domaining is best for them. For others, development is the way to do.

Domainers certainly aren't "delusional", though - such a statement seems silly since, as above, it's easier to make great profit with domaining.

To quantify this statement. My biggest domaining ROI was 650% in 3 weeks (crudely extrapolating that'd be over 11,000% ROI in a year; obviously I couldn't do that every 3 weeks, though!)

With micro niche development, my biggest ROI is a hand-regged .com which now gets me an average of £0.75 per day - which would be 5,375% ROI in a year.

Assuming my maths is correct there, I've still been able to make bigger profits from domaining. So I do think that your post is a little anti-domainer, but I do agree that MND has potential.



---------- Post added at 10:27 AM ---------- Previous post was at 10:09 AM ----------

It isn't that easy.

Micro niche marketing starts with researching for good, solid keywords.

This is the most important step.

You need to choose a good 2-4 word keyword domain. That keyword should be getting between (lets say) 3k to 8k exact monthly searches (which can be checked via Google Keywords Tool) AND have low competition - meaning when you search Google for the keyword, it should be easy to get towards the top of Google.

Obviously a keyword domain which has:

1) A low amount of searches

and/or

3) High competition

Wouldn't be worth it since the traffic potential just wouldn't be there.

Micro niche development starts with the right keyword and domain.

I'd say the person who bought micro niche development into the mainstream is a guy from WarriorForum.com called John or 'xFactor':

6 Months Later: $300 Daily w/Adsense (Lessons Learned)

Mods, apologies if that link isn't allowed. Please edit it out and allow members to PM me for the link instead

MicroGuy

Being delusional is a gift.

It beats the pants off being sane and realistic. Some of the happiest, most successful people in the World are delusional, take David Letterman for example. He's totally insane yet able to show up for work each and every day and make big $$$$.

Now who wants to buy vegasrooms.us. Taking offers in the low $xx,xxx range. Lol.

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Billy!

You just never know, someone could bite, I have sold some high priced names here before at prices that may look to much to most domainers, but a good price to others.

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kev

Ive recently got into development - mainly e-commerce. Selling sport clothing/fashion brands. One sale a day makes double the revenue that Id make on a $10 a day adsense site. Plus its a lot more fun receiving products and sending them out to your customers.

Just something else to consider

InsanerDomainer

Good point. You can't make big bucks doing things "the right way", because then you're just doing the same thing everybody else is doing.

But I think there's a lot of wisdom on this forum. I just cherry pick the bits that make sense or the bits that seem like MAD GENIUS.

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Ross

Yes i agree that saying that as a selling point is stupid and anyone that knows domains will just brush it away with a nasty look on their face. Although one thing that signifies a niche is the search results. Obviously a keyword that produces millions of google results might be a crowded one but it obviously generates quite a bit of money, why else would there be so many pages? This is one of the first things you learn in affiliate marketing, keyword research.

So if you can secure a keyword domain in that "big" niche then it would be pretty easy to dominate the searches based on your site building techniques and explanation of how you build your sites. Take Candy.com for example. Yes they are not on page one of the results yet and i know they are a business and not just a domain name but they are proving that a GREAT domain helps. They are on page 2 by the way and their site was created this year.

So depending on what you are doing with the domain name is obviously going to correlate to how much you pay for the domain name. Obviously the people promoting the "crap" around here are overpricing their domains way over value but it really comes down to, you never know what people are going to pay. I sold a package of niche "resort" 2-3 word domains for a hefty price through this forum. The domains were horrible in my opinion but the new owner developed them right away and is now gaining quite a bit of traffic through that network.

akcampbell

There is alot of truth in what Sashas says. However, offering your domain at a high price and then cutting it is a logical way to sell. If you asked a group of enthusiasts to value a domain you would get a bell curve distribution of values. Therefore is doesn't necessarily make sense to offer it at the price most people would come up with, you should offer it at the price only one person is willing to pay. A good way of finding that price is to start high and work down. That's no delusional, it's just a selling strategy.

One good example of that strategy in action on NamePros was when one of the biggest .pro domainers, Vincent Liao, sold off his .pro collection. He started the sale thread at $8,000 each and dropped the price gradually. I paid $3,000 for Studio.pro, that's far more than anybody on NP would have paid pay but I wanted the domain and was willing to pay that rather than risk losing it. Vincent cut the prices several times more to $800 at which point I bought Diamond.pro. The domains didn't start selling fast until the price fell to $300. If Vincent had started the sale at $300 each, it would have cost him money, so it was better to start at $8,000 and cut the price.

Also, on the topic of returns, if you buy a domain for $600 and make $120 per year that's a 20% return on your capital which is relatively high. The present value of the $120 cash inflow per year into perpetuity is $2,400 assuming a 5% discount rate and less the $600 initial outlay gives a net present value of $1,800. That means that over time you are tripling your investment and that's assuming a discount factor over and above the current level of inflation and real falls in the cash inflow of $120 because it's becoming less and less valuable over time. I understand that there is some work to be done to make the $120 per year but if you buy a property, you might have to renovate it before renting it out at yield of 7%-8%.

The underlying dynamic of domaining is illiquidity and a very wide distribution of valuation opinion. Hence delusional pricing, at least at the outset, is a logical selling strategy. You may need to hold 100 domains to sell 1 per year, so you have to sell that 1 at an end user price or above otherwise you won't cover your reg fees. That's the pressure domainers are under, they don't necessarily value their domains at a price a minisite developer can get their full investment back on in 2-3 years.

Total.proJanuary 2013 registry stats added 12 May 2013.

Jaco

"Domainers" are indeed hilariously delusional. That's a large part of the reason I rarely transact with small-fry "domainers" anymore, save for the one-off purchase of something I need.

When I buy a domain, I predicate my entire decision on one of three things.

1) Earnings Potential
2) Earnings Potential
3) Earnings Potential

Assessing forward earnings potential calls on a confluence of skill that, I'm convinced, cannot be 'taught' and it goes WAAAAAAAAAAAAAAAAAAAAAAAAAAAAY beyond looking at search volume, competition and cpc. I don't give away any secrets and most people I know who succeed at this don't either, but safe to say, there's a whole lot more hashing out the underlying value of a name platform it than whatever volume and cpc is extant in the relevant keywords.

Excluding domains which are outright garbage, there is another category of lucid, desirable domains which I've come to term as 'hubris domains'. These are domains which have very little commercial viability or earnings potential, but are "impressive" in that they come straight from the old days when you could register names like Giraffes.com or any given LLL.com. Domainers transact in these domains almost as collectibles, in spite of the fact that they have very little value to business and commerce- business and commerce being the arena that puts money in your pocket. A hubris domain might cost 10X or 20X more than a name that has 10X superior earning potential...

As an aside, you people should feel blessed that Sashas made this post and was kind enough to actually follow it up with completely accurate advice for the strategy he's employing. Everything he said is 100% correct and the strategy he follows is one of the few left where "anyone can profit" , even in a cratering PPC world.

wussadotcom

Was this proved? Or maybe from experience? Thanks

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tristanperry

Domains, without fresh backlinks, will tend to fall down the rankings yes.

Of course, it can need as little as one new backlink per week (or fortnight, etc) to keep at the top (depending on the keyword, of course)

bmugford

Many domainers are delusional, I will agree with that. However I know plenty that are very skilled. The big money in domains is end users.

Flipping domains to other domainers is not the best business model.

Brad

DataCube.com - Buy and Sell Premium Domains

Jaco

Agree 100%.

I recently (in the last 48 hours) sold two domains- that were cued for deletion- to end-users, one for high three figures (originally slated for low four figures, but that changed) another for low four figures... and my involvement with domain ownership isn't as "flipper" or reseller. Most all of the names I own are platforms for development- yet on the rare occasion when I do flip or resell, my conversion rate is extremely high, simply because I'm 1) selling meaningful names 2) pricing them reasonably 3) know how to go about locating the best end-users.

Disregarding those who are incapable of determining what constitutes a salable name to begin with (about 90% of "domainers") a large part of the 'domainers delusion' that precludes successful end-user sales is pricing. Even when they do get a decent name and locate hot end-users, they always believe that the name should sell for four figures or more. The fastest way to turn off a prospective end-user is quote them an idiotic price, yet that practice has become the absolute, in-stone standard for domain selling.

It's all about the ROI, lads. I'd much rather take a $500 bird-in-the-hand than wait ten years for a $5000 bird-in-the-bush that may never come (of course, I'd REALLY much rather have a bird-in-the-hand that earns me $500 a year for 10 years )

garptrader

The development pros will likely argue that earnings are largely a function of how a website is developed/monetized and only influenced/facilitated with a good domain. If you develop a minisite and throw up Adsense blocks, what are your earnings? If you are running a lead gen site on a GEO or service domain, earnings could be very different...

I've had domain sales in the high XXX or low XXXX range where the buyer did essentially nothing with the domain (perhaps a long-term investment) - not my problem.

But I'll still agree looking at many portfolios that many of us need a reality check.

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akcampbell

Different people have different ways of looking at things. Sashas looks at things one way as a minisite developer, domainers look at things another way. It takes 3 minutes to advertise a domain on NamePros at a ridiculous price, if it doesn't sell the domainer has wasted 3 minutes of his time. If you spend 3 months hand coding a website and it doesn't work, that's a lot more time wasted. I have done both of these things so I can see things from both sides.

As Samit points out, it's not easy to make $10 a month from a website let alone $10 a day so the latter is not to be sniffed at but saying that, some people make alot more and they are less fussed by domainers prices.

For example, Zuriko, a former NP member, sold Claim.pro and Claims.pro to a guy I know for $2,000 each. I got speaking to him and sold him Compensation.pro for $750. He was in the online claims business and had websites making £5,000 GBP per week. He didn't see domainers as delusional, if he wanted something he bought it. Anyway I love this guy, he ended up dropping all 3 .pros and I caught Claim.pro and Claims.pro at SnapNames. I doubt he's crying about it either, it was all in a days work for him. I saw that he'd bought his surname .com for $25,000 a couple of months ago.

I'm not convinced appraising the earning potentials of a domain name is a jedi skill that can't be taught. Alot of people know how to do it, they write books about it and make money from that too. I'm sure one day in the 90s a guy was sitting at his PC assessing the "earnings potential" of Diamond.com thought, diamonds are expensive, I bet one day somebody will pay me an arm and leg for that. Then when he sells it for $7.5m he thinks he's the Yoda of domaining. It's human nature to put good fortune down to unlearnable jedi skills and less fortunate outcomes down to bad luck. The reality is somewhere inbetween, I like the story about Ross Perot and how when he set up EDS in 1962, he was turned down 77 times before he got his first contract. That's the reality of most extraordinary achievement, it's about persistence in the face of failure.

The guys who really succeeded in domaining 7-8 year ago had it worked out they could get $25 of PPC from dropping domains that cost $5 to register so they did it 100,000 times. No Jedi skills required, just the willingness to max out your credit card and work 16 hours a day for 2-3 years. Some domainers on NP have the same unbelievable persistence Ross Perot had, they post a for sale thread at a completely unrealistic price, get no replies, bump it 20 times, then start the whole process again. I don't look down on these people as delusional or small-fry to belittle them, I admire their persistence.

Sometimes persistence pays off, former NP member Zuriko hand registered about 10 .pros in mid 2007, none of them were blockbuster keywords but he made some smart choices, he touted those domains around mercilessly, and do know what, he sold about 6-7 of them for amounts ranging from $2,000 through to Freelance.pro which he sold for $5,440. He's still the only guy who has made any money out of .pro domaining and I admire him. As an aside, he regged another 20 weaker .pros after his initial success and got nowhere second time around so persistence doesn't always work but it did for a while and he must have made about $12,000-$15,000 from .pro after deducting costs.

There are different types of domains, there is the domain with earnings potential that Dongsman will go for, then there is the hubris or vanity domain like Giraffe.com that on the surface seems to have little real commercial value until you get a group of marketing executives sitting round a board room table wondering what brandable .com would best convey the industry leading height of their new cherry picker. Because it's a long shot, pardon the pun, Giraffe.com has probably been traded 2-3 times between domainers as a collectible but some delusional domainer who holds out for $2m gets it because the company has spent $50m developing the product and plans to spend another $25m marketing it so $2m is a relatively modest sum.

Total.proJanuary 2013 registry stats added 12 May 2013.

Jaco

You're a real enigma.
On the surface, you seem to "get it" (or, at least have the rudiments of intelligence to eventually "get it") yet you're totally into .pro.
Maybe you're just seeing something in .pro that no one else is. Either way, I find it distracting- reading a well-written, thoughtful post knowing it comes from someone who is a huge fan of a lolTLD.

I don't think appraising the value of domains is a Jedi skill that cannot be taught. Rather, I think that most people are simply lacking the correct, raw intellectual framework to learn it. There is a lot to be said for "nature" in the nature vs. nurture debate- find me someone who falls on the right side of nature (10%) and they can be taught. Find me someone who falls on the wrong side of nature (90%) and they will never, ever "get it" no matter how hard they try or how much 'inside information' you give them. I used to think that appraising value metrics of a domain name was a skill rather than a talent, too. Time has changed this belief. I'm now pretty much convinced that it requires too much confluence of the right and left brains; the vast, vast majority of people predominate too heavily to one side or the other to ever succeed at doing it.

Worth noting, in the vein of good fortune and bad luck; when Corporation XYZ decides that they want to start a well-funded brand around Giraffes and spend a pile to acquire Giraffes.com, that is a function of pure chance. That cannot be appraised or assessed in advance. That outcome is simply the universe smiling down on you in completely random fashion; those occurrences cannot be the basis for any sort of decision-making process, presuming your goal is to allow the fruits of past good decisions to compound in consort with future good decisions. The reason some people are winning poker players while most others are losing poker players is simply understanding the role probability plays in outcomes over a large sample size, and acting accordingly without any regard to the occurrence of chance. You cannot justify any decision based solely on an outlier of luck.

tristanperry

Something about this thread confuses/troubles me. However I feel this sums it up nicely enough:

Good money can be made from development.

Good money can be made from domaining.

Both are good ways to make money (when done correctly; when done badly BOTH are giant wastes of time and money).

Hence do what you enjoy and what earns you a good enough amount of revenue.

Simple.