NameSilo
Bob Hawkes

Domain Investing: Just The Basics – Part 2

Views:
1,660
Comments:
17
By Bob Hawkes, Oct 1, 2021
  1. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

    Posts:
    7,864
    Likes Received:
    26,883
    Last week’s Domain Investing: Just The Basics – Part 1 looked at domain name terms, extensions, and the basics for researching, registering, buying, renewing, and listing domain names. The article also considered developing a plan for your domain name investments.

    This week, I take a look at categorizing domain type, and why that matters, domain name landers, setting prices, payment plan options, DNS records, fast-transfer networks and domain transfer.

    The third, and final, article in the series next week will examine inbound versus outbound sales, domain name promotion, tracking interest in your names, domain name parking, creating a domain name marketplace, as well as some resources to learn more.

    Domain Types

    We can look at domain names in terms of their structure, extension or use.

    Structure:
    Domains can be characterized according to their structure, for example whether a single word, two word, numeric, alphanumeric, acronym, etc. Domain names with different structures can be more popular in one region than another. For example, numeric domain names are popular in China, but seldom seen in North America.

    Extension:
    Another way to characterize a domain name is by the extension, or TLD. See part one for more on domain extensions.

    Use:
    Perhaps the most important way to characterize a domain name is by its potential use. Is the domain name suited to be the main brand for a business, or a secondary name used to help attract traffic? Is the name intended for a specific marketing campaign, product or application? Does the name target a certain geographic location?

    @Dave provides great coverage of this topic in his Domain Investing introduction. He classifies .com names into brandables, GEOs (names suited to a specific city or region), keyword, and category killer. See the link above for explanations and examples of each type of name.

    I find the following similar system useful for characterizing domain names.
    • Brand This will become the company or organization name, or is already the name.
    • Match The name represents one of the major products or services offered by the company. As such, the name is easy for potential customers to remember, and could help drive traffic to the business. Therefore, using the domain name can save on advertising costs, help reach a larger audience, or both.
    • Campaign This is somewhat similar to a match name, but is more narrow. Domain name phrases can find great value here, as easily remembered phrases that hint at the central point of the campaign. On social media such as Twitter a domain name becomes linked by simply including the period, giving impact to descriptive domain name phrases.
    • Ancillary Sometimes a business will want an extra domain name for a specific purpose, such as philanthropy, news, etc.
    • Abbreviation Some companies with a long multi-word name may seek an acronym to help clients connect more readily. This might be simply redirected to the main site, or for a possible future rebranding to use of the acronym as the primary site, such as Kentucky Fried Chicken did to KFC.
    There are other types of names, for example a global business holding their name in many different country codes, or holding variations on their name for defensive purposes.

    Why is it important to characterize your domain names? It will help you estimate probable interest in the domain name, and in pricing the name. A name intended to be the brand of a biotech company or financial institution would command a much higher price than a multi-word phrase domain intended for one marketing campaign, or most GEO domain names.

    TIP – How Valuable Is That Geo?
    The value of a GEO domain name will depend on the importance and funding of the sector, and the size of the city or region. For example, a name suited to a real estate agent in a major city will have many more potential buyers, depending on the exact name, than one for piano tuners in a small city.

    What domain name extensions are acceptable to the end user may depend on the use category. Most businesses will desire a .com for their main domain name, but would likely prefer an .org if they were setting up a nonprofit arm. They might consider a new extension with a nice match across the dot for a specific marketing campaign, even if they would not consider one for their main site.

    There are exceptions, but usually the singular is the better, and more valuable, brand. For example box would be a great brand in many possible sectors, while boxes likely indicates a store that literally sells, or rents, boxes or box-like enclosures. So boxes would likely be used as a match type domain name, while box as a brand.

    There are other aspects of the structure of a name, such as whether it contains a hyphen. Hyphenated names are valued in Germany, and a few other parts of Europe, but much less so in the United States. See Want A Hyphen With That Domain Name?

    Pricing

    Setting the right price is both important, and challenging, particularly if you are starting out. Price a domain name too high, and some potential purchasers will not consider the name because it is outside their budget. Price it too low, and you may leave money on the table. Also, a too low price could actually harm the domain name since it might lead to a perception that the domain name must not be valuable.

    TIP – Get Old Listings Down
    Even if you don’t plan to list on a certain marketplace, make sure there are not outdated listings of your domain name from the previous owner. If these are at a much higher or lower price than you are asking, the listing may harm your chance of sale or price. Dofo is one easy way to see all the listings for a domain name.

    Whether to price a name at all is a key question. The argument in favour of a buy-it-now price is that it allows an instant purchase. Some purchasers don’t like to barter, or simply want to obtain the name immediately. At certain pricing levels, domain name impulse purchases are possible.

    That said, there are arguments in favour of offering both a buy-it-now price and a make offer option. Some buyers like to feel they got a deal, so by setting the buy-it-now a bit higher than you really need for the domain name may help convert more sales by giving you room to negotiate.

    However, it should also be said that some research at brandable marketplaces has indicated that giving both instant purchase price and make offer options may lead to buyer indecision, and no purchase at all.

    If you do use make offer, what should the minimum be set at? NamePros users contributed to a survey to see what sort of minimum offer price was best. While results varied extensively, many suggest that making the minimum offer a percentage of the buy-it-now price is best, rather than a fixed value throughout the portfolio. There was little consensus on what that percentage should be, but perhaps 70% is a reasonable figure. For example, if your buy-it-now price was set at $2000, a minimum offer price of about $1400 might be about right, leaving some room to negotiate, while still giving a clear indication of the approximate price expectations.

    Some prefer to give no price at all, and have the potential buyer make the first offer. They therefore indicate “price on request”, and only respond after they first learn a bit about the buyer.

    If you are setting a buy-it-now price, how do you know what that price should be? You have a few, not equally valid, ways to get information.
    • Comparator Sales Search on NameBio, or the comparator sales section of GoDaddy GoValue, to find the selling price of comparable domain names. Make sure that the name is truly comparable, however. A single small difference, such as a plural form, or a different extension, can change price by a huge factor. Also, see if it sold at a retail venue. Perhaps most important, concentrate on comparable sales that are fairly recent.
    • See How Others Are Pricing Similar Names Use Dofo Advanced search to see how similar domain names on marketplaces are priced today. You can set the extension, word to be included, marketplace, etc. The article How Are Investors Pricing Their Domain Names explains how it is done, as well as giving results for several extensions.
    • Base Price On Competition If I have the domain name example.net, and someone else right now is selling example.com, that will limit how I can price my name. Clearly I can’t ask as much as the .com. It is a few year’s old, but this pricing guide from Bill Sweetman at Name Ninja may be helpful, as he suggests price ranges and ratios between extensions. Keep in mind, however, that no one ratio works, as you also need also consider the sector and specific word.
    • Human Appraisals You may want to ask a trusted friend who is experienced in sales of similar domain names to help you in setting price. You can use the Domain Appraisal section of NamePros to get appraisals. The NamePros Blog recently had an article on Getting The Most Out Of NamePros Appraisals.
    • Automated Appraisals The fastest and easiest way to get pricing information for a domain name is to query one of the automated appraisal systems, but you will find values will vary extensively. This is partly because they are not sophisticated enough, and partly because the different systems weigh different aspects of the name. This article Taking A Closer Look At Domain Name Appraisals covers the main options, uses and caveats of automated appraisals. Since that article came out, Alter has now developed an automated brandable domain name appraisal system. Estibot, NameWorth and GoDaddy GoValue are covered in the article.
    TIP – First Decide On Your Price
    If you use appraisals, human or machine, consider them second opinions. First do your own research, and form your own opinion about pricing, before consulting someone else.

    TIP – Review And Adjust Prices Regularly
    Keep in mind that domain name prices change, sometimes dramatically. Periodically review and adjust pricing. For example, a meta or NFT domain name today is worth far more than it was a year ago. A DVD domain name is worth far less than it was 15 years ago.

    Lease, Rental, Payment Plans

    Sometimes a prospective buyer will simply not have the budget to match what you consider to be the value of the domain name. One option in this case is to offer the name on some sort of payment plan or lease to own arrangement.

    While the article was written in 2019, the main considerations and principles covered in Domain Name Payment Plans still apply. Make sure the arrangement safeguards your domain name from abuse, and that the terms are clear to both buyer and seller.

    One advantage of payment plans from a buyer perspective is that they provide a way for a purchaser to try out a name, or to secure rights to several names and then decide which one to use. When a buyer ceases to pay, the name reverts to the owner, along with funds already paid.

    While the details vary with the marketplace, in most cases the buyer can use the domain name after the first payment, but they do not get ownership until all payments are complete.

    Rental plans involve a monthly payment, but without any plan to ever actually secure the name through ownership.

    Domain Name Landers

    First impressions are important, and that applies to domain names as well. A lander is simply a single page website, or page of a website, that the user is directed to when they type the domain name into a browser URL.

    All of the marketplaces offer landers, as do other services such as Efty. See the article A Visual Look At Domain Name Lander Options for examples and some things to consider.

    TIP – Check Your Landers
    Either use an automated script, or check by hand, your domain names periodically to make sure they all have operating landers. Especially when you transfer from one registrar to another, it is easy to forget that you were using the lander at the initial registrar, which no longer works.

    The details will vary with marketplace, but setting up a lander involves entering some basic information at the marketplace, such as price and minimum offer, payment plan option, and possibly a brief description.

    Next, go to the registrar where this domain name is registered to adjust the domain nameserver settings, DNS to point to the lander. For example, the DNS settings for Dan are ns1.dan.com, ns2.dan.com.

    For Afternic you can set landers that display your buy-it-now price, or ones that only give a contact phone number. You select which lander through the DNS settings you use, as explained in this article.

    At Sedo, after you have set up the lander, go to your Sedo listings, select Parking Optimization (even if you are not parking), and then under Layout select from various options. It is probably best to try a few and see what you feel works best for your domain names.

    It is important to realize that changes in DNS settings can take time, sometimes many hours, to propagate, and therefore sometimes your changes will not be immediately visible after you change from one lander to another.

    Many investors prefer the Dan landers, and recently they have provided additional customization options so that you can now set the color, a background picture, etc.

    While the lander is an important way that potential users can find that your domain name is for sale, it is certainly not the only way. The article The Many Ways People Might Discover Your Domain Name briefly outlines the possibilities.

    Fast-transfer

    One of the ways people can find your name is through the registration stream. By that, we mean someone is searching to hand register a domain name, and among alternative names they are presented with the possibility of purchasing your name.

    Both Sedo and Afternic have networks called fast-transfer. This means you agree in advance that if the name sells it can automatically be transferred without your formal approval. To be listed, names must be in certain extensions, be registered at participating fast-transfer registrars, and have a buy-it-now price set.

    The main advantage of fast-transfer is not the automated transfer, but rather fast-transfer domains appear in the registration stream, giving your names potentially huge exposure across many different registrars around the world.

    For your domain name to be eligible for fast-transfer at Afternic it must be registered at one of these registers – make sure you find the right list on the page, search for “Fast-transfer domains must be registered at one of these fast-transfer registrars.”

    The domain name for Afternic fast-transfer also needs to be in one of these extensions: .com, .net, .org, .info, .co, .biz or .de, and be at least 60 days old. Note that the list at Afternic is in error at time of writing – it show that .pw domains are fast-transfer capable which they are not, and omits .co which are fast-transfer enabled on their network.

    The Sedo fast-transfer network handles a much larger number of extensions, including many of the new domain extensions. Their registrar network does not include GoDaddy or its resellers, but is still an extensive network.

    To see which registrars are currently able to host fast-transfer on Sedo, sign into your account and add any domain name. When you get to choose registrar, those that are designated with {s} are fast-transfer compatible.

    Some registrars, including Dynadot, Name, NameSilo and Sav are part of both fast-transfer networks, while others are members of one or the other. For example, Epik is part of Sedo, but not Afternic, while Namecheap and Porkbun are part of Afternic, but not Sedo.

    There is often confusion between registrars that sell domains from fast-transfer networks, and those that are compatible registrars for listing on fast-transfer networks. For example, Namecheap sells from the Sedo MLS system, but is not a compatible registrar for listing on the Sedo MLS network.

    To activate a domain name for fast-transfer, as well as registering it at a qualified registrar, and listing it at a buy-it-now price on Sedo or Afternic, you also need to agree that if it sells it can be automatically transferred. Normally, this is done by the registrar sending an email, and you responding at the link with your agreement. Unfortunately, sometimes you never get the email, so can’t approve fast-transfer.

    Often this is because you listed it prior to it being 60 days old. Most registrars do not support fast-transfer in the first 60 days, and sometimes not in the last 30 days of registration. If you apply for fast-transfer on day 58, in theory it should send you the email 2 days later, but often you will never get the email to opt in.

    TIP – No Fast-transfer Email? Relist
    If you feel sure that the name qualifies for fast-transfer, but did not receive the email, simply delete the listing at Sedo or Afternic, and list it again with a buy-it now price. Hopefully this time you will get the email.

    Dynadot uses a different system to approve fast-transfer. You log into your Dynadot account, look through your list of names, and if a request for Sedo or Afternic approval is active a flag will indicate that. Select the name(s) then go to Bulk Action and select Set Afternic or Set Sedo as appropriate. In a few seconds the Dynadot domain display will show you that fast-transfer is active.

    DNS Records And Domain Verification

    Sedo require that you prove that you own each domain name before it is listed on their marketplace. The standard way to do this is by entry of a string of characters and numbers which is uniquely assigned to your account, your Sedo ownership code.

    You copy and paste this from Sedo, then log in at your registrar, go to the domain name you want to verify, and with most registrars there will be something called DNS Records. At Namecheap you go to managing the name and it is the Advanced tab on the right. There are various types of records that can be entered, but you want a TXT record. Create one, then paste in your Sedo ownership code. Wait a while, and your name should be verified.

    TIP – Keep Registrar Default DNS Until Domain Verified
    You should keep your DNS settings, ns1.something.com, etc., to the default for your registrar until the domain name is verified, otherwise your DNS records at that registrar will not be active. After your domain name is verified, then you can set the DNS to point to the lander you want to use.

    With Dan you have a similar process, although strictly speaking you will only need verification if the name was listed by a previous owner. Dan also have an alternative verification method involving a third DNS entry, handy for the few registrars that do not allow you to set DNS records.

    Is your Sedo or Dan verification not working? See the following tip.

    TIP – Set Ownership TXT Record BEFORE Sedo Listing
    I find that Sedo will verify domain names almost immediately if I set the ownership Sedo TXT record at my registrar prior to listing the name at Sedo.

    Afternic don’t use TXT record verification. Not infrequently, they won’t let you list a name because a previous owner left the listing up. You need to contact service at Afternic and prove that you own the domain name. They normally accept as ownership proof a screen capture showing the domain name in your account. I find it faster to just send them that proof at the same time I email them the request to take out the old listing.

    Transferring Domain Names

    There are two main ways to transfer a domain name.

    Standard Transfer
    This is used when the name is changing from an owner at one registrar to a different, or the same, owner at another registrar. The steps are:
    1. First unlock the domain name at the registrar where it currently resides.
    2. Next, you request an authorization code – sometimes these are obtained instantly, and other times they will be emailed to the administrative contact for the name.
    3. Once the authorization code is available, at the new registrar a transfer request is made, giving the domain name and authorization code. A transfer fee, usually approximately the cost of one year renewal, is made at the new registrar. After the domain name transfers, in almost all cases, a year is added to the registration.
    4. The original contact for the domain name will be asked to approve or reject the transfer. If nothing is done, the transfer will proceed after 5 days. However, if you approve the transfer, it can finish transfer immediately. The whole process from start to finish can take only about 20 minutes.
    TIP – DNS Settings Transfer, But Not DNS Records
    Normally the DNS settings will transfer with the domain name, but not the DNS records. This means that if you had the lander pointed to Dan, for example, the lander will still work after the transfer. However, if there were TXT or other DNS records, they would not transfer.

    Push
    In this case you are transferring from one owner at a registrar to a different owner at the same registrar. The details will vary with your registrar, but there should be an option like transfer ownership. In most cases you indicate the email or username of the new owner, but at Dynadot it is the forum name that is used. Some registrars require the new owner to accept the name, and in other cases it simply transfers.

    The advantage of push is that the new owner does not need to pay for an additional year of registration, nor receive an extra year, and in most cases the transfer can happen even within the 60 day lock period.

    Some end users may not realize that the registrar for the domain name does not need to be the same company they use for web hosting. It simply is a matter of changing the DNS records to point to those for the web hosting company. In fact, most domain investors feel it is wise to use a different company for web hosting and domain registration.

    Comparing Commission Charges

    If you are trying to decide which marketplaces to use, this week Lee Lovell conveniently summarized and shared on social media the current commission rates at the main domain name marketplaces. Follow the replies to get a few that had been left out of the original post. Of course, commission is not the only consideration when choosing a place to sell your domain names.


    Update on Oct 7, 2021:
     
    The views expressed on this page by users and staff are their own, not those of NamePros.
  2. Next Article
    Top Topics: NFT.com Sold for $2 Million; What's Your Strategy - Passive or Active?...
    Previous Article
    Top Topics: Floor.com Sells for $3,144,000; Do You Have a Domaining Company?...
  3. Loading...
  4. Bob Hawkes

    About The Author — Bob Hawkes

    Domain analyst, writer and informal educator, with particular interests in domain name phrases and non-business uses for domain names. I am a risk averse domain investor who only invests modest amounts in a variety of extensions and niches. Don't hesitate to contact me - I like to help!

    This is Bob Hawkes's 111th blog post on NamePros. View all blog posts

    Home Page:
    https://namesthat.win
    Actions:
    Follow
  5. Comments (17)

  6. Temitope

    Temitope Established Member

    Posts:
    38
    Likes Received:
    30
  7. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

    Posts:
    7,864
    Likes Received:
    26,883
    Sorry this is so late out this week. Also, it got so long that I pushed a few topics to a part 3, but next week really will be the last one in the series!
    Bob
     
  8. Temitope

    Temitope Established Member

    Posts:
    38
    Likes Received:
    30
    I booked a space here for the forthcoming part 3 of the series. Can't wait!!!! Once again, I like to say thank you.
     
  9. CraigD

    CraigD Top Contributor VIP

    Posts:
    4,840
    Likes Received:
    11,381
    Sorry Bob. I accidentally disliked your post earlier today. I didn't have my glasses on :xf.cool:. Always a wealth of information :)
     
  10. The Durfer

    The Durfer Wesley Sweatman VIP

    Posts:
    10,534
    Likes Received:
    15,767
  11. jiy k

    jiy k Established Member

    Posts:
    467
    Likes Received:
    159
    Have read many articles on Domaining online, but never came across such a comprehensive article covering each and every aspect of this subject and explained in such a lucid manner.
    Thank You for taking efforts to Educate and Guide us. _/\_
     
  12. charrisg

    charrisg Established Member ★★★★★★★★★★

    Posts:
    92
    Likes Received:
    73
  13. Networkisnetworth

    Networkisnetworth New Member

    Posts:
    6
    Likes Received:
    20
    This is comprehensive and resourceful. Thank you Bob
     
  14. redemo

    redemo Established Member

    Posts:
    873
    Likes Received:
    1,676
    Thanks Bob. Is there a way to filter and find geographical location plus commercial trade domain names? What's the best platform to do this on? Cheers.
     
    Last edited: Oct 2, 2021
  15. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

    Posts:
    7,864
    Likes Received:
    26,883
    Thanks for your question.

    Other than via keywords, I don't know of a current way, not saying there is not one. You can use Dofo.com advanced search to readily search for names including a keyword, let's say Vienna, to see all domain names involving that word that are currently for sale.

    On the wholesale side, one could do similar search in ExpiredDomains.net to similarly find listings with any particular geographical name keyword.

    I did not follow details, and not sure if it is yet out or not, as I don't much do GEO personally, but my understanding is that SquadHelp are about to release a product that will automatically pull all of their listings for a certain region to make it easier to find geo-oriented brandable names. Their CEO mentioned it on social media not long ago. If others know more details, please add them to the discussion.

    Bob
     
  16. Maxasll

    Maxasll Upgraded Member Blue Account

    Posts:
    316
    Likes Received:
    477
  17. 4better

    4better Top Contributor VIP

    Posts:
    2,806
    Likes Received:
    7,080
    Thank you Bob for your great contribution to the community. Splendid job.
     
  18. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

    Posts:
    7,864
    Likes Received:
    26,883
    By the way, if you want to suggest basic domaining topics not covered in Parts I or 2, or the plan for 3 listed in this article, feel free to mention them here. I am working on Part 3 currently and hope to have it out by Wednesday morning, so could accept suggestions up to sometime on Tuesday.

    Thanks so much for all of the positive comments, everyone.

    This series was my effort to cover some of the things I gradually learned by experience over my first few years in domain investing.

    If you like, view it as a rather short, but free:xf.smile:, introduction to domaining essentials book.

    Thanks to NamePros for making it possible to share information such as this in such a readily accessible fashion.

    Bob
     
  19. jhm

    jhm Glazed

    Posts:
    3,631
    Likes Received:
    5,016
  20. Omar Negron

    Omar Negron Top Contributor VIP

    Posts:
    1,711
    Likes Received:
    1,607
  21. Md Foysal

    Md Foysal New Member

    Posts:
    1
    Likes Received:
    1
    Thank you sir for providing urgent information...
     
  22. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

    Posts:
    7,864
    Likes Received:
    26,883
biix
  1. NamePros uses cookies and similar technologies. By using this site, you are agreeing to our privacy policy, terms, and use of cookies.
    Dismiss Notice
Loading...