Bob Hawkes

Simple Ideas to Guide Domain Name Investing

By Bob Hawkes, Jul 14, 2021
  1. Bob Hawkes

    Bob Hawkes Top Member NameTalent VIP Gold Account Trusted Blogger

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    Ideas don’t need to be complex to have value. I present below some simple principles about domain investing that resonated with me. I urge all readers to add their own principles in the discussion section in order to expand the list.

    Acquire Domain Names With Many Potential Users

    It is easy to get distracted by cute, or highly specialized, names that might just appeal to a very few potential purchasers. Always ask yourself how many legitimate purchasers might desire this name. A good way to help you evaluate that is to see how many existing companies are using similar names already. Just check active listings in the OpenCorporates database. Determining how many similar domain names are developed is another way.

    Imagine Yourself As The CEO

    Just because a name is related to many different companies, does not necessarily mean it is likely to sell. The domain name must also be of high quality. A useful idea is to imagine yourself as the CEO of a company considering purchase of the name. Would you base the future of your company on this name? Is it good enough?

    Is This The Best Use Of My Money?

    Perhaps the most important goal for a domain investor should be improving portfolio quality over time. One way to help achieve that is to make the best possible use of each dollar. Whether considering a hand-registration, domain renewal, closeout purchase, auction bid, or other acquisition, ask yourself if there is a better way I could spend this money.

    Why Should I NOT Acquire This Name?

    It is easy to see the positive features of a name we like to such a degree that we overlook a negative trait. Play the critics role, and try to list reasons why this is not a good acquisition.

    Have An Accountability Partner

    It is easier to avoid errors when you don’t do domaining alone. Whether you have a business partner, or count on a friend in the industry, a spouse or other family member, or someone else, try to get a second opinion before major decisions. I think it can be helpful even if your accountability partner does not have specific background in domain names. I covered this topic in Don’t Do It Alone.

    You Do Not Need Any Particular Domain Name

    You will never own every good domain name in a sector or niche. By realizing that, you can avoid over-paying for domain names, or acquiring too many names in a niche. If bidding in an auction, determine the maximum you will pay and don’t go beyond that.

    Only Acquire Top-Quarter Names

    If domain portfolio quality is improved year by year, then domain names will be easier to sell. A simple idea I heard someone say is to only acquire domain names that would rank in the top-quarter of your existing portfolio. If you do that consistently, your portfolio has to improve in quality.

    What Are Your Best Names?

    I find it challenging, but useful, to periodically ask myself what are the best 10 or 20 names in my portfolio. That helps me focus on quality. Also, these are your best names and therefore deserve extra effort in improving their chance for sale through effective listing in the right places. Perhaps it is also useful to ask which are the worst 20 names in the portfolio, and why.

    What Is The Competition For This Domain Name?

    While in some senses a domain name stands on its own, the price and sales probability depends, to some degree at least, on competitor names available to a client. Therefore it is important to ask at acquisition time what are the competitor names. These may include the same term in other extensions, or similar terms in the same extension. Dofo can help you see which of these competitor names are currently listed for sale at the marketplaces, and at what prices. DotDB is a useful tool to see what is registered, and also what longer names contain the term.

    Have An Imaginary Boss

    Writing down the case for some action almost always clarifies thinking and decreases the chance that you have overlooked critical information. I have not tried this personally yet, but I wonder whether it would be helpful to have an imaginary boss, who required a one page maximum point-form case prior to any decision. For example, if you are considering an acquisition, it might include comparator sales, competitor names for sale, size of the sector market, etc. This list of 18 questions from Hand Registering Domain Names could form a basis, as it is applicable to any kind of domain name acquisition.

    Take Breaks

    Domain investing can be addictive. One way to control the addiction is to periodically take a break from new acquisitions. Don’t even look at the auctions or check out hand registration possibilities. I have done this several times, and come back refreshed each time. I covered the topic of Taking A Break in a 2019 NamePros Blog article.

    Balance Buying And Selling Activities

    Many investors enjoy the acquisition side of finding great names at good prices more than the work of listing and selling. However, being alert to the need to balance the effort you put into both the buy and sell sides will help you be more successful. I summarized ideas on this topic in Balance Buying And Selling.

    How Much Can You Afford To Lose?

    Domain investing is not easy, fast or assured. Before you invest anything, ask yourself how much you can afford to lose, and don’t invest more than that until you have sales to generate funds for new investments.

    Have A Plan

    I have heard various people say that it is important to have a business plan, review it periodically, and treat domain investing as a business, even if you are simply in it as a hobby or side-gig. The idea of a portfolio prospectus may be one way to make sure your actions are following a plan.

    Sell Or Not? Could I Do Something Better With This Money?

    When faced with an offer that you feel is negotiated as high as possible, a helpful perspective is to ask yourself the following: Could I do something better with that money? If you feel keeping this name in the portfolio has more value than what else you might acquire with the funds today, then keep the domain name. However, if you could use the funds to get more or better names, then accept the offer and move on.

    What Is The Wholesale Price? What Would You Pay For The Domain Name?

    When you sell wholesale to other domain investors you are trading off the potential to get much more in the future through a retail sale, versus the certainty of a sale now at wholesale pricing. So what is a reasonable wholesale price? A useful guide is to ask yourself if you were the buyer, what would you be willing to pay for the domain name.

    Is This Domain Name Right For Me?

    Not all good domain names are a good fit for all domain name investors. It is worthwhile to ask not only is this a good domain name, but is it well-suited to your strengths and interests. This idea was mentioned in What Are Your Domain Name Superpowers?

    Is This The Right Opportunity?

    Domaining is difficult because the best opportunities to invest are prior to a sector or niche being well established. It is always good to ask yourself whether this is the right time to invest in a sector, or if that opportunity has already passed. This topic was covered in the article Catching Trains And Avoiding Train Wrecks.

    Am I A Better Domainer This Year?

    In anything, striving to steadily improve is a reasonable goal. That applies to domain investing. At least once a year, ask yourself whether your portfolio is stronger than it was a year ago, and also whether your skills and knowledge as a domain investor have improved. I covered this topic in more depth in Becoming A Better Domain Name Investor.

    So, what important simple principles and ideas would you add? Please share with us in the comments section.

    This is my 100th NamePros Blog article. I wanted to thank everyone for your interactions with the articles, your good ideas and insights, well-worded counter arguments, and your supportive comments and ‘likes’ or ‘thanks’. NamePros is a truly incredible online community, and I have learned so much from everyone, some of which I tried to summarize in this article. I am very appreciative to NamePros for the opportunity to write for the NamePros Blog. I am sure that the discipline of researching and writing the article each week has made me personally a better investor. Hopefully you have found some of the articles helpful in your growth as an investor too.
    Last edited: Jul 14, 2021
    The views expressed on this page by users and staff are their own, not those of NamePros.
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  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 100th blog post on NamePros. View all blog posts

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  5. Comments (45)

  6. omelet

    omelet Top Contributor VIP

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  7. Bonsu

    Bonsu Top Contributor VIP

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  8. MS.

    MS. New Member

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    Work of a genius. Thanks for sharing. And, congratulations on the 100th :).
  9. varmuk

    varmuk VIP

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  10. jiy k

    jiy k Established Member

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    Thank You for this Enlightening Post. And Many Congratulations for 100th Article.
    Last edited: Jul 14, 2021
  11. FolioTeam

    FolioTeam VIP

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    Happy 100th. I really enjoyed this piece.
  12. The Durfer

    The Durfer Wesley Sweatman VIP

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  13. Leopard

    Leopard Named 150 + Companies . Brand Consultant

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    Thank You Bob. God Bless you ! We all appreciate your incredible work and immensely benefit from it. You are a big asset to our community.

    Kudos on this achievement and more to come

    - Leopard
  14. manuelbroker89

    manuelbroker89 New Member

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  15. BradWilson

    BradWilson Upgraded Member Gold Account

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    Thank you so much for all the effort you put into these posts and congratulations for reaching this amazing milestone.

    As I was reading your post, I thought everything you wrote was great. Your advice clearly shows you are a very wise person, and I think everyone who wants to be successful actually selling domains should follow everything you write.

    But the weird thing is, even after building my portfolio to over 1,000 domains, I'm really NOT doing this to sell domains. Yes, any sales I make are nice but that isn't WHY I'm doing this.

    Instead, I've been building my domain portfolio to relearn the meaning of words AND to NOT lose my mind. I've actually been doing domains for about 23 years and I've had some really nice sales along the way.

    My WHY is probably very different than most and for me it isn't just one reason for being different.

    That's because 2 and a half years ago my life changed completely. I found myself answering the call to provide elderly care for both my step-mother and my 85 year old father. Unfortunately, my step-mother passed away after only 4 months and now I provide care for my father.

    My father and I have never gotten along at all and now it's far, far worse. So without something to keep me going I think I'd have lost my mind a long time ago.

    My background is mostly in web development with a good amount of affiliate marketing, some 3d animation and a little video production thrown in to keep things interesting.

    But in the middle of all these "things" I really found my joy locating new domain names. My enjoyment wasn't just being totally thrilled when I found a cool new name. I was relearning words that I had forgotten because of a head injury I had in a car accident about 17 years ago.

    So basically I stumbled back into domains but this time as a web development project. That's because I realized quickly I needed the thrill of finding new domains to motivate me enough to stay sane as I built my domain project. And so far its worked really well.

    And the amazing thing is it really doesn't matter if I ever sell anything. I benefit just by staying focused on this project, learning new skills and simply NOT going insane.

    The answer to your question...

    "what important simple principles and ideas would you add?"

    Is, really know WHY you are doing this business.

    I would guess or maybe hope it's more than just to make money.
    Last edited: Jul 15, 2021
  16. Grego85

    Grego85 Fire.Horse

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    Love this article!

    The basics are the most important, if you do the basics right, you have a decent chance.

    My most simple rule of thumb is that getting domains of a good enough quality sell for 4 fig+ should be hard for you, because it is pretty hard to do. You should be failing to get the names you're going for half or most of the time. If you find that getting your names is pretty easy and your portfolio is growing quickly, I can almost guarantee you are making a lot of mistakes.

    Take your time, have almost ridiculous standards, and prepare to be disappointed on most of the domain gems you try to get. But be relentless in hunting the opportunities and just keep trying and competing. Instant gratification and thinking you are the ultimate creative is sure failure in domaining.
    Last edited: Jul 15, 2021
  17. cbd

    cbd Top Contributor VIP Gold Account

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    Spot on!

    So much great advice here. Thank you.
  18. Mister Funsky

    Mister Funsky Top Contributor VIP

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    Happy 100! Another great article...thanks Bob!
  19. DuDD

    DuDD Established Member

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  20. koolishman

    koolishman Top Contributor VIP

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    Thank you Bob for your blogs. Looking forward to the next 100!
    Last edited: Jul 15, 2021
  21. CraigD

    CraigD Top Contributor VIP

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    Congrats on your one hundredth NP blog post!
  22. PhilTheChill

    PhilTheChill New Member

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    Oh god... wish I'd read that BEFORE I hand reg domain names... still, i guess what doesn't kill you makes you stronger :)
  23. henrypcyeung

    henrypcyeung Established Member

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    I think investing should not only look at the present, but also the future. Some domain names related to new technologies may have only a few existing potential buyers nowadays. But they are still worth investing because the pool of potential buyers will become larger and larger in the future.
  24. CTUXSF

    CTUXSF Established Member

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    Congrats on your 100th article, Bob. And thank you for your diligent and consistent effort to enlighten and help all those around you. Peace.
  25. bmugford

    bmugford PRO VIP ICA Member ★★★★★★★★★★

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    Great common sense article. This is the type of thing that is valuable for anyone from noobs to experienced investors.

    Last edited: Jul 15, 2021
  26. jhm

    jhm Glazed

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    Think everyone has said it, bravo Bob!
    Last edited: Jul 15, 2021
  27. rcs1973

    rcs1973 Established Member

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    Great article. TRAFFIC is still a great (maybe the best) indicator of the quality of your names.
  28. Janardhanan

    Janardhanan Established Member

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  29. honestbobby

    honestbobby Established Member

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    Thank you Bob Hawkes... Great article..
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