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strategy Simple Ideas to Guide Domain Name Investing

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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.
 
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The views expressed on this page by users and staff are their own, not those of NamePros.
Thank you. I wish to watch a discussion by my domain gurus Bob Hawkes and Michael Cyger together. If it is already done, please lead me there.
Regarding the point -The Competition For the Domain Name:
In some cases, I am confused about trademark violation and selecting names of existing company names (even if not registered). Isn't it contradictory? Where to draw the line? Should one stick only to generic names?
 
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I am confused about trademark violation and selecting names of existing company names (even if not registered). Isn't it contradictory? Where to draw the line? Should one stick only to generic names?
It is a big question. TMs are awarded generally for geographic regions and for trade sectors, which is why multiple companies can legally coexist on the same name. If a name is made up and unique, and in business around the world, then there is probably not going to be space for anyone else on that name.

If they have a generic word and trademarked it for something unrelated to the obvious generic meaning (this is case of Apple - they could not get a TM to sell apples the fruit, but they and other companies can get a TM to use Apple in specific other ways - at least almost 19.000 companies use Apple in their name).

Now let's consider some generic word in a domain name, for example gentle. When I check OpenCorporates there are 3827 active listings, which mean that a fair number of companies use that as part of their name. Now if there was an existing company that used a unique combination like GentleWord, me registering exactly that, or something so similar it would be easily confused, in say an extension they don't use, is asking for trouble. But they don't own Gentle+everything, and the 3800+ active listings show that lots of companies find that a nice qualifier word.

Anyway, not legal advice, but key questions are whether one is registering a name because of a famous TM (if so, don't!) and if the name being considered would be confusingly similar to an existing name.

Bob
 
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Now if there was an existing company that used a unique combination like GentleWord, me registering exactly that, or something so similar it would be easily confused, in say an extension they don't use, is asking for trouble. But they don't own Gentle+everything,
This is where I am struck at. Everybody says that a name is considered to be of high value if it is registered in other extensions. But why? it should be other way , isn't it?
Suppose I found a matching .com for company using .net/.biz from expired domans list and outbound it to them for , say 10-20 K , can't they just take a UDRP route instead of buying it from me? But apparently many experienced domainers/brokers are successfuly selling high value names in this manner (for example LLL /LLLL). So it seems like I am missing something here.
 
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Congratulations Bob on 100 great articles, I make sure to never miss a single one.

Thank you for investing so much of your time in order to educate us, it is much appreciated!
 
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Suppose I found a matching .com for company using .net/.biz from expired domans list and outbound it to them for , say 10-20 K ,
Don't want this topic to be a legal one - separate legal section for NamePros for that. But if you approach a company to sell them a name because it matches their name that satisfies, in most cases, one of the 3 UDRP requirements. It shows bad faith in that you obtained it to sell to a particular company.

A generic word describing a product or service is in general non-TM for a business offering that product or service. For example, 48,000 active companies have consultant in their name, but that simple word, I think, would not be TMable by a consulting business. Let's say many of the companies have WordConsultant.com (where Word represents some qualifier like Innovative, Smart, NewYorrk, travel, biotech, etc.) or consultant.biz, consultant.app, etc. as their business name. There is a good chance that some of those companies would be interested in rebranding to have the authority, and memorability, of simply being consultant.com. You ideally want to be in a position where you have such a widely used and desirable word that businesses will come looking for it, there is no need to outbound. Now with hundreds of thousands of domainers seeking great words, those acquisitions are not easy.

Let me repeat what I said before. If registering a name to target a specific company, that is almost always going to get you in trouble.

Bob
 
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a name is considered to be of high value if it is registered in other extensions. But why?
It is more that being registered in other extensions means many different domainers find it a high value word. Also, if some of those are say country code and developed, it is possible that some of those businesses will look to gain a generic name in addition. There is a bit more in the article I wrote on Free Domain Research Tools on what it means when many extensions are registered.

Bob
 
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Thank you Bob. I've benefited from this, I'll get better this year.

Congratulations on reaching 💯
 
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Dear Mr. Hawkes,

Congratulations!

Simple, well articulated Checklist.

This article would be searched for and shown up on engines, and be read by newbies and veterans alike, for years on end..
 
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Thank you
This is a great article :xf.smile:
 
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Amazing article

thank you Mr.Bob
 
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Great article Mr.Sponge Bob Square agent.
 
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Amazing resources are tagged, thanks for that and your wonderful compilation!
 
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Thank you for your great ideas, Bob!
But my confusion is whether non-English words can be good domain names or not, especially for English speakers.
 
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Congratulations on your landmark. Your level of consistency in reaching 100 is the greatest lesson I take, among many many important lessons you've shared. Looking forward to reading your entire backlog.

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

Traffic is the first indicator I look for in a name, way before considering what comes to the right of the dot since every purchase I make needs to have the option of being developed or sold or developed and then sold. Without traffic (words that people use to search in high volumes for answers) I lose interest at a very early stage.
 
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But my confusion is whether non-English words can be good domain names or not, especially for English speakers.
It is a good question with no clear answer. The majority of names that sell are English (obviously except in country codes), although there are significant numbers in other languages such as Spanish.

If one is an English speaker, and does not speak another language, I think there is danger in dabbling in words in that language. However, no hard and fast rule. Some brands like to help weave their brand story around the meaning of a word in another language. Any time I have a seemingly made-up word I am considering I use Google translate to see if it is a word in another language, and if so the meaning. However, automated translations really are enough to know the nuances a native speaker would know.

Bob
 
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Thank you so much. The article is well appreciated.
 
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Hi Bob,

Simple and to the point! great reading material😊 thank you
 
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@Bob Hawkes, congrats, and thanks for sharing this vital info; more than enough to reflect on going forward in the domain name investment.
 
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It's always pleasing to read your articles... Congratulations on your 100th post.
 
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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.
Thank you for sharing your personal story, @BradWilson . I am sorry for your loss, and know that my thoughts are with you as you meet the demands in your life.

I suspect there are more than we might first think who, while appreciating sales, are in domain investing partly for other motivations. That probably would be a good topic to cover at some point in the blog on its own.

Personally, while I love to have sales, I also am in domaining because of the community of people, to challenge my brain in retirement stage of my life, to learn new things, and as an avenue for creativity.

Anyway, I mainly just wanted to thank you for the heartfelt sharing of a different perspective. It will help me to appreciate that sales, while rightfully dominant for most, is not the only motivation within our community.

Thanks again,

Bob
 
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