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Development for Domainers: Being Smart About Developing To Sell

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With the way the internet has progressed, anyone can learn to be a domainer, and anyone can learn to be a developer. Developing brings with it a new level of complexity and skills, which can be challenging for domainers to integrate successfully into their business plans. You may find yourself holding a handful of domains that would be prime for development, that just aren't selling, so you ask yourself, "Where to from here?"

Here's an anecdote to help you understand the situation:

You sell real estate, and have acquired a small piece of land on a corner near two popular gas stations. The land has been for sale for quite some time, and you feel that you could make a better sale if you could only convince buyers that it was an amazing property for a car wash business. You can go about getting your point across in a few different ways.

The first option is to leave the land undeveloped. You stick a "For Sale" sign up, and hope that someone who is looking to start a business from the ground up (literally) will come along and tackle the job. You can try to convince entrepreneurs new to this line of business of the benefits of developing this land into a car wash, but you spend most of your time attempting to gain interest from current franchise owners, explaining that this is a prime location for expansion. Your problem: You've got a limited market, and you're hoping that you can find someone who is interested in the land itself, and already recognizes the value of what can be done with it. People who are budding entrepreneurs might not have the resources to take on the construction and management of a new car wash business from ground-zero. Your advantages: Maybe you will find a buyer who wanted to use the land for another purpose. Perhaps they want to open up another type of business that they feel the land would be well suited for, and they are thankful you haven't done anything they'll have to tear down.

The second option is to develop the land. Whether you do it yourself because you're construction savvy, or you hire a contractor to take on the job, you take your piece of real estate and build a car wash on it. Perhaps you had an intuitive new idea that you incorporated, and now you can show it to buyers first hand. You put a "For Sale" in the car wash window, and can either sell it before it opens up, or wait until you've made a few dollars and have a loyal customer base. Your problem: You spent the money to build the car wash correctly and you're proud of it, but you're now deeply invested and are going to need a much larger sale price to make a profit. Perhaps your development idea was too innovative or far fetched to be practical. People don't seem to like your car wash and no one is going to pay more for a developed piece of land that still isn't making money, unless they think they can fix it. If you don't find the customer base you were looking for, you may lose money until you make a sale. Your advantages: You've opened yourself to a whole new market. If you did a good job, you've increased your profit margin way beyond what it used to be, and now you can market to investors looking to purchase an established business that they feel confident about. You've increased your experience level and made a name for yourself selling a business instead of an opportunity. Now if end up in the same situation, you're prepared to take the steps to repeat the process and come out with a sale at the end of the day, or you may even keep your business and try a new venture. If you did things right, chances are you'll come out on top whatever route you choose.

The third option is take an uneducated approach to developing the land. You don't really know what you're doing, but you've seen other people make money off of developed land, so you'll try your hand at it. You take a stab at things, or maybe hire your neighbor to do the job, and at the end of the day you've got a piece of land with a bucket of soapy water and a towel on it, with a handmade sign reading "Car Wash" painted in colors that the movie theatre had left over in storage from the 80's. You put a sign reading "For Sale - Car Wash" in front and wait for the money to come. Your Problem: The money won't come. You did a terrible job, and even though the core mechanics of your developed business are there, they aren't very useful for customers. Potential customers think, "Why would I go there when I can go to another business and not waste my time and energy?" or "Well if that's what they're offering, I might as well go wash my car at home." Potential buyers don't even look at your business seriously, and realize that even though a few people might drive by, they would have to remove your mess and hope that people wouldn't remember that spot as the shady car wash with a bucket and a rag when they do try to establish a business. The advantages: There are almost none. You've wasted your time doing a terrible job. Sure it didn't take as long as developing a legitimate business, or cost nearly as much, but at the end of the day you're making things harder for your buyers. They're going to have to remove the shoddy work you've done, and they will forever remember you as "The Crappy Car Wash Guy" when they see your name on other businesses. You may have a few desperate customers, but chances are the only money you'll make are from people who ended up there that need a service quickly, and didn't know where to find a legitimate business in the first place. When they find the real car wash company down the road, they'll never come back.

If you made it this far, hopefully you realize that the point of the story is to weigh the pros and cons of development on your domains, and that if you're going to do it, do it right. You don't want to choose the third strategy from the car wash scenario when you're trying to develop a domain name.

If you have no development skills, and aren't willing to obtain them, dont develop. You're better off leaving your domains undeveloped and pitching the idea of a well developed website to someone who has the resources to make it happen, than somewhat attempting and embarrassing yourself. You might soil your reputation as a developer, or even cost yourself money in the long run if no one can see the value in your idea. You need to prevent failure before you even begin developing.

How can you stop something from happening before it happens? Simply think things through logically. A lot of times you can get lost in the excitement of a new domain purchase, and start to sky rocket into development mode when you have a great idea. This can lead to fatal mistakes, such as attempting to penetrate a saturated market with a cliche idea, or a rushed development stage that ends up in a poorly presented product or service which holds no obvious value to the public.

If you want to slow yourself down and steer clear of bad ideas, the best place to start is by asking others for their opinion. Socrates once said, "I am the wisest man alive, for I know one thing, and that is that I know nothing." Remove yourself from your idea, no matter how much of an expert you feel like, or how good of an idea it seems to be, and ask the public how they feel. If people don't like your idea, listen to their suggestions for improvement, or use their feedback to craft a new approach.

Don't reinvent the wheel. Don't fall victim to turnkey site development patterns that will leave you high and dry. Adding free or open source scripts to a domain doesn't normally add any value to your name. You may have a name that is great for URL shortening, but you've got to stop and think, "How can I compete with tinyurl, or all the other domains that are already performing this service." If your answer is, "Because my domain is very strong," then 9 times out of 10, you're wrong. People have a tendency to stick with what they know, and unless you have the best domain in your niche, you're going to have to do something different or better than your competitors to gain their customer's business. For example, if you've got a great browser game arcade name, don't just buy a script and launch the site. Hand select your games and write descriptions that you wish the other arcades you've seen had. Offer your visitors something they can't get anywhere else, and they'll have a reason to come back. People looking to buy arcade names are probably just as capable of installing turnkey scripts as you are, and won't be willing to pay extra for them.

Always ask yourself, "Would I use this website?" Then ask yourself if your family and friends would use it. If the answer was no, or on the fence, then you need a stronger development idea before you start anything. If there is another big player in your niche, and they control 90% of the traffic, then you'll have to out-smart, or out-innovate them. If your website lists movie times and theatre locations, ask yourself, "Would I just go to Fandango?" and then start thinking of what they don't offer, that you can. Of course, when you value your website or service, take in to account the public opinion. People don't trust your movie reviews over mass public reviews, and those that do either know you well, or find your movie choices to be similar to theirs. Ask yourself if that market is big enough to profit from, and if so, do you plan to sell your developed site in the future? Will anybody be willing to invest in a service that will die once you transfer ownership? Try not to develop around ideas that require your specific input to thrive, because the resell value is severely diminished if you are no longer driving that service.

Are you really a blogger? Anyone can make a blog, so it's very tempting to throw up a wordpress installation on a domain and write about your chosen topic. The thing you need to ask, is, "Am I really a blogger?" Bloggers tend to write on topics that they have passion for, and those that do it for money are very talented writers who have something interesting to say. If you can't hold your reader's attention, and you can't come up with enough material to write on your blog every week, then you probably should try a different approach. A dead blog won't attract any advertisement contracts, and also won't attract any return visitors. Contrary to popular belief, autoblogs are not a catch all solution to the blog motivation problem, and visitors can normally tell if articles are being farmed or organically written with purpose. Your target audience for autoblogs probably already read the sources you're pulling from.

"This is all bull. I know how to rank high for keywords, and I don't need innovative new ideas. I just want visitors to cash in off of." If you find yourself thinking this, chances are you've got a bunch of bucket-and-towel-on-the-ground car washes, and you've managed to make some money off of them. If you got your website high up in the rankings for keywords, and were upset when you lost profit when google changes their algorithm and you no longer receive any traffic or profit, think to yourself, "Why doesn't Google think my site is worthwile, and why don't people link to my site?" People can stumble across your website when it's convenient and you can monetize their confusion, but are you really living up to your full potential with shoddy development? Are you offering your users something they can't get anywhere else? If you aren't, then considering changing your development strategy on one of your names and seeing if a stronger development process and product lead to higher profits in the end. Good websites market themselves through word of mouth, and will require less attention and campaigning than a second rate service. This is an argument of quantity vs quality, and you will have to look to yourself to answer whether or not you'd like to offer high quality services or create a large quantity of less lucrative ventures, and then ask yourself which will be more reliable in the long run.

Quality Development is expensive. If you are constantly appalled by developer's high quotes, then chances are you haven't come to the table prepared to develop correctly. If domaining is your business that you want to make money from, then have a business plan. Know how much you're going to need to develop a good website before you attempt to squeeze cheap work out of unreliable sources. Web designers and developers charge accordingly for a highly specific and honed skill set. There is an art to coding and designing well, and very few developers who charge cut rate prices are very concerned about end-user interaction and ease of use. It takes experience to develop websites in an outstanding manner, and if you want your website to be outstanding instead of acceptable, then you should be willing to pay for someone else's experience, or be willing to invest a considerable amount of time into doing the work yourself. A great website with a terrible design still looks like a terrible website. Don't be scared to splurge on contracted work to give your name the complete package.

Sometimes nothing is better. If you find yourself bummed out because you have a domain that sounds like it would make a great development opportunity, but can't find a good option for development, try putting your resources into something else. Maybe you have a shoe related domain, and there are already too many shoe stores online, or Zappos would pummel you into the ground with their amazing customer service, but you can always take the money and time you would've spent developing that name and either market it harder or develop another. Maybe after you sat on your development idea overnight it doesn't seem as glorious as it did yesterday. That's ok. You can find a new opportunity, or step up your domain sales. At the end of the day you could end up saving yourself a few bucks on hosting fees that would've been wasted. In exploring development ideas, you may figure out a new way to market your name, or you may spark a new idea for a different service that could be lucrative. You may also discover competitors that may be willing to purchase your domain names in order to expand their own exposure. The old saying stands, "If you can't beat 'em, join 'em."

The bottom line is that when considering development, take your time and be smart about it. Don't rush into an idea. If you've got your plan ready, then take the time to do it right and finish it completely, or be prepared to pay someone to develop your idea properly. If you don't have the money, or you don't have the idea, you may be better off just selling your name to someone that does. Be smart about everything and always ask yourself along the way, "Is this something I'd want to buy?" If you take your time and develop a great idea and a great website, you'll be sure to add value to your domain and your net worth when it comes to sales time.
 
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