While my intention with this site, developed.nyc, is to promote .NYC usage and discuss news relevant to the geoTLD space – I love learning and talking about domains in general – even .coms which aren’t disappearing anytime soon!
For those of you who are new to buying domain names (e.g. .coms, .nycs or .whatevers) – especially considering investing in them, there are a few key resources that you must check out and there are some names in the game who have some great advice.
DomainSherpa.com – A weekly vlog with interesting and entertaining interviews with big and small investors (usually a panel of 3) as well as those in related fields. Media Options (Drew Rosener and Tess Diaz) took over Domain Sherpa after founder Michael Cyger moved on to pursue other projects). I especially like the few interviews with Ali Zandi (his tips helped my sales – gmail Streak extension and concise email wording) and of course the videos with Domain Shane are just entertaining, relaxing and positive.
Domain Name Wire – A weekly podcast hosted by Andrew Allemann who usually recaps the week’s domain related news followed by an extended interview with a single guest connected with the industry. Andrew always asks probing questions to get to important information and invites a nice range of guests onto his show.
DNAcademy.com – Michael Cyger has put together many resources to help new and experienced domain investors learn about all the business. I am not receiving any benefit for mentioning this course but anyone who has watched Domain Sherpa while Michael was the host can see that he is extremely genuine, wanting to help and that he’s a true professional.
DSAD.com – Domain Shane and colleagues blog a little about the industry and post lists of domains going to auction. Their blog posts are entertaining and positive and I have registered many of the .coms from their lists.
NamePros.com – Buy, sell and discuss domains. It’s a forum so every perspective is represented and it’s a wealth of information with some heated discussions.
It is true that the above resources are focused on how domain investors can make a return buying .com domains and that there is a bias against new gTLDs, non-.com domain names because investing in these may be riskier. While I love .nyc domains (and invest in them) making money investing in them is a slog and not for everyone – it’s difficult and definitely a risk. In fact I wrote about it in my article, “An Investor’s Experience with NYC Domains for 4 Years“.
While I ❤️ .nyc domains more than many, I like to think I can consider multiple perspectives, be open to learn other people’s perspectives and also consider real data and sales information (my own and other’s). As I’ve been reading advice online, targeted at new domain investors recently, I thought I’d throw my hat into the ring and leave some tips myself.
Below I’ve listed some of my positions and advice to new domain investors.
- Learn as much as possible about whatever you’re thinking about investing in (domains or anything) before you start buying.
- Do not believe a single source (website or “domain guru”) – entertain multiple differing opinions.
- If anyone tells you it’s easy – they are deluded, lying, stroking their own ego or trying to benefit by profiting directly from you or indirectly by protecting or boosting their own investment.
- There is no quick way to riches in business or domain investing – if there was everyone would be doing it.
- Start small and only invest what you can afford to lose – if you find success you can scale up. Reinvest profits to fuel more investing to continue a successful strategy but always keep in mind that a good thing may come to an end.
- Trying to get all the money on the table (max potential) when selling domains (or any other investment) rarely happens. Don’t get hung up on getting 100% if you feel you’ve got an offer to 80-90% and it’s a return you’re satisfied with. Getting a high % of max value may allow you to reinvest, continue the strategy and earn more by a string of investments that may not have been possible if you held out with the first.
- Do not measure yourself against the perceived success of other notorious domain investors. While these folks may inspire you to do better – do they really give you the “how”?
- Mike Mann may sell 7 domains for $120k that he paid $10k for (often his buy prices are $7-$100 and he’s flipping for $20k+) but do we know the amount he pays in renewals for the unsold domain names?
- Rick Schwartz was definitely well positioned for the opportunity to pick up domains in the 90’s for $100s of dollars and later flip them for hundreds of thousands if not breaking into the millions, but could he repeat his success in 2019? Starting from scratch?
- Domain investing is a business – work smarter and not harder
- Keep great records. Consult your accountant before tax time about records you need.
- If your work with domains can be considered a business and not a hobby, you may be able to expense an office (% sqft of home), partial utilities/home repairs/insurance, all office supplies, partial depreciation on electronics (computer, cell phone) and of course domain renewals, hosting and registrations (see your accountant about if domain purchases/initial registrations are to be expensed or inventoried as assets on your balance sheet).
- If you have a business (it doesn’t have to be an LLC or INC, you can be a sole trader) then you should have a separate business bank account.
- Sign up with Wave, waveapps.com and they can import transactions, make it easy to create invoices and email clients (even with a link to pay by credit card if you choose – they take a very small percent for this) but their service is free for the main functions and it’s easy to export and print your accounts before visiting your accountant. I am not receiving any benefit from mentioning Wave but I used to use QuickBooks and it was overkill and overpriced.
- If you have regular W2 income from a full time job, and if your domain business makes a loss for the first few years, you may be able to offset that loss against your W2 income and potentially increase your tax refund (by reducing your taxable income). Making a loss for a few years may put you in a position where the IRS considers what you do is a hobby and not a business and you may have to prove that you are materially invested in the business and that there’s a reasonable likelihood that the business will make a profit in future – so keep this in mind and please do speak to your CPA about this.
- Track your own sales, purchase and renewal cost data. Reflect regularly on the data several times a year.
- Keep track of domain inquiries that come in that do not result in sales – you can always reach back out to these potential buyers or if they reach out to you in future you’ll know exactly where the negotiation stalled including the price being discussed.
- Expect that even with a large and carefully curated domain portfolio, you may still only sell 1-3% of your domains each year.
- Registering a domain or bidding in an auction for a domain is just the start. There are important steps that you must take after you register a domain or win an auction.
- After you register a domain, win a domain name auction or receive a transferred domain from a domain seller you should prepare it. One step is setting up a splash page if you intend to sell the domain – maybe with a price, make offer form etc. Efty.com make this easy. They have plans starting at $6/month, but after signing up you add the new domain to your Efty account and then update the nameservers at your registrar (where the domain lives) to ns1.eftydns.com and ns2.eftydns.com. Within 24 hours, often much sooner, when you visit your new domain you’ll see the customizable for sale page. Potential visitors and buyers will see this and know instantly that the domain is for sale.
- You should also list your domain on marketplaces but keep in mind that you should adjust your prices for the ~20% commission that these marketplaces (e.g. Sedo and Afternic) will take. It is worth noting that if you sell a domain through the Efty splash page (someone actually visiting your website) you will not give up any commission – you get the full sales price – but you also have to hold the buyer’s hand through escrow.com or PayPal payment. It’s also worth noting that although sites like Afternic and Sedo take ~20% in commission they do publish your domain for sale across their network. I think that this is a huge benefit especially with Afternic who once you list your domain in your account with them, when folks search at GoDaddy (the place most people go to register a domain) those people will see your domain at the top promoted as a premium listing which can have an effect on sales.
- Do not be tied to domains that you *know* will not be profitable. Drop them if you don’t receive any interest.
- Be careful about your domain name settings at registrars. You may want all your domains “locked” to reduce the likelihood of theft – but do you want them all set as “auto-renew”? Do you know when the auto renew will happen? Do you know the price that they will auto-renew at? Take control and plan. .nyc domains at GoDaddy are $19.99 to register, but renew at $39.99, meanwhile I can register .nycs for $11.99 at Dotster and transfer .nycs to PorkBun for $21.99. Planning can save you thousands of dollars.
- Regularly look for cheaper registrars to move your domain names to. Usually when you pay for a domain name transfer to a new registrar (e.g. from GoDaddy to PorkBun.com) you will receive an extension of the expiry date by 12 months. Often by transferring out you can benefit by saving money and not renewing the domain at the current registrar. TLD List pulls in most of the price information (registration, renewal and transfer) but look for coupons online and visit many registrar pages to see if you can get a better deal. Registrars when they have your initial business have little reason to give you a discount on the year 2 and 3 renewal prices, this is why sometimes you have to shop around. If you have a large enough portfolio of domains – reach out (call or email) different registrars and ask for special discounted prices for bulk transfers. Saving a few dollars on renewing/transferring thousand domains is $2,000 in your pocket.
- Although I have mentioned PorkBun above I want to single them out as a registrar who do not give bulk discounts but their prices are extremely fair and their margins are tight. If you don’t like the idea of moving your domains around between registrars every 12 months (before auto-renewal) then I highly recommend PorkBun because they do not see existing customers as easy targets and will not push the price up after the first year. This is another honest opinion from my experience and I am not being compensated for saying it.
- With the launch of new gTLDs (over a thousand new .keyword domain extensions like .toys, .nyc, .tech, .design) there may be an opportunity to invest in these – just like I have done with .NYC but they are much riskier than investing in .com domains. My advice is don’t do it but stay aware of shifts that are happening.
- In my opinion new gTLDs are still untested and there is a different level of risk and opportunity for domain investors vs. end users who will buy one new gTLD and use it for their business.
- Some gTLDs may disappear which can affect those who have built websites on those names. Also the renewal prices of gTLDs may increase dramatically and while it’s easy for a small business with one new gTLD to pay the extra $30/year imagine investing in 1000 new gTLDs and having to pay an additional $30 a year to renew them beyond what you were accounting for.
- My advice is to stay away from investing in anything other than .com but don’t ignore the reality that these alternatives may be attractive to end users. If you can can be strategic and have the time to uncover data, trends and opportunities maybe there’s some money to be made but accept the risk.
- If end users start opting for non-.coms (because the .com isn’t available or because domain investors are selling at prices higher that what’s feasible for the type of business) a movement towards non-.coms may affect the values of the portfolios of .com investors.
- I believe that non-.coms do offer endusers new opportunities to get a great sounding and feeling domain name that helps continue their brand. phone.tech, ferry.nyc, harrys.photos, apartment.rent, etc. AND I do not think that domain investors can expect success in investing in non-.coms. This is an important point that many folks bashing the new gTLDs refuse to understand or accept. gTLDs are not designed for domain investors, they are to increase the options for end users (businesses, organizations and individuals) who are looking to get perfect fit domain name for their business.
- I believe end users who register their perfect fit gTLD do not care about anything .com domain investors have to say to turn them against it. They do not care about search engines, awareness, the fact that the renewal price could go from $5 to $20, they are just busy building a business that probably isn’t primarily online and they are in love with their business and love the sound of their business.keyword domain name.
- The only strategic way to invest in keyword gTLDs in my opinion is to seek out common over-the-dot phrases like home.loans, vacation.rentals, childrens.toys, new.tech – but the problem is that many of these perfect phrase domains will be priced very high from the registrar and most likely have higher renewal prices. This scares me away from investing in them because the carrying costs per domain could be in the hundreds if not thousands of dollars. Potential end users will not be used to paying this and as they will be aware that .coms have yearly renewal prices under $10.
- gTLDs come in a few forms keyword TLDs (like .loans, .toys, .tech) and geoTLDs. I have found some success with .NYC which I truly believe is a different animal (even to other geoTLDs like .boston). There were few domain name investors in this space back in 2014 when it launched and there’s a nexus requirement that you must live or work in the city which limits the overall market for the domains while initially increasing the available supply of premium keyword .nyc domains names – this was helpful for those investing but also the .nyc namespace has grown organically – usage is everywhere across the city.
- I do not believe there is any certain way to profit from gTLDs other than those hinted at above: find over-the-dot phrase domains at reasonable registration and renewal prices and/or look for opportunities in the geoTLD space after some research and acceptance of the risks.
- Do not assume because you are investing only in .coms that you are likely to find success. You probably will not unless you research the heck out of your registrations and spend time looking at expired domain and auction lists.
- How to pick the right domains?
- Ok so this is the million dollar question. Ok in my case my biggest sale has been $15,000 with all other sales being under $10,000.
- Keep in mind as mentioned above, there is no easy way to make quick money in general. Dedicating time to learning about the industry will help.
- Consider the likely profit when looking through domain lists and domain auctions.
- Profits have two sides, the buy and the sell price – so avoid over paying for domain names. This is difficult because you have to gauge what is overpaying and that’s sometimes more of an art than a science. Also an art is the negotiation of the sales price.
- We live in an era where you can think of any color and any animal, put those two words together with “.com” (e.g. redcat.com or greensquirrel.com) and that domain will most likely be taken. So what does this tell us about the likelihood of finding a valuable, unregistered .com domain that we can register for $8? It’s unlikely.
- Many domain investors look at the drops (expired domains that may become available soon) but many of these never become free to register because they are picked up before deletion by the online auctions (GoDaddy Auctions, NameJet and Snap Names) who sell to the highest bidder.
- Even though it may be competitive, online domain auctions may still have some gems where over time you’ll learn to feel confident between about the spread (feasible highest bid purchase price and the likely value future sales price) for each domain. If you find domains in auctions that you expect to have a large spread, then those are low risk with potential decent profit.
- Now I could talk about some of the $20 .nyc domains that I’ve bought and later sold for $7,000 but those are currently outliers (in future I think I’ll see sales over $10,000 for many of these domains) but instead, I’ll share some more realistic sales.
- Many of the names I like are two words, ideally a phase/product/service.
- bestphonedeals.com paid $262 (NameJet Auction, 4 bids) I think I overpaid which equals more risk, but I sold it 6 months later for $1,250.
- recordkit.com paid $8 + $12 fee (GoDaddy Auctions – “closeout” so no auction competition just clicked “buy now”) I sold it shortly after for $258.
- copywork.com paid $525 (GoDaddy Auctions, with 19 bids so I know others like the name) I sold it within a year for $1,500.
- safetytesting.com paid $932 (GoDaddy Auctions, with 40 bids, again the bids are still a signal of the likelihood of a flip/resale/profit). A GoDaddy broker reached out to me within a few weeks – they had someone who offered $2,000 and I reluctantly accepted because there was another domain I wanted to buy. I really think that safetytesting.com could sell for $7k-$10k+ in future, but I made a quick $1,100 and got the chance to reinvest in a better domain.
- When I buy domains I am really looking to more than double (2x) my money but look at the difference between the 12x return on recordkit.com and the 2x return on safetytesting.com – safetytesting.com still made me a higher $ amount despite a lower return.
- In many cases a $20 .nyc may sell for $1,000+ which is 50x on the investment.
- The above is a sample of .coms I bought and sold in auction, below are some domains I bought in the last two weeks at GoDaddy Auctions. Al have been closeouts or domains in auctions with zero bids that I liked (I think there was an additional $12 fee on each:
- moredefined.com – paid $10, exercise/abs website
- gamepattern.com – paid $10, templates, levels for platform games or even textile/wallpaper/t-shirt designs
- learnpositivity.com – paid $10, I’m trying to! I like the sound of this domain
- originalchamp.com – paid $10, such a great, catchy name. Who wouldn’t want to be the original champ?
- There are many other names I can share in the comments if any one would like to know more purchases, but I am definitely capping my risk by paying only $10 + fees for these domains.
- Hopefully they give you an idea of some of the names that I think are profitable.
- Before you register or bid on domains search Google for the term, check the Wayback Machine (Archive.org) to see if there used to be a site on the domain and how big/small it was – or if it was parked without a site, also Namebio can show you if there’s a record of the domain previously selling and similar domains that may have sold.
- Watch auctions even if you don’t bid on them – it will help you assess value, risk and likelihood of profit – when you bid on other domains in future.
- Watch DomainSherpa and listen to Domain Name Wire and check out the auction results on Domain Shane’s website DSAD.com – there isn’t anything that shows more accurate real values after 50 domain investors have bid a domain to $652 and the domain is sold! So the last few folks in that auction think that there’s still meat on the bone to make a profit eventually selling the domain to an end user.
- I’m not the best negotiator, no background in sales and so probably do leave money on the table. Sometimes I still regret selling safetytesting.com for $2k – but I like to keep the money moving and this is also part of managing risk.
- While my spreads are never a $8 purchase to a $24,888 sale (like Mike Mann’s) I have a much smaller portfolio of names and I’m making nice returns overall while playing in a much smaller pool and having fun! I really think this is the best way to start.
- Here are a few other tools that may help you make better decisions in deciding how high to bid on a domain in auction or which keywords are trending or expiring.
- NameBio is a great resource that can show you history of sales and comps.
- Domain Name Stats – amazing resource, across all TLDs, showing new fresh registrations, registrations of domains previously registered and drops.
- Expired Domains – filter down across all TLDs to see domain names that may become available soon.
- GoDaddy Auctions, NameJet and DSAD are all great resources to view domains that were once owned and becoming available.
- Also another reminder – listen to Domain Name Wire and watch Domain Sherpa
Please don’t just listen to my advice. Always be skeptical of people’s motivations. If you anyone has any other advice or resources you’d like to share or think I should make corrections above, please comment below.