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* Profit from Domain Names! Money Making Resources!Use Site Map for more articles / info. ( E n j o y ! )
Once you've read the Special Report below, be sure to check out our links to some great money making, time saving Resources, plus some top quality Domain Industry info. You'll find all those 'Industry Insider' Tools at the end of the page on this link: DomainNewsHub Money Making Resources! DomainNewsHub ~ SPECIAL REPORT ~ Part 1Understand and Profit from Domain Names
First things, first.
Some basics - Domain Name Registration
Just in case you didn’t not know, Domain Names are registered for various ‘optional’ periods of time (example 1, 2, 3 years etc). At the end of the current registration period a domain name must be renewed, otherwise it becomes available for anyone to acquire, i.e. Register.
You never really own a domain name, you just control it for as long as you decide to pay the renewal fees. When the renewal is due you typically receive an email informing you of this.
Acquisition / Renewal Fees have, to date, been quite reasonable. At the time of writing, typically $9 is what I’ve been paying to acquire / renew a top level domain name, eg. .com, .net, .org, .info. Sometimes it might cost less - especially if you register the name for two or more years. (Tough competition general acts to keep this cost reasonable).
At the time of writing (Spring 2007) the prospect appears to be opening up for Domain Registration Services to consider charging variable amounts depending on the ‘quality’ of the domain name you hold. So if – for example – you are fortunate enough to have registered a short ‘Platinum Grade’ Domain Name that would be snapped up for a huge sum in the Secondary Market (see below) it could transpire that, in the future, you are faced with much higher renewal fees for as long as you hold on to that Domain Name.
The Secondary Domain Marketplace
The ‘primary domain marketplace’, refers to the typical Domain Name Registration Process where you ‘think up’ and submit a name you fancy to a Search Engine used by one of the Domain Name Registration Services (see above) in order to establish if that name is available for registration. It is generally the cheapest retail source of domain names.
Given the difficulty a prospective buyer can often be faced with when attempting to come up with and register a ‘good’ Domain Name, a secondary domain marketplace came into existence to solve this problem.
The secondary marketplace is a term which relates, collectively, to the numerous locations where ‘pre-existing domains’ (i.e. domain names already created in the ‘primary marketplace’) are sold / transferred to those whose needs cannot be satisfied in the primary market.
This secondary marketplace is used not only by those who want a ‘Quality’ Domain Name to start a Website, but also by Domain Name Portfolio Builders, to search for and acquire single domain names (or entire portfolios) to supplement their existing stock of names. These Portfolio Builders can range from someone with just a couple of domain names, looking for one or two more, right up to huge corporate entities worth millions, who hold thousands of names for either income generation / capital appreciation, or both.
Domain Name Sales in the Secondary Market
Take a close look (below) at ‘just a tiny fraction’ of the domain sales that took place over the last year or two in the secondary market (i.e. where pre-existing domains are sold). This means that some of today’s ‘easy to come by’ names could easily be tomorrow’s ‘big winners’. Note that it’s not only the .com names, but also .net, .org, .info, .mobi, .co.uk, .us, .eu, .tv etc., that are often capable of achieving astonishing prices.
(Part 2 of this article continues after the following examples)
Example Domain Name Sales (without websites) over the last year or two.
Interesting stuff!
Part 2
Where have all the good names gone?
Where do you imagine all the good domain names have gone?
Anyone interested in buying or selling a domain name will undoubtedly find the following information (recently obtain from data produced by Verisign, the Global Registry Officer for .com & .net) extremely revealing.
New .com and .net registrations in 2006 amounted to over 69 thousand PER DAY!! Registrations in the last quarter of 2006 represented a 17% increase over the same period in the previous year (2005).
Close to 11.6 million new domain names were registered in the last three months of 2006. That amounts to a 23% increase ‘quarter over quarter’. Taking 2006 as a whole, well over 10 Million ‘new’ domain names were registered each quarter of last year (Note ‘new’)
At the end of 2006 there were over 120 Million Top Level Domain Names!! That’s a 32% increase over the prior year, and an 8% growth over the 3rd quarter of last year (2006).
Now consider this quote in March 2007 from (the prominent and highly recommended) DNjournal:
‘‘In the past seven days, we saw the most five figure or higher sales we have ever seen in a single week - and not just a few more than the previous high - dozens more’’ !!!!
DNjournal March, 07. (DNjournal.com)
Here’s a few more interesting facts:
Add to the above the controversy surrounded the recent trend of ‘domain tasting’ whereby certain Domain Registrars have themselves been seeking to capitalize on potentially lucrative Domain Names identified / monitored during the five day grace period at the beginning of a registration period, and you have yet another pressure on the available ‘pool’ of Quality Domain Names.
Could 'YOU' make money from Domain Names?
The pace of the domain market really seems to be hotting up. If you’re at all serious about locating ‘quality domain names’ with great potential for appreciation, you need to keep your eyes wide open for bargains. Be prepared to put in the hours, and move fast when the rare chance to ‘bag a bargain’ comes along
An astute buyer (even one who only wants a single domain name to build a website) realizes that investing in a good domain name, is a sound and sensible move. When purchasing a .com domain, the buyer will frequently also try to secure the remaining variations of the same name. For example, he (or she) will often look to buy the .net, .org, .info versions etc., of the name too.
The same domain name - but with, say, a .net extension - might for example be used by the holder to direct more traffic to a website he / she created with the .com extension. Alternatively, the .net, .org or .info, extensions of the name may simply be ‘held’ to prevent competitors (or traffic pirates) using near identical domain names to undermine an expensive ‘brand name launch’, or to hijack prospective visitors trying to reach the holder’s .com website.
If it’s not possible to do so at the time of acquisition then, although the .com purchase will usually still go ahead, the buyer may later approach the holder of the other ‘extensions’ with an offer.
Although deliberate ‘cyber squatting’ is inadvisable, finding yourself in a position where you hold one or more domain names of obvious importance to another enterprise, trading under a near identical domain name, undoubtedly proves rewarding to some. A quick ‘low key’ financial settlement (i.e. name purchase) by the enterprise with a commercial interest in the domain, is frequently a more prudent solution for that enterprise, and attracts less negative publicity than might result if legal action was taken against an alleged cyber squatter. It can also work out cheaper, than attempting to gain control by complex and costly legal means.
I mention the above points to illustrate the fact that, domain name buyers often need to think ‘outside the box’ (excuse the cliché) when consider the potential value of domain names they are offered the chance of acquiring, but which are not necessarily .com extension domains.
I hope we’ve established that it’s now ‘official’ - good quality domain names are a rare and sought after commodity.
How to spot good Domain Names?
I’d like you to take a moment to consider the ‘‘quality’’ of the names shown in the table of recent domain name sales that I’ve included. (Note that the ‘prices’ detailed in the Recent Domain Name Sales’ Table are not for websites, they relate only to the domain names mentioned).
The table of recent sales details a ‘mere fraction’ of the domain names sold on the ‘secondary market’ over the last 12 to 18 month.
Now, forgive the ‘repetition’, but it’s important that I reinforce the fact that the domain names shown in the recent sales table are just a ‘tiny percentage’ of the total recorded name sales on the secondary market. Thousands of additional name sales have occurred in that same period (and similar sales continue to occur every month). I’m referring to sales where the prices paid are equally as spectacular, and have frequently exceeded ‘thousands’, ‘tens of thousands’, and even ‘hundreds of thousands’ of dollars (USA) / pounds (Sterling). Even sales where the price reaches a million, or beyond, appear to be occurring more frequently.
By the way, when I talk about ‘recorded sales’ I use that expression quite deliberately, because many more of the domain names sold in the secondary market during the same period, were the subject of special contracts called ‘non disclosure agreements’ typically entered into to ‘cloak’ the astronomical prices being paid for domain names. (Price tags which would otherwise embarrass or compromise the buyer / seller or, in some cases, upset shareholders).
Knowledgeable Buyers rarely settle for domain names that don’t convey, or at least indicate, the nature of the activity undertaken by the website that the name will be used to provide an ‘internet address’ for.
Nor are they inclined to go for names that are too long, consist of words that are hyphenated or hard to spell. Or words which have alternative spelling options that might confuse. There are exceptions, but such names can make a website harder to find. Domain Names that are hard to find when entered into a Search Engine like Google can loose a business valuable traffic, which translates to a reduction in sales or other opportunities.
Shrewd buyers also tend to focus mainly on Top Level Domain Names (TLDs) such as .com .net, .org, .info, and increasingly .biz. A ‘TLD’ suggests a certain level of prestige. It implies a ‘global’ enterprise, rather than one whose activities might (perhaps unfairly) be perceived as limited in ‘reach’. For example, restricted to the country suggested by a national domain name extension such as .nz.
While this may not seem very relevant to a fledgling enterprise, online success can often occur at a much faster rate than predicted. A wise buyer who takes this into account will often find his (or her) ‘virtual real estate’ better positioned for quicker expansion, easier re-sale, or both.
There are, however, certain exceptions. In some cases a domain name with a country code can command a very high price (you’ll see some examples in the table of ‘Recent Sales’). Which I guess, supports the notion that identifying good domain names is sometimes more an ‘art’ than a science.
Website’s with the above mentioned Domain Name ‘qualities’ tend to gain lots of traffic. They often become ‘highly valuable assets’ because the traffic figures attract advertisers, and therefore advertising revenue. High traffic ‘commercial’ websites sell more products, more service packages, more subscriptions etc. A Website benefiting from a strong self explanatory domain name, plus a TLD extension, will also typically enjoy lots of ‘word of mouth’ referrals. Such Websites tend to attract traffic rapidly, which means that, very soon, they can be offered for sale with a high price tag.
Some of the most sought after Domain Names relate to the most lucrative areas of web activity. They can therefore be used to launch websites seeking to exploit the huge revenue potential that exists in those ‘high traffic’ areas. Qualifying domain names are in strong demand. Major areas of web activity include: Computers, Software, Property, Insurance, Music, Antiques & Collectables, Gambling, Ancestry, Golf, Auctions, Employment, Travel, Computer Games, Art, Health, Money / Investment, Dating, etc.
Strong Domain Names that fall into these and similar categories can surely only go up in value.
Valuing your Domain Names
There are a number of Services willing to provide a Valuation / Appraisal as to the possible worth of a domain name. Some of these services are offered free of charge, whereas others ask for a fee. Sedo offers such a service which they charged for, and can serve as a useful indication of what a Domain Name is worth. I would advocate great caution over placing reliance on a Free Domain Name Valuation. You may wish to avoid having your Domain Name valued until you receive an offer for it. In this way, you do not incur the expense of the Valuation until you at least know you have some real prospect of selling it. To find a valuation / appraisal service enter the term: ‘’Domain Name Valuation’’ (or try replacing ‘Valuation’ with ‘Appraisal’ ) in your favourite search engine - prefixed with ‘free’ if required.
How to exploit the value in your Domain Names
To obtain some return from your Domain Names you could try parking them for free at one of the many traffic sites, who then share the parking revenue with you. Maybe you’ll choose to do that at a website like Sedo where – at the same time (and for no ‘up front’ cost) your names would be visible to professional domain name buyers who might, in due course, make you a good offer for some of your names.
It need only take one or two good sales, to cover the cost of assembling an entire portfolio of Domain Names. (You would, of course, have to pay Sedo their commission on any sale).
You could also look to offer some domains for sale on alternative domain industry sites such as Monica, Afternic etc. In addition, you can also sell (or buy) Domain Names on auction Sites such as eBay, or try seeking out buyers in Domain Name Forums.
Another marketing option would be to create a profile of your likely ‘end user’ and, armed with the information / ideas it throws up, try to locate a buyer either directly, or through their Industry’s Publications, Forums and Web Sites.
Assuming you’re looking to sell a Domain Name, rather than derive an income from it (and further assuming that your likely purchaser will want your Domain Name to create a website) then a ‘Parked Domain Name’ can be easier to market. This is due to the fact that you can give the prospective purchaser some idea of what a website linked to your Domain Name might look like by including a link in any ad / marketing material. This has the effect of making the Domain Name (a somewhat intangible entity on it’s own) appear more ‘real’ and solid.
Another possibility is to create a website for your Domain Name using one of the many easy to use site creation programs that are not very expensive, require no html knowledge and little technical skill. (You could also try using the Site Builders than often come free with Web Hosting Packages). You can then sign up to Google Adsense and / or a few ‘free to join’ affiliate schemes, and put any revenue generated as a result, towards covering your domain name renewal fees. In the meantime, your ‘good’ domain names will, hopefully, increase in value.
Another option open to you is to swap / barter Domain Names with others in the various dedicated online Domain Name Forums.
By the way, you now also have the option to rent or lease a domain name to someone for an annual fee. (At least one prominent online website has recently started to act as an agent for those looking to lease their domain name/s). If this interests you, enter: ‘’Domain Name Rental’’ and / or ‘’Domain Name Leasing’’ in your favourite search engine, and check out the results.
I gather than another income generation ‘angle’ revolves around selling / renting the email addresses that often come free with the acquisition of a Domain Name. I’ve heard rumours of a few people doing this but can’t recommend it, as I’ve little knowledge, and no experience, in this area.
Of course, you could choose to do nothing with your domains, simply sit back and wait until the growing famine of quality names pushes up the demand / prices. However, while this may me a plausible tactic for some owners of massive ‘professionally financed’ domain name portfolios to adopt, I would not recommend it. To stand the best chance of success I would urge you to be pro-active in the monetization and / or marketing of your Domains.
Escrow Services
When selling a Domain Name (with / without a website) it is prudent to consider using an Escrow Agency Service. These services act as a kind of stakeholder / broker, collecting the purchase price from one party, and presiding over the final stages of the transfer for the other. This is to ensure that the transaction concludes to the satisfaction of both parties, and in accordance with the agreed terms and conditions of sale. It also removes the issue of what should happen first, i.e. the transfer of the Domain Name or the payment of the purchase price (along with the risks that attend that issue). The escrow agent will take a commission for the work involved in this. The seller should take account of this and factor all, or part, of this cost into his / her asking price.
On a parting note, don’t forget to consider any capital gains, income tax or similar issues which engaging in the sale of Domain Names may give rise to.
I hope this information has proved interesting and useful to you, and wish you every success in all your endeavours.
Good luck and best wishesMartinps Don't miss the links on DomainNewsHub's Money Making Resources Page to some great income enhancing, time saving Domain Industry Tools & Info. While efforts have been made to ensure that the content of this article is accurate at the time of It’s creation (spring 2007) the author does not accept responsibility or liability for any errors, omissions or inaccuracies contained in it. Nor for any loss or damages suffered by any reader or third party relying on, or acting on, it’s content. Readers should make their own checks before relying on, or conveying, information contained in this article.
While you are welcome to link to this Article from your Site, reproduction of the Article may only occur with the witten consent of the Author. The author can be reached by email - go to 'Site Map' Page then visit the Contact Page for details.
© 2007 International Copyright M A Taylor (All rights reserved). The information contained herein may not be reproduced, quoted or conveyed in whole or in part, by any means whatsoever, without prior written authority signed by the copyright holder.
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About the Author:
Martin Taylor is a keen observer of the Domain Name Market and manages numerous Domain Names.
His website domainnewshub.com to some great income enhancing, time saving Domain Industry Tools & Info.is dedicated to those looking to make money from Domain Names, and includes News, Tips and Resource Links for operating ‘smarter’ and more efficiently in this area.
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