What You Need To Succeed in The Domain Business – Part 2Posted: September 30, 2011
As Sharon explained in Part 1, you need a lot more than a mere interest in domains in order to succeed in the domain business. Knowing how to find and get quality sellable or monetizable domains is only half the battle. Many people entering the domain business enjoy searching for good domains but don’t succeed like they expect to and wonder why they’re stuck in a hobby instead of a business.
If like most domainers, you’re buying domains to flip them and make a profit, you’ll find it’s not easy. Unlike real estate, which has a fairly defined buyer’s market and few surprises, many great domains sit on the market for years without selling.
What factors contribute to a domain’s ability to sell?
- The value the domain could bring to potential buyers in branding, SEO or marketing efforts.
- Lack of other good options for potential buyers for their particular needs.
- Lack of red flags or potential issues with the domain such as possible trademark infringement.
- Exposure to potential domain buyers in general.
- Exposure to potential domain buyers in the domain’s industry or niche.
- How apparent it is that the domain is for sale.
- How reasonable a listed price is to a buyer (either to buy at or consider submitting an offer).
- Whether the price of the domain is fixed or negotiable.
- How well the seller negotiates with potential buyers.
- The trustworthiness of the buyer and/or security of the transaction.
As you can see, only a few of these factors actually involve the quality of the domain.
Some of the other factors are fairly straightforward to improve. To increase exposure or otherwise try to reach potential buyers, here are some steps you can take:
- You can list your domain for sale on all the major marketplaces such as Afternic.com and Sedo.com.
- Indicate your domain is for sale in its whois information (name or address area)
- Put up a “for sale” page on it or park it at a parking provider that can put a “for sale” notice on the page
- Advertise it for sale in online communities where people involved in the domain’s industry or niche go to.
- Network with contacts in the domain’s industry/niche and see if they may know of any potential buyers.
- Contact owners of other extensions of the domain or of similar domains (make absolute sure your domain doesn’t potentially infringe upon a trademark if you do this).
- Contact advertisers on Google and other sites for terms pertaining to the industry or niche (best if it’s advertisers on the exact term of the domain).
Other factors are more difficult to grasp. Knowing the right price to put on a domain takes years of experience, with limiting your focus to only certain areas and types of domains shortening the process. However, understanding good negotiation strategy upfront can help you know what to price your domains if you can determine the minimums you would accept for them.
Here are some tips for handling offers/inquiries and negotiation:
- Always be prepared to negotiate whenever you receive an offer or inquiry on your domain. Most sales take some amount of negotiation.
- Find out who the potential buyer is if possible. A serious buyer with ample cash to spend may pay a higher price than another domain reseller or a small entity without much money to spare.
- If you receive an offer below your minimum price, consider countering with an offer that is at least as much above it so that “middle ground” falls within your acceptable range.
- If you have multiple interested buyers, indicate that to each of them so they’re aware they may lose out if they don’t increase their offer or respond quickly.
- Come down in price gradually as the potential buyer’s offers come up. Go down to your minimum price only if you feel the negotiations will fall apart otherwise.
- If you receive a reasonable initial offer or counter offer within your desired range, it’s always safer to accept. Understand that countering may result in a lost sale.
- Never burn opportunities completely with a potential buyer even if they are way off in price. They may want the domain more than you think and may approach you again later to pay a higher price.
These are lessons that domain resellers often learn through years of trial and error. Understanding these things can help you maximize your sales, allowing you to earn steadier income, grow your portfolio easier, and build your domaining hobby into a successful career.