Bloggings of a Domain Flipper

Estibot before you buy

I haven't mentioned this yet on my blog so thought I would do a quick post about Estibot. If you haven't heard of it before, Estibot is a free automated domain name appraisal tool. The first thing to understand is that the price estimate Estibot gives you will be wrong. Don't expect this to be the real value of the name as it's an automated system so has a difficult time calculating name-value.

What estibot does a great job of doing is giving some useful link popularity stats and keyword popularity info. In general this tool will save you from going to five or six different websites when all the information is here in one place.

I use Estibot before I purchase a domain to gain a better understanding of what kind of traffic the name gets through search engines as well as important information like Alexa Rank and word frequency in Google.

When I started domaining, I would visit Alexa, Google, and Overture all individually. Estibot will let you get all this information in one place. As I've said before it's important to use the Way Back Machine on Archive.org to understand the history of the domain as well. When buying a domain name, you want to make sure that you're making a wise investment. By doing the proper research you can save yourself from making any foolish investments.

.Com vs. .Net vs .Info - The TLD Showdown

I recently found a great study comparing .com vs. .net vs. info sales. This is very useful information for determining the realistic selling price of your domain if you know what the corresponding .net, .info, or .com sold for. In general the results were very much along the lines of what I was expecting. Below is a summary of the results from the entire study with a sample of some of the comparisons used.

.Com vs. .Net: On average a .net will sell for 12% of the price that a .com will sell for.

.Com vs. .Info: On average a .info will sell for 2% of the price that a .com will sell for.

huge.com $106,050
huge.net $3800 3.58%

sex.com $12-14M
sex.net $454,500 3.50%

freecellphones.com $60426
freecellphones.info $165 0.27%

casino.com $5500000
casino.info $20899 0.38%

Chinese.com $1,120,008
Chinese.net $180,000 16.07%
Chinese.info $37,111 3.31%

So how can you use this information to benefit you? Well just hop on over to DNJournal.com and take a look at their domain sales page. Here you can see if any domains sold for which you have the corresponding .net, .info, or .com. You can then use the average to get a ballpark figure for what your domain is worth.

If you can't find your name on DNJournal, you can always use NameBio to type-in your name and see if any corresponding TLD sales are available. This can be an essential tool when trying to figure-out the always difficult question of, "How much should my domains sell for?"

Do Domain Appraisals mean anything?

I feel like I'm hearing more and more that domain appraisals are not a good indicator of a domain's true value. A Senior Member on Domain State recently said,

"Unfortunately, those certified appraisals (from godaddy and all other companies) aren't worth much. Most of the time, they are quite inaccurate." [See Link]

Certainly not the first time I've heard a comment like this. I've always been a bit hesitant to put much of my budget towards appraisals. I think that domains have a different value based on who's looking at them. If it was my life dream to open a Canary Zoo, then CanaryZoo.com has more meaning to me than most people. If, on the other hand, I'm a domainer trying to make a quick buck I might shell out $20-$30 for this name as the name itself has little meaning to me.

So I'd like to take a poll. Please leave a comment with 1-2 sentences about your thoughts on domain appraisals - are they a good idicator of a domain's actual value? It would be very interesting to see what a sample-size of 40 or 50 domainers would yield. I don't want to bias it so I'll stay-out of it for now!

Category Showcase Showdown

I've decided to do another side-by-side test of Sedo vs. Afternic. A while back I took a look at the difference between Sedo and Afternic's HomePage Featured listing. Sedo generated more traffic to the listing by a longshot.

This brought-up the issue of traffic quality. Some people from Afternic wrote-into the blog to explain how their system differs in the type of traffic each domain gets.

The question is a valuable one to answer: do listing upgrades increase the likelyhood of selling your domain name?

I've designed another experiment, this time with two domain names: CollectWealth.com and PhoneSounds.mobi. Both of these are great names that I've decided to make available at a lower minimum offer price than usual. This will hopefully encourage as many bids as possible so that I can compare Sedo and Afternic on the number of bids the listing receives on top of just traffic (my previous name was a high-priced fully-developed domain - FrequentFlier.mobi).

This time we will be able to better understand how the number of visitors corresponds to the number of bids made on a listing. We will clearly be able to see if, with less traffic, Afternic can indeed encourage more bids through higher-quality traffic. Sedo, oftentimes challenging as your name becomes a needle in a haystack I'm sure will be able to attract more visitors, but it will be interesting to see how many bids it generates.

Both PhoneSounds.mobi and CollectWealth.com will be category featured for one month with both Sedo and Afternic. I'll report updates on a weekly basis and give a full report of my findings at the end of the month. I hope that these experiments can help new domainers make educated decisions before spending money on listing upgrades.

Stay tuned!

Understanding Keyword Search

Great post on Elliot's Blog about the importance of keyword searches for domain buyers. Definitely a must-read for new domainers trying to understand more about how domains are valued. [ READ IT NOW ]

Also important to understand keyword popularity when running Google Adwords or other avertising campaigns. This ties in very closely with my recent post "Know your visitors - Without Spending a Dime". When tracking visitors to your site with StatCounter or Google Analytics you can also see what keywords were most popular for getting to your domain. This is very useful in optimizing your domain for better search engine rankings.

As we've heard time and time again, what you don't know can hurt you. In the domain world it's certainly not this dramatic but what you do know could help you make more money with your domain, and that's worth a lot!

New Thoughts on New TLD's for 2008

Unless you've been living under a domaining rock, then you know that ICANN is announcing some new TLD's for 2008 like .travel, .cat, .job, and .xxx to name a few. There has already been a lot of discussion on this on all of the domain name forums. A state of confusion is forming: what has come into question now is how diluted the TLD market can get. Time and time again we see that .com is the king of the hill with no contenders within miles.

The reason for .com's popularity is very simple; most internet users only know about .com, .net, and .org. However 99.9% of the sites the average user visits, are .com sites. While .com is the original TLD and value is also created by scarcity (i.e. every one-word name is taken) the biggest win for it is that the web consumer (or user) doesn't know about any other TLD's.

What do you think the chances are that someone looking to buy a car would type, buycar.cc or buycar.mobi, or buycar.us? Almost nobody. With so many new TLD's being introduced there is a chance that over time another TLD could begin to contend with .com. I'm not saying this year, or even next year, but years from now. The only way this could happen is if another TLD became commonplace for your average web user. The day that someone who wants to buy a car tries both buycar.com and buycar.net or buycar.us is the day that .com will start to see some real competition.

When you look at domain name sales on sites like DNJournal.com it's clear as day that right now, no TLD stands a chance against .com. Some large .mobi, .net, and even .co.uk sales have made me think more and more about what the next big TLD could be.

Like stock investing, I think it's important to keep a diversified portfolio, that way, when the new contender to .com appears, you'll be there to profit. This doesn't mean you should just register any .cat, .travel or .xxx names you can, but if you can nab a few gems early on, (don't worry about selling them) then you stand to profit later on.

If you told me in the mid-90's that Netscape would not be the #1 browser and Internet Explorer would take over, I would say you are crazy. Then, in the year 2000 if you told me that FireFox would be the most popular browser, I would also say you are crazy. The point here is that strong trends can and do change. The next big TLD will emerge and while it might never trump .com, it will do nothing but help to grow the domain industry and expand the awareness about the value of Online Real Estate.

Know your visitors - without spending a dime

As a domainer one of the most important pieces of information you'll need to keep track of is the visitors coming to your sites. This is particularly important for flipped sites that you are working to improve their search engine placement and monthly traffic.

On top of simply understanding how many people are visiting your site, it's important to understand how they got there. This is the #1 way to really pin-point your return on investment for any advertising that you are doing for your site. Supposed you're paying $50/month to run a banner ad on a popular website (in reality will probably be a lot more than $50). Months go by and you think that your advertisement is paying off. Visitors are coming to your site, buying your product, mission successful! Look a little closer. It's important to look not just at your total number of monthly visitors but also where those visitors are coming from. If you notice that 90% of your traffic comes from a Google searches then you know you can kiss that ad goodbye and save your $50. If on the other hand you can see that most of your traffic does come from your advertisement, then you know it's working.

Too often businesses will spend a fortune on marketing, see sales increase, but fail to understand what really caused the lift. Your websites are your business, become an expert in your visitor, understand who it is that visits you site, how long they stay for, how often they come back. By better understanding your visitors you can continue to improve your site and get more and more of your visitors coming-back for more.

When looking at visitors to your site - make sure you pay careful attention to unique visitors. This will give you a good idea of how many different people are really looking at your website.

So how do you track all of these useful statistics? Well GoDaddy and some of the other hostings services offer traffic-tracking, for a monthly fee. This can get very very expensive as your number of domains increases. GoDaddy charges $1.99/name to do visitor tracking - with 100 sites this would cost you an additional $200/month just to track your visitors!

Not to worry. There is an incredible free (yes you heard that right) visitor tracking service called StatCounter.com. Sign-up is quick and easy and you can track a number of useful statistics about your site by simply inserting a small snipped of code at the bottom of your page. StatCounter will also show you things like how your visitors got to your site, how often they come back, as well as which pages are the most popular.

Tracking your traffic will you understand your visitors better, which in the end will increase the value of your investment. By using StatCounter you can save what could be hundreds of dollars in monthly fees while still getting all the information you need.

Way Cool Domain Research

For those new to domaining I thought I'd write a quick piece of researching domains. If you are looking to buy a domain that already has traffic or an existing website, you'll want to get an idea of how valuable the name is. This means you need to take the time to understand the domain as if it were your own.

How many different websites have been on the domain?

How has domain traffic changed over time?

What is the current customer coming to the domain for?

And the list goes on. The idea here is that you need to make an educated decision when buying a pre-existing name. One of the main tools I use for researching potential purchases is WayBackMachine. This is an amazing tool that has archived websites from 1996 up to today. This means you can see every website that has been on a domain including when updates were made.

This is certainly not the only tool you'll need in your arsenal however is one that should definitely be one of your first go-to's. If you see that this is the first website on the domain and it was just put-up 1 year ago, then you know that if the seller is trying to get a higher price for the age of the name, this won't fly.

Other things to pay attention to are Alexa ratings and checking to see if a site is listed in DMOZ. Do a quick Google Search, is the site easy to find? I won't detail all of the different tools here, but you get the picture. It is absolutely crucial that you do the proper research before investing in a new name. What you don't know could leave you with a lemon of a name. But remember, as any flipper knows, if life gives you lemons, make lemonade!

Monetizing your Flips

One of the most important concepts I discuss in my book is monetizing your flips before selling the domain. Monetizing your name usually means adding Google AdSense or any advertisement of your choice on your pages and most importantly - getting people to visit your domain.

I have heard from a lot of new flippers say that they are disappointed to find that all of their domains aren't worth thousands of dollars. A domain name is an asset, and domain flipping, just like house flipping is making the name attractive to potential buyers.

If you look at the two elements that make-up just about 95% of a domain's value the first is name-value. Is it a name that will get traffic purely from people typing the domain name into their browser. Websites like cars.com and investing.com are great examples of names with incredible name value. It might sound like I'm stating the obvious but it's important to understand why these names are so valuable. Cars.com is valuable because it is most likely what people would type into their browser when looking for a car online. This not only gives the name a high-volume of traffic but also gives targeted traffic. Targeted traffic is the only traffic that matters as this translates directly into dollars.

The second element of a domain's value is traffic. You might be thinking this is just the same as name-value, but it's not. This is where domain flipping comes in. A name like ILoveToSki.com has terrible name value. Nobody in their right mind is going to enter this into their browser window. Thus you can expect this small gem to get 0 hits a month.

Here is where I think there is a lot of confusion about domain flipping. Just putting a website on a name like this will not suffice, you need to go further. I have heard from so many people frustrated with spending a lot of time building a website on a domain only to find-out that nobody would pay for it. You need to get organic traffic coming to your flipped sites and provide content that makes users want to come back for more. This is why flipping is a whole lot different from parking. You can park hundreds of pages in an afternoon, but flipping more than one name at once is a big project.

I usually only flip one name at a time and this process can take anywhere from one week to a month. In the end though I like to emerge with a domain that can generate hundreds, if not thousands of hits a month. This takes time. It's that simple, the time window for a typical flip should be between 3-4 months, not 3-4 days. A site that has a regular user-base, links in all the major search engines, an ALEXA rating and new unique visitors turn your domain name into an asset.

For those trying to make a quick buck, this might be heartbreaking news. For investors like myself this is the only way I have ever found you can make over 1000% ROI in 3 months time. Unlike stock investing, or house flipping, domain flipping does not require a lot of cash up front. Instead domain flipping uses a much more valuable asset, your time. Remember the famous quote from Field of Dreams, "If you build it, they will come." Well build it and bring in those visitors, it's time to flip!

Buying and Selling Domain Names on Domain Forums

There are a number of different ways you can sell your domain name. Just like the traditional real estate market, the online real estate market has a number of ways to connect buyers and sellers. The standard way of selling your names is through a listing service like Afternic, Sedo, or Snapnames. While these services do provide a great system to listing a large quantity of domains for sale, your domain names are easily lost in the mix. Paying for extras like "Featured Listing" or "Category Featured" will only decrease your net profit.

What is really comes down to is having a good name. A domain like math.com or web.com will sell anywhere you put it. These one-word dot com's and recently one-word .mobi's, .net's and even some .us names always command attention. But guess what? Most domainers don't have names like this. There are a select few that have these five to six figure names, instead the current race is for the four to five figure names.

Unfortunately, when you list your names on a major listing service like Afternic or Sedo, it is easy for your domains to get lost in the pack. Suppose you own skiadventures.com and list it with Sedo in the Sports category under Ski. Well there are 15,200 names in this category - how does your name stand-out?

What it comes down to is who looks at your listing. Is it a serious buyer? A domain investment company? Someone just interested in domains? With big listing services you may get 100 people to look at your listing, but of those only 2 were looking for something related to your domain. The problem is that you may get people to look at your name, but not the right people. Earlier I did a comparison of using the "Featured Listing" option with Sedo vs. Afternic. Sedo brought more traffic to my listing than Afternic by a longshot, however neither listing enticed a bid.

Domainers are constantly looking for an opportunity to get in front of the buyer that has a real need for their domain. Some domainers have been successful at emailing a buyer after a sale and offering names of similar category or theme. Other domainers list their names for sale on their own private listing page with a focus on a particular type of domain. By advertising this site, you know that anyone who clicks on your ad is someone looking for the type of domain you are selling. A great example of this is www.geneticsdomains.com.

So where do forums come into the picture? Another way to sell your domain is through a domain forum site like dnforum.com or namepros.com. These sites offer area's to post names that meet a certain criteria such as "Priced Above $100" or "Domains with Traffic". This is a nice way to ensure that at least one quality of your domain is something that the buyer is looking for. If I am searching for a developed website already making money I can drill-down directly to a section displaying only domains with developed websites. This type of specificity allows for names to be seen by a more targeted buyer.

Domain Forums are a great way to get your name in front of a smaller yet more targeted audience. But beware, there are scams everywhere within these communities. Many times a seller will list a domain for sale, accept bids, maybe even auction off the name only for the final buyer to realize that the seller was not the domain owner! The same can happen to a seller who takes the time to list a name, reach a final price, get paid for the name only to find-out later that it was a stolen credit card or invalid paypal account.

What I'm saying here is that domain forums are a great way to promote your domains, but you have to be careful. This is like walking from Rodeo Drive down to South Central. On Rodeo Drive you can't afford anything but there are a select few there willing to spend a fortune if they find what they want. In South Central everyone is looking for a good deal and you have to watch your step to make sure you aren't robbed or cheated. It is unlikely that your domain will sell for more in a forum than through a listing service. Buyers on a domain forum are looking for a good deal and if they don't think they'll get it, they won't buy. This means that many domains are underbid by hundreds and sometimes thousands of dollars. It is up to the seller to compare their name to other similar names sold to ensure they get a fair value for the name.

I always suggest a diversified approach to selling domains. List your names with multiple services. Post names for sale on Domain Forums and make custom websites for your names. To sell a domain name you have to be proactive. Too many people think they can just list their names with a domain listing service and their names will sell themselves. If you haven't already, put on your sales hat, in the end it's your money we're talking about!