In the video:
00:47 – Is .com still the best?
01:29 – Steer clear of THESE
02:00 – Making a serious offer
03:41 – Stay mindful of your manners
05:15 – When it’s time to buy
05:51 – What you can expect to pay
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James Schramko here, and today I’m talking about how to buy a valuable domain.
I’ve had lots of really good .coms in the past, a lot of two-word domains like SEOPartner, TrafficGrab, and KickingBack.com – some great domains that were already taken when I wanted to use them, so I bought them secondhand.
“Be cool when you’re bidding.”
Sometimes you’re lucky, you can pick them up at auction, and that’s great. You just got to remember to be cool when you’re bidding. Also, sometimes people have them for sale, and you’ll see a lot of these sites sitting on a broker’s site, where someone’s hoping to make a big profit. So this video’s just to help you to basically buy a domain at a better price.
A few things here. Firstly, is .com still good? I think it is. I think it really is the king of domains, and it’s great to have the .com. If you can’t get the .com, sure there are other options. But you’re probably still going to be driving traffic to the .com version. There’s a few examples: Basecamp, LeadPages, ProBlogger – all of these sites didn’t have the .com at some point, and one of them still doesn’t, and it can be a real problem.
If you want to get some basic information on how to value a domain, I recommend DNSalePrice.com. You can go and have a look at the criteria for what makes a domain valuable. Sometimes it’s how old it is. It could be how brandable it is.
Avoid the trademarks
And just on that, please don’t buy domain names that have trademarks applicable to them. Do a trademark search when you’ve got a great domain that you think you want to use, because if you buy someone’s domain that’s trademarked, for example if you bought iPhone.com, then you’re going to be told to stop using that domain, so it’s not worth buying that. Quite often, those domains are sitting, available for purchase, for an unsuspecting buyer.
On making the right offer
If you are dealing with a broker, then there’s a way to go about that. I’ll get to that in just a sec. If you’ve got a private seller or someone’s got the domain redirected somewhere, or they don’t seem to be using it, look up the Whois information and then contact them, and make a reasonable offer. Like a serious offer, not $50. Quite often, a two-word domain is going to cost you thousands of dollars or tens of thousands of dollars. So a good offer, like a thousand dollars, is a nice “Hey, I’m serious and I’m not wasting your time” type offer. You don’t want to go in too low and be cheeky, or they’ll just not take you seriously.
“Make a reasonable offer.”
On the flipside of that, you don’t want to be too desperate as well. You don’t want to be following them up too much. Once you make your offer, you wait for feedback. Don’t follow up or chase up. It’s a sign that you really need that domain.
“You don’t ever want to appear desperate.”
Also, if you happen to be trying to buy a name that’s the same as your name, so if you were trying to buy PeterSmith.com and your name’s Peter Smith, you might want to get someone else to buy the domain for you, because you’re going to be paying a premium if it’s obvious that that domain is the only domain for you and there’s really no other choice.
Which kind of leads me to the next thing. Create competition. If you can be bidding on a few different domains and you don’t really mind which one you get, then that’s ideal, because it puts you in a stronger position than if you have to have that domain. It also means that over time, if you’re patient, one of them will become available. I went through that process when I bought SpeedDash.com. There were a few similar domains, and I actually ended up with a few of them. I ended up with SmartDash, SpeedDash, and I’ve got valuable domains that I can resell for a profit.
The other thing is, always remain polite in your dealings. When people are selling, they don’t want to deal with an aggressive, or antagonistic, or inexperienced buyer who’s making threats, or ultimatums, or throwing their weight around, or pretending to be important when they’re not. The sellers have seen all of that behavior before, it’s not appealing. If you really want to get your domain, just be polite. But don’t be emotional about it, don’t be desperate about it, take your time with it.
When you have a deadline
A couple of other things. If there is a deadline for the seller, that can help. So for example, if someone’s listed their domain for sale and they haven’t really had any offers for a long time, and you come along, you represent fresh blood. You’re an opportunity for them. But if you also need to make a decision by a certain time, and you’re going to disappear off the market for good, it’s OK for you to convey that to a broker. Just say, “Look, here’s what I’m prepared to pay for that domain, this is what it’s worth to me. I do have other domains that I’m looking at as well, and I really need to make a decision fairly soon on this. So if you’d like to get your instructions from the seller, that would be useful.”
Finally, understand that with some broking companies, they have minimum sell prices. They can’t sell it for under, sort of $500 for example, it’s just not even worth someone listing their domain with a broker if it’s a low-value domain. They’re not even going to accept it as a listing. Companies like Afternic, they don’t want $10 domains. So if a domain is on a proper brokerage, they probably have an expectation that it’s going to sell for a fair amount.
Now, if you do happen to be successful and you’re going to buy the domain, I recommend you use an escrow service, which simply means you get the buyer to put the money in and then you can exchange a little more securely than sending say, PayPal, where the buyer might send the money, put in a dispute, but keep the domain. So be careful with that. Anything over a thousand dollars, you want to start thinking about some kind of protection or deal with a reputable company. I’ve never had a problem with it, and a lot of the top-level brokerage sites are pretty secure. But always be careful, and avoid getting ripped off.
Setting price expectations
A final thing, if a domain’s listed for $5,000, you could probably expect to pay somewhere around two and a half thousand dollars. If it’s listed for $10,000, you might pick it up for around $5,000. The rule of thumb that I’ve found, if you are polite, if you have competition for your order, and you have a willing seller, you can probably buy it for a little bit less than what it’s listed for.
And on the flipside of that, if your business is worth a million dollars to you in the next few years, like SEOPartner.com was for me, it’s OK to pay a little bit more. In that case, I think I paid about $500 for that domain, so I did really well from it. But there’s other domains I’ve paid up to $5,000 or $10,000 for, and I believe those domains could be built out into substantial businesses and worth a lot more, but I could easily get my money back for them. So think about that, hopefully it’s useful. If you got any questions, just post it near this video and I’ll see if I can answer it for you.
By the way, if you want some coaching, check out SuperFastBusiness.com. I’m helping people all the time buy domains and how to figure out what the value is and strategically what the best domain to offer would be.
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