In a world where most all real “one word” domains, in almost all major languages, having any possible commercial value are already parked or being used for a real web site, how do you speculate on potential resale profits without paying a fortune to someone who already owns the domain you have interest in? Making things tougher, how do you obtain such domains, without paying a king’s ransom, in a prestigious extension, such as .com, .net, .org, .eu, or .co.uk?
In this article I review some of my own real world experience in domain speculation, and offer advice that will hopefully save you some time, as well as help you avoid wasting your money. By no means am I suggesting that my approach is the only way to proceed successfully. Far from it, there are numerous approaches that have actual or potential merit. I merely posit one potential strategy among many that may prove useful to you.
In spite of the fact that virtually all one or two word, commercially valuable names in prestigious extensions are already registered, the domain market is not a “seller’s market.” Actually, it is not a “buyer’s market” either. This apparent paradox devolves from the fact that even though such a high percentage of really good domain names are already registered, sellers parking domains for resale in general are unrealistic in regard to their price expectations. Thus, what could be a seller’s market if domain owners were more reasonable in general is in reality a “stalled market.” The sad fact is that in order to obtain a really valuable domain that is already registered, there is a high probability that you will have to pay more than you can later sell it for.
To understand just how “stalled” the domain resale market is, if you registered say 100 fair, but not great quality domain names, and advertised them for sale, you might get one or two lowball offers per year. Assuming you were paying $10 per year for each domain to keep them inforce, you might break even. Not a lot of value for the time spent, to say the least.
The above considerations point to three critical factors you have to take into consideration if you wish to be successful as a domain reseller:
- You need to focus mainly on unregistered domains, as opposed to buying them in the secondary market.
- You need to be realistic in your asking price.
- You need to focus on a small to medium number of really good names, instead of a massive quantity of mediocre names.
The Big Conflict
A quick mental review of the above material presents an apparent conundrum. High current value commercial names are in general registered and too expensive to speculate on, and fair to low quality commercial names will get very little action. So how do you proceed with any hope of being successful?
Basically, the answer (or better put, one answer) is focus on the future. If you do some investigation, you’ll find out quickly how difficult it is to obtain an unregistered domain that is of high enough quality to turn around quickly at a big profit. This is because virtually all of the domains having high current commercial value are already taken.
A solution, but of course by no means the only solution, is to think in terms of what might become valuable a few years down the road. You will of course be wrong in a high percentage of these speculations, but even one or two winners can pay for a boatload of losers and leave you with a handsome profit.
So Now What?
There are numerous ways to approach future oriented domain speculation. One of the best, and most enjoyable, is to focus on a topic you already have an interest in. Instead of remaining a casual aficionado, become a real guru on the topic. Read books, study relevant web sites, and perform other kinds of research relative to material that focuses on emerging developments in your field of interest. This approach is especially effective in topics that are subject to rapid and frequent advances in underlying technology, such as medicine, computer hardware, communications and networking gear, environmental protection, and home electronics, just to name a few.
Another approach is to look at the question more broadly, and perform search engine queries on phrases like “emerging developments”, “best new product ideas”, “design award winners”, “future trends”, etc.
Regardless of which approach you use, it’s important to be careful not to register a domain name for a product that is already trademarked, as the trademark owner may be able to unilaterally confiscate your domain without compensation. The trademark database at uspto.gov can be of enormous help in this regard. If there is a “live” trademark for the name you are considering registering, you will be at obvious risk of potentially losing the domain without remuneration.
None of us are smart enough to guess what acronyms might become important in the future, although if you keep very current in a particular field, you might be lucky enough to register an important one in a prestigious extension before someone else does. I view this scenario mainly as an occasional stroke of luck, as opposed to a strategy.
Another point is that even if a single real word domain is not commercially important now, there is still a very high chance that it is already registered anyway. Thus, the best approach is to focus on short, two “real word” domains, in prestigious extensions, having high potential future commercial value. Even domains in the quality extensions having two real words that are of high current commercial value are for the most part taken. This may surprise some people, thinking that only the great single real word domains are mostly registered, but it just isn’t true (if you don’t believe it, try and find a good current commercial quality two real word domain in a decent extension, and you’ll be unpleasantly surprised).
An article like this wouldn’t be complete without some examples to back it up. In this section, I highlight a sampling of domains from my own portfolio that I registered using the principles discussed above.
LaserDiagnosis.com – While hardly a brand new technology, it is growing in importance, and may be of value to a medical practice or device maker as a forwarding URL to their branded web site (i.e., capturing and redirecting type-in traffic). Note the use of two real words (one of them short), and the prestigious .com extension.
OpticalRam.com – This is a pure play on the future, which may or may not pan out. Technology to produce optical RAM already exists, but not on a basis that is commercially viable yet (i.e., inexpensive enough to compete with traditional flash memory). If technology to produce ultra-fast optical RAM advances to the point that it becomes competitive with flash memory, this could become another very valuable type-in redirection URL. Note again the use of two short real words, and the high value .com extension.
Oranjestad.tv and Roadtown.tv – Oranjestad is the capital and most important city in Aruba. Aruba is a hugely popular tourist destination, and Oranjestad attracts wealthy shoppers at its many malls, boutiques, and shops. Roadtown is the capital of the British Virgin Islands, an extremely popular vacation resort. Roadtown boasts restaurants, hotels, charter boats, cruise ships, shops, and more, all catering to wealthy visitors with money to spend. Both of these domains are bets on the convergence of TV and the internet. The .tv extension is not prestigious yet. This is because the morass of hardware and software required to implement internet enabled TV is so complex due to compatibility problems. Consumer demand will drive makers of the required equipment and software to adopt standards that make the components easier to integrate. At this point, internet enabled TV may become standard fare, just like the telephone or the radio. Domains like Oranjestad.tv and Roadtown.tv could then become very valuable, since these locations attract so many well heeled tourists. A site owner could place informational content on them like local news, restaurant guides, descriptions of and directions to main attractions, etc., and charge high fees for ad placements. Visitors staying at hotels in these locations, as well as people considering a vacation there, would naturally navigate to domains with these names on their internet enabled TV’s, as they are authoritative sounding and easy to type in. An especially attractive feature of both of these domains is they contain only a single word.
SexNoveller.mobi – This is another play on the future, although not as speculative as OpticalRam.com. “Sex Noveller” is Scandinavian for “Sex Novel.” While the .mobi extension is not yet of high prestige, it will become more so as portable computing becomes more powerful and commonplace. I’m placing a đăng ký kubet that some portable devices with internet connectivity will eventually have high contrast viewing screens for book reading (like the Sony Reader or Amazon Kindle). If this occurs, a web site with this name would be like a killer app if the content (paid eBook downloads) and functionality were up to par. Sex related domains are some of the busiest on the internet, and are especially easy to commercialize with a good domain name and high quality content. As usual, note the use of two real words (non English in this case), and an extension with high potential future prestige. As a side note, the domain Sexnoveller.se (.se is the extension for Swedish domains) sold at a Sedo.com auction about 18 months ago for $17,000 USD. Not bad.
I could go on with other examples, but I think you get the idea. The important principles to take away are:
- Speculate, but don’t speculate wildly. You should have a sound, logical basis for believing that your domain may have real future value.
- Keep things short. Your domain name should be easy to type in, and two word domains should contain at most one long word.
- Focus on extensions that are currently highly prized, or have reasonable expectations of having high future prestige.
- Find the right balance between focus and broadness. Your domain should be specific enough so it instantly communicates what the site is about (focus), but not be so topically narrow that it would attract few visitors (broadness). These are the kind of domains buyers will pay up for, especially if they can be easily monetized via e-commerce or paid ad placement.
I hope this discussion has been of some help to you in focusing your strategy for domain acquisition and resale. As mentioned several times, this approach is hardly the last word on the subject, and there are other approaches that have equal merit. Whatever approach you ultimately settle on, it’s most important to look at the realities of the internet domain marketplace. You need to employ a strategy that permits acquisition at reasonable prices (mainly unregistered domains), focus on types of unregistered domains where you can actually build a portfolio over time (two word domains as opposed to one word), and hone in on short domain names that can easily be monetized (at least possibly in the future).
I wish you the best of luck in your endeavors.