On the heels of publishing the story about my career highlight with Newswire.com, I felt it’s only natural to write a follow up post about the realities of domain investing.
In that article I mentioned about my $400,000 sale of MyBlog.com back in 2004. And someone on Twitter thought it was absolutely crazy it sold for that much.
And I absolutely agreed. It was a moonshot and I hit it.
Ironically the buyer was also a domain investor and typically domain investors are cheap – speaking from experience. But he was also an end-user with immediate plans for the domain so I was able to land the high price.
Had I not known this, I wouldn’t have completed the deal.
Below you’ll find 6 mistakes domain investors make which lead to inconsistent, lackluster sales.
6 Things to Avoid When Making Domain Sales:
- Not Knowing Your Buyer
- Not using Escrow or other Intermediary for LTO (lease-to-own) Transactions
- Not Having a Final Price Sheet
- Not Immediately Doing Something With The Domain
- Not Sticking To Your Expertise and Chasing Trends
- Not Following Up With Prospects
Below I explain more about each and the specific mistakes I made and lessons learned.
Not Knowing Your Buyer
In the case of the MyBlog.com sale, I knew who the buyer was. I knew his intentions and I knew he just recently sold his company. So he had capital and was determined to acquire this trending domain.
Now obviously you won’t always know who your buyer is but if you use or create a system where you can get pieces of information, that is key.
You’d be surprised at how much information you can get from an email address.
Here’s some tips from an article I wrote 13 years ago at the Warrior Forum (popular marketing forum from back in the day)
My Mistake: In another recent deal where I sold ShieldPro.com for 5 figures, I was lazy and didn’t do my due diligence on the buyer. Turns out they do 100 million in annual revenue. Had I did my research I could’ve figured this out.
Lesson: If you have a system that captures some of your buyer’s information, use it to always do your research. It will pay off.
Not Using Escrow or Other Intermediary for LTO (lease-to-own) Transactions
“Lease to Own” transaction on your own – I’ve done several LTO deals privately, meaning it was based on trust on both ends but mainly on the buyer’s side.
I sold FollowUp.com on an LTO plan and payments were made via PayPal and the deal completed within a year. This was my last successful private LTO deal.
My Mistake: I had a six figure deal for OneCrypto.com fall through because I messed up. It was a private LTO deal, payments were direct wire payments.
And the DNS was managed by myself. Unfortunately, that’s the mistake I made because I inadvertently ran an operation in my domain management tool that updated the nameservers for this domain.
And I nor the buyer did not know until a few days later as he was on vacation. He got upset his site was down and apparently it caused issues due to users not being able to connect their wallet to the site, etc. The deal was off.
Lesson: Stick with Escrow.com or other platform that manages LTO transactions. They will also handle the DNS and nameserver settings for you.
Not Having a Final Price Sheet
You need to price your domains. Not in public but in private in an organized spreadsheet. On that sheet you should include at least the following: price paid, date purchased, desired sale price, minimum sales prices, previous offers.
More recently over the past couple of years there were many deals that never completed due to my stubbornness (and greed). But the reality is most domains will never hit the moonshot price.
My Mistake: I got a six figure offer for TRST.com a couple of years ago to which I quickly declined. In retrospect, had I created my pricing sheet, I definitely would’ve taken the offer as it would be within my minimum asking price.
Lesson: Create your Price Sheet and rid yourself of the mental anguish of thinking you’re leaving money on the table.
Not Immediately Doing Something With The Domain
I was guilty of this for many years. I would register a domain or purchase one from GD auctions and just let the name sit parked.
That’s a terrible process for selling domains as you make it difficult for buyers to make an offer.
My Mistake: There were a few times recently I did this and buyers had to go through Godaddy’s broker. The downside to this is you don’t know anything about your buyer at all. Which goes back to point one above, know your buyer.
Now I have a bulk management system where I can just enter in a list of dozens of newly registered domains and within minutes a custom landing page is created on OnlineBusiness.com.
Lesson: Get your domain showcasing it’s actually for sale. A custom domain management system is great but you don’t need one as there are good options nowadays like Efty.com, Sudos.com, etc.
Not Sticking To Your Expertise and Chasing Trends
I’m guilty of this even nowadays. And I attribute it to my shiny object syndrome. I get distracted with the next new thing.
It’s human nature so it’s smart to be prepared when that voice in your head pops up and says go register a gazillion domains on the next hot topic.
But don’t get me wrong, chasing trends are fine so long as you know your hard limit.
Similar to the Pricing Sheet, know how many domains or how much money you’re willing to invest in a trend.
My Mistake: Back in 2021 I registered hundreds, probably close to a thousand domains with “NFT” in it. To this day, not one sold and I let most of them drop.
Lesson: Stick with buying domains in topics you have expertise. In my portfolio I have hundreds of domains related to GPT and Ai.
I’m not yet an Ai expert but it is my focus for the next several years and indefinitely. I made some pretty decent sales with GPT names so far.
Actually I had another moonshot deal a couple of years ago with ChatGPT.com (yes I was the first registrant of this domain) – but I will save that story for another time.
Not Following Up With Prospects
My Mistake: I used to believe if a company or person wants a domain name badly enough they will follow up with me.
But since following up with leads consistently I’ve proven that wrong.
The way I view an inquiry nowadays is that just because they inquired doesn’t mean they are interested enough to make a deal happen.
That’s my job as a domain seller. To be proactive and help them close the deal.
So more recently I’ve followed up with leads that were months old and closed a few deals.
Lesson: Follow up. Even if it’s a low sales conversion it’s definitely worth the effort, especially nowadays you can create automations with canned emails so it’s literally a few seconds for each follow up if doing it manually.
Bonus Tip:
Don’t register bad names. Ok so this one’s an obvious one but need to put it here because many of new domain investors get this wrong. And if you get this wrong you have no hope in making sales.
The scope of this topic is for another article but if you’ve registered hundreds of names and haven’t even made one sale, I wouldn’t say give up, but stop registering names and give it some thought as to what makes a good domain name.
But if you have decent names and are making sales, try to implement some or all of the above tips and likely your sales rate and average price per domain sold increases.