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Penguin Guide to Investing in Domains and Domaining

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Brad Spencer
November 27, 2008


Brad Spencer

This article originally appeared on:

http://investindomains.org/penguin-guide-to-investing-in-domains-and-domaining/

Brad Spencer has written 3 articles for DomainInformer.
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Penguins have a way of making it through even the most adverse conditions. Think the North Pole… not an easy place to survive.

The World of Domaining can also be a tough place to thrive. That’s why this guide is called the Penguin Guide to Domaining. Because, just like the Penguins, we are going to learn to survive and thrive in this world.

Warning: This is a No-BS Guide to Domaining. After reading this, you are going to have all of the info you need to start making money in the world of domaining. However, about 75% of you are going to keep reading, and reading, and subscribing to feeds, and reading, and you’ll never make a dime because you’ll never actually buy a domain. This is a guide for the 25% of you who want all the info- right now- so you can get down to making money and get back to your life.

Introduction: Why to become a Domainer

Right now is the best time to become a domainer. Seriously. Domains (especially dot coms) are getting eaten up. Good ones are hard to come by.  Everyday, domains are being valued at higher and higher prices.And, I am a firm believer in the fact that you should INVEST in markets that you understand. If you already dabble in the internet than you would be wise to invest in something you know a bit about.You’ll be doubly smart to get into domaining if you know anything about SEO.More about that up next…

Why Domain + SEO = Smart

SEO is not a new thing anymore. Almost anyone who does Internet Marketing knows a bit about SEO. Smart SEO’s are starting to realize that a domain holds a large part of the Algorithm that gets your site to show up on the SERPS.Here are a Few Reasons why Domains plus SEO is smart…

1. Age is a key factor

2. So is keyword density in the domain name

3. And, if you are looking for long-term success, you need a domain with some good branding.

So, SEO and Domains mix and make up a stellar combination.Alright… so you are all geared up and now you need to know how to find some domains to buy and get down to business.

Finding Domains

One of the keys (not the only key though!) is getting a good domain to start with. But, don’t just spout off and get any old domain and hope it’s going to sell. I just saw a guy the other say trying to sell a domain for lots of money simply because it had 4 characters. No, it wasn’t cars.com or even hats.com. It was ec3h.com. It is worth about $7, or whats known as a Reg Fee. (That’s short for Registration Fee).My favorite place to look for domains is Instant Domain Search. Like the name says, it’s instant. Once you use this, you’ll never go back.Some of the other factors to consider when getting your domain portfolio going (and more pictures of Danny Devito and Penguins) are below:

Finding Domains: Register New or Old?

You can go both ways. Buying a domain that has no age is worth it if you come across a domain that is worth something standing on its own two legs. For example…1. The domain of a new sports team (or sport, or celeb, or drug, or type of land bird)2. The domain of a new prescription medicine or a variation on it3. Something you know about in your own industry that the rest of us don’t know about. (Personally, I think this one is best, or at least most likely to actually occur.)

Otherwise, I think it’s smart to buy older domains. That’s where the real SEO part comes in because an old domain is really going to ratchet up the value of whatever content you put up on the website.

You won’t find too many people out there telling you to buy old domains. They are just dumb or behind the times. If you are out there buying domains that have been registered since 2002 or before, you are going to be able to flip that thing for MUCH more than something you registered recently.

Finding Domains: Marketplaces

There are so many marketplaces out there for domains. The best one, by far and away is Sedo. It is a NO-BS marketplace that is a bit more expensive, but actually has some good domains for sale and will provide you some stats on it’s traffic and such.

I also have heard good reports about buying domains from people on Digital Point. Digital Point is a great forum for all things website’s and internet marketing. If you are ever there, you’ll recognize me by my pen name RawWebDesign. Say hello.

Finding Domains: How to Find AWESOME Domains

Everyone has to find their own method of getting good domains. For me, I use a patented method that involves a stuffed penguin, boxer briefs, and some deck glue. It’s a closely guarded secret that I’m not about to share here (sorry), but I will give you an idea of how you can begin to get your own method and style going.

For one- and I mentioned this already- but a great place to start buying domains is in the area that you know best. If you are a pest control person during the day, start digging around in that niche and see if you can come up with something that is popular in that niche but isn’t taken already.

My day job is a Penguin Trainer. As a Penguin Trainer, I have specific knowledge of lots of Penguin Training techniques that sell for hundreds of thousands of dollars. I bought up a lot of domains that should have been a lot more.

So my main advice would be to look around on the instant domain search and key in some of the main terms in your hobby, industry, or local area.

Finding Domains: Branding Vs. Keywords

I might disagree with a lot of domainers on this point. Truthfully, I think a lot of “goo” domains are worthless. Are you ever going to remember or key in this domain:?

  • http://www.Domains-Are-Great-4-You.com
  • http://www.Penguins-and-Penguin-Stuff.com

You should get the point now. Dashs and hyphens are OUT. Nobody uses them. Nobody types them.

Some people think that it helps the Search Engines to “get” the keywords. But trust me, the Search Engine understands that volleyballbook.com is volleyball book. They are pretty good at that type of thing.

Ok, so now you know what NOT to do, how about what you should do.

The best thing to do in domaining right now is to buy some domains that can be branded- even if they are a few words long. Think more along the lines of

  • oneandonly.com or
  • thisandthat.com or
  • twistandshout.com or
  • thiswayandthat.com

Three and Four word domains are wide open territory. And you can bet your penguin suitcase that twistandshout is going to sell for more than twist-shout-site.com or whatever bullshit the hyphen salesman are trying to sell you.

Finding Domains: Extensions

This is pretty simple. If you are buying a domain to ultimately park-n-flip that SOB, it needs to be a dot com. Simple. Sad, but true.

Soothesayers will come along and tell you that .mobi is going to be huge, or that .xxx is the next new wave. Don’t believe them. When it comes to type-in traffic, you just don’t see anybody typing in hotbabes.org.

On the other hand, if you are buying a site to BUILD OUT and capitalize on the SEO of a keyword-laden domain or an aged domain, then by all means get a .org or .net. I’d say .org because it’s more classy, but that’s just opinion.

A good dot org will get the same Pagerank juice as an old and good dot com but will cost one tenth the price. So, if you are going to build that sucker out and sell the site later because it gets mad traffic since you built it out with your slammin SEO skills then by all means get a .org.

Finding Domains: Expiring Domains

You can also find expiring domains. This never really interested me since when domains expire they lose their age, and if the domain name itself is halfway decent then the registrar is going to go “yoink” and steal the domain from the dumb-ass owner who let it slip out of their keyboard weary palms. Us little guys are just a step or so behind the godaddys of the world.
penguin domaining guide

Ordering Domains

When you find a good domain name and want to pull the trigger, you need to actually order the thing. It’s a pretty simple procedure except for the two main choices you can make at this junction which I’ll describe in a minute below.The best place to buy domains is 1&1. They are a great host, their dashboard makes sense, and they are way better than GoDaddy (which happens to be the only other host I’ve ever dealt with.)

Ordering Domains: Private vs Public Registration
You can register the domain publicly (IE, anyone doing a WHOIS search on the domain now has access to your address, name, and naked pictures of your 18th birthday party) or you can register the name privately.Private registration will just have your registrar’s info on hand and if someone needs to get a hold of you, your registrar SHOULD forward you the message.Even if a private registration costs a shade more, it’s a good move on your part.

Ordering Domains: How many years?

If you don’t mind renewing a domain every year I would just register the thing for one year.

Rumor Alert: I’ve heard through the grapevine that if Google sees you register your domain name for 5 years then it shows commitment and you’ll get more link love.

Just make sure to check your email so you know when to renew.
penguin guide to becoming a domainer

Making Money From Domains

One of the ways that online real estate is similar to “real” real estate is that you can make money from it while you are holding onto this investment. Much in the same way that you can charge rent to others while using your apartment, there are an (almost) infinite number of ways that you could make some ($) while your website waits to sell or grows in value.

Making Money From Domains: Parking

This is easy. You hand over your portfolio of domains to a parking site and they manage it all for you. The parking company is going to put up ads and take a chunk. Yup, and not a small chunk either.

Making Money From Domains: Adsense Site

Install Wordpress on your site and steal content (tongue firmly planted in cheek) or write your own and get some natural traffic. Then put up some adsense ads and make the loose change that will come in over time. It’s not much, but it *should* pay for hosting.

I will say, however, some people make insane amounts of money doing this, but chances are you and I won’t be one of them. Unless, of course you know something I don’t. If so, but all means write me ASAP.

Making Money From Domains: Build a Blog

This is what I primarily do. As you can see since you are reading this, I try to make blogs that are worthwhile, interesting, and give you value. How I am doing?

While I’m on this subject, if this article is helping you out, PLEASE link to me. It’ll keep the message going and eventually put a few more lattes in my stomach. So, I’d be very grateful to each and every one of you who could post this somewhere on their blog or website or whatever…

Back to the article- After you build a decent blog, you can sell your site based on income, traffic, or pagerank. I once built a hookah website, wrote a bunch of content over the course of a year, and flipped it to a hookah company since it got about 100 hits of organic traffic a day. I made like $650, which isn’t a ton, but if you had done that with 15 websites a year ago, you’d be looking at a damn good income.

Making Money From Domains: Hold it For Years and Sell As Aged

This can be a PLAN B for all of your website plans. Even if all your Blogs, Parking, and Adsense goes flat, you can always sell a website with a few years on it for some decent money.

Making Money From Domains: Do something blackhat

Once again, it’s important to realize that BlackHat is the only way to ensure long-term success in the world of Internet Marketing.

Making Money From Domains: Flip It

Buy a domain from someone who doesn’t know what they were doing, or someone that just needs to sell, and use your SEO skills to make their site worth more.

Just like flipping a house, but without the Asbestos Suit.

A very tasteful interview with a Domain Flipping Guru is here for your reading pleasure.

Making Money From Domains: Sell Links

You can build a decent site and sell links. To do this, you’ve really got to to have a decent site built with a decent PageRank.

Should you decide to buy or sell text links, you could use Text Link Ads. They are a great company that makes link buying and selling more accessable to non-nerd.

Making Money From Domains: Create a Wiki

This absolutely isn’t going to work, but I wanted to give you an idea of some of the silly stuff that people will think is going to work to make a website valuable. No one is going to create your content for you.

Making Money From Domains: Start a Social Network

See: “Create a Wiki” above.

Making Money From Domains: Make Your Own Way By Learning

Spend a few hours a week (at least) going over Digital Point Forums, Sitepoint Forums, and making contact with other Internet Marketers to learn the ropes.

Why not write me, right now, and see if we can’t work together on something. Go ahead and write me RIGHT NOW. My email is rawwebdesign at gmail dot com. So go ahead and write. NOW.

penguin and domainer guide

Keeping Domains

To eventually cash in on your domain investing, you are going to need to keep hold of those suckers somehow. Yup, this part can be a bit tricky.The good part is, your competitors have to deal with the same tricky issues, so let the difficulty work in your advantage by weeding out competitors for you.

Keeping Domains: Autorenew

Yeah, a lot of people swear by the autorenew. Personally, I don’t use autorenew for the same reason that I don’t use automatic bill pay… I like to know when my checking account is being touched. But for those of you who aren’t as anal about their funds being moved, Autorenew is a safe way to keep hold of your little treasures.

Keeping Domains: Order for lots of years

I covered this a bit earlier, but if you can afford the initial investment of buying a few more years at the onset of your registration, you are going to need to worry a lot less about renewing the registration.

However, if you buy a 5 year Reg and sell the domain after 2 years, you bought three extra years for the buyer than you really needed to. It’s just something to consider.

Keeping Domains: Don’t Go Broke

Plan and budget and don’t spend too much or you’ll have to sell before your domains “ripen”.

Keeping Domains: Don’t Quit

You aren’t going to see a HUGE return immediately. Heck, it might look like you are LOSING money for the first few years. But investing can be like that. So don’t fret.

If you plan correctly, you need to stick to the plan and don’t quit.

Keeping Domains: Don’t Buy Too Many

Make sure you have a reason for each one you buy. Most domains are not worth the registration fee- and the Reg fee is something you can never get back.

Fees are not investments, Fees are Fees.

Keeping Domains: Don’t Buy Too Few

It *usually* take a large portfolio to make you some money unless you own some great domains or plan on building a dozen domains out into thriving websites.

Unless either of the above is true, you are going to need to start a decent sized portfolio and keep it growing to really make some money.

Just hit the forums and marketplaces and wait for good, undervalued domains to come along.
penguins and domainer guide

Selling Domains

This is the last main section of this wholly informative and (might I add without tooting my horn) awesome little domaining ditty.

Story: I was once reading a book about Warren Buffett, the greatest modern Investor. Warren Buffett said: “Think about a burning theater. The only way to leave your seat in a burning financial market is to find someone to take your seat, which isn’t easy.” Sonow you take that idea and reverse it, and you want to sell your domain while the play is just getting good… that’s when you’ll get the most for your domain (and seat in the metaphor).

Selling Domains: Have a For Sale Link

OK, so like a lot of people, you could just place a “This site for sale” link in a visible place. I know it sounds simple, but this can really work. Plus, if someone types in your domain to see if it’s taken, they can get in touch with you more easily.

Selling Domains: Write people in that industry

Sickly Hot Tip Alert: Honestly, I shouldn’t be sharing this. It’s so simple, but geez does it work.

The amount someone can pay for your site is a function of how much they can make from the site. Therefor, your best idea is to find someone that stands to MAKE the most money from your site. That’s why when I decided to sell my hookah blog, I emailed a bunch of hookah sites that sold hookahs and who could stand to benefit the most from the traffic. I got a buyer in days and for more than you would expect if it sold to a general buyer.

Moral of the story: Sell to the person or group who could make the most from the domain and you’ll get paid more.

Selling Domains: Put in Marketplaces

List your domains for sale all over the net. I would use Digital Point Website Marketplace forum or Sitepoint. But hey, maybe you know a better place yourself too.

Selling Domains: Make it Good Enough That People Want to Buy

It all comes down to this. You can’t trick everyone. You really really need to have a site that deserves to be sold, has value, and can make people money to get ahead in this business. The point of this industry is to find ways to make websites good enough that people want to buy enough of the time that you can make money.
guide to becoming a domain owner

Conclusion

I’m not exactly sure how to conclude this. It depends how you use the knowledge I’ve just given you. I think I’m going to refer to what was written at the start of this whole article.

After reading this, you are going to have all of the info you need to start making money in the world of domaining. However, about 75% of you are going to keep reading, and reading, and subscribing to feeds, and reading, and you’ll never make a dime because you’ll never actually buy a domain. This is a guide for the 25% of you who want all the info- right now- so you can get down to making money and get back to your life.

But before you dive into finding a domain, do me a favor. You read this, and hopefully learned something or at least enjoyed yourself. If so, please help me spread this article around and make the few days I spent on this worthwhile. Please digg this, or link to it, or tell someone about it, or do whatever you can do to spread the word.

Also- make sure to sign up for the email updates to our domaining news. You can sign up right at the bottom of this page.

Gratefully,

Brad

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Submit Your Articles or Press ReleaseAdd comment (Comments: 2)  
Title: RE: Marc December 7, 2008
Comment by Brad

Thanks for your opinion Marc. I guess this just helps to show that there are many different approaches to this business, and the more information that is available the better.

However, I do think it is important to avoid labelling different people's methods as "cybersquatter" or anything else. The moment you label something and assume you disagree with it is the moment you stop learning. And I think we all want to learn, right?

Title: Domaining November 27, 2008
Comment by Marc

I started reading your article because I thought it would be interesting. I stopped after a few paragraphs and lost respect for you because you are basically suggesting that people register domains that are trademarked or celebrity names. Below is a quote directly by you.

"You can go both ways. Buying a domain that has no age is worth it if you come across a domain that is worth something standing on its own two legs. For example…1. The domain of a new sports team (or sport, or celeb, or drug, or type of land bird)2. The domain of a new prescription medicine or a variation on it3. Something you know about in your own industry that the rest of us don’t know about."

I would consider you a cybersquatter and not a domainer. It's unfortunate you think this is ok and I suggest you grow some new ethical standards for business.

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