For us, we’ve done mostly the same as well. When we buy domains we tend to look at the keywords within the domain, the extension, try to figure out the potential, and at the end, just ask ourselves if it makes sense.
This morning we’re signing a deal for mid five figures domain and I can tell you, it is not a traffic purchase. Our thoughts on this purchase at decision time were on the following lines:
1. Is it a strong keyword?
2. What is the potential of the industry?
3. Who are the players in this category?
4. Do we see a market opening? Can we develop a business here?
5. What is our risk if we have to liquidate quickly? (difference between price paid to what we sell if we are forced to quickly)
6. Are we going to lose traffic to other variations of the domain (example: plural)
7. What is the advertising pressure for the keyword, related keywords? (number of bidders on Google, Yahoo, and prices)
8. What is the estimated traffic numbers for the domain?
Note that traffic is last here. In our consideration it was last as well and since traffic on this domain is estimated to be weak at best, I can surely tell you it is not a deciding factor at all.
The bottom line as I’ve said many times before, the main question is “Does it make sense?“. Yesterday Jeff and I were thinking more about it and we also noticed we have never really regretted a purchase, no matter how silly it looked at the time of purchase.
What are we regretting then? Some domains we have considered, and skipped.
Have a great day,
Sahar
Thanks for a great post that really captures the essence of what domaining is really all about. This post is truly a testament that there is more than one way to skin a cat.
Very well said.
I’ve been thinking of approaching you with these names, and having read this piece, I think this is a good time - if not the perfect way….
GSDbreeder.com and AlsatianBreeder.com
Any interest? Thought they relate to a subject close to your heart.
Best - James
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Hi James,
Solid domains and yes, they are close to me, but not for me though. Maybe try to locate GSD breeders around the world and send them email about it? If you price it attractively I think you can sell for 500$-1K pretty quickly.
Can yo uget more? With the right client, sure, however, the question then is how long do you want to wait for the right client?
Good luck with them.
Sahar
No arbitrage forcing you to change course?
Guess the Snowe bill is breathing down heavy.
What advice have you for sloppy domainer- you know traffic, porn typo- guys like the big cheeses on the magazine covers
This is a GREAT post Sahar - you are spot on.
Keep up the GREAT Stuff.
I agree. So many people look at domains as traffic sources only. These people probably have good businesses. But they would never have bought what are now our top domains. And those people that want to buy your domain and say “I’ll pay you 10 times what you currently make” are seriously kidding themselves. They think we’ll sell a major domain for pennies, just because it has little natural traffic right now.
Look at Bido.com. I would guess that domain had little organic traffic 3 months ago. But it’s value is in being an extremely easy, simple, unique, brandable, pronounceable and rememberable domain. Thus it’s worth a thousand times it’s previous type in traffic value - whatever that might have been. Now though - it’s a domain that almost everyone in the industry has heard of and knows.
Great post Sahar. This is generally the method I use when purchasing or even registering a domain name.
My portfolio does not do well with any parking program simply because the traffic is not there. I have strong keywords and development potential, usually in specific niche businesses.
Encouraging post for me, thanks!
Mark Fulton
http://www.DotSauce.com
Hello Sahar,
Is this a post to prepare us to your BIDO auctions where you’ll probably try to sell us domains with low search popularity (=> low type in => low traffic => low revenue) arguing they have a big value?
You maybe noticed the offer for top premium of quality (high search populariy) is like null (the ones who own them don’t sell them) and are preparing to sell based on others vertues.
I invested hundred thousands dollars of advertising to get the confirmation of this fact.
…
All the big domainers and domaining companies have been and continue buying mainly based in traffic, or the main metrics that disclose the potential traffic…
It’s funy how they buy for n and try to sell for the “beauty” of the name.
Great article Sahar. I have sold close to 100 names in the last 9 years. No really big ones, mostly between $500 and $3000. My best has been $9500. None, I repeat, None have been natural traffic names. I am sure many of those have developed traffic since sold with development.
I have always registered with potential in mind and not traffic. So far it has served me well. Glad to see articles like this that help new people getting into the business understand that it’s not just about Traffic. I have plenty of great “Non Traffic” lol, names on my site.
Good luck to all.
Have you ever heard the term ” Think Outside the Box ” The business world is more dynamic than some peoples cynical narrow view. Why is it that people who profess to be open minded always revert to control issues or judgements. Fact is the most valuable .com names on the planet have nothing to do with Traffic.
So my question to anyone is please inform me of what I am missing here?
Excellent post Sahar! it’s nice that it comes from someone influential who can help domainers re-evaluate their assets. Here is a relative comment I made to the same issue regarding type in ppc on elliots blog recently, I’m not sure it was posted:
Kevin’s numbers are pretty spot on interms of RPT (revenue per thousand) analysis, however the problem is,… is it really realistic for the average domain? In his example, 1000 unique visitors generates revenue of $35.00, so should domain investors really be looking long term at $35.00 on average for instance for attracting 1000 unique vistors, at perhaps an average CTR of say 30%?? If this is the case, then no wonder why our industry will never grow beyond paltry PPC rates and will never attract real media ad agency interest, because they the media ad agencies will never ever be able to make any money at those rates, and they are the people who can bring in the big business potentially!!
We make a mistake by using the same metrics as websites along the lines of cpm rates of say $20 or $30 per thousand. The reason being, a fully developed website is an entirely different ball game with the capacity to attract millions of pageview impressions from thousands and thousands or millions of unique visitors. Even a meagre developed domain is very unlikely to attract such traffic numbers, so CPM model rates of $20.00 to $30.00 on average makes a lot of sense only for fully developed websites with venture capital backing.
However, for domains it makes absolutely no sense whatsoever!! So what is the solution in my opinion. What we need to do here, is to completely re-evaluate the value proposition that domain names present to the advertiser and here’s an example;
Suppose carbmw.com for instance only attracted 100 unique visitors every month for 12 months, that’s now 1200 unique visitors right? visitors who are interested in either purchasing a bmw or bmw accessories right?…now suppose 10% of those unique visitors went on to purchase a bmw or accessories within the course of those 12 months, that means an average of $xx to $xx,xxx times 120 unique buyers leading to several thousands of dollars to the car dealer/s involved.
The way the domain ppc market works today, carbmw.com will only earn a paltry $xx figure, however if the domain market went for real value because it figured out how to present it’s case and underlying value proposition properly, then carbmw.com could actually charge $50.00 per click through or agree to take 10 to 30% of any resulting sales. Basically, the domain investor industry desperately needs to create a hybrid value proposition that will make “money and sense” to media advertising agencies right across the board and then domain names will start to realize the real worth they truly deserve.
It’s bound to happen sooner or later and I’m busy working on a solution that could make a contribution to the next stage of our domain evlolution…so watch this space!
One of the greatest books I read, matter of fact my #1 book in my library, is “Awaken The Giant Within” by Anthony Robbins. You would think because it sold many millions it is not as valuable as it surely didn’t perform magic to millions as well, however, it does magic to those who embrace it, not to those who flatly reject it.
Same thing goes with many other things in life. Many tend to look for something that isn’t there. “He made it because he had money” or “he comes from a connected family” or “he buys domains based on traffic” not really understanding what truly is going on, not understanding that most of these issues are usually minuscule in the bigger picture.
Maybe one day they will learn, maybe not.
Great comments guys, thanks for participating.
Sahar
Great Post!!
I was recently offered $25,000 for my 2000 domain portfolio which generates $1500 - $1800 parked and climbing. My portfolio is made up of of a mixed bag of typos etc that generate the bulk of the parked revenue.
My feeling is that the real value of my portfolio is the fact that the remaining domains are mostly two word domains that make sense and have value in the end user market.
Example: NovaSigns.com - A domainer will want to pay a hundred dollars or less for this great two word domain. The guy that’s opening up a sign business named Nova Signs will pay $1000 plus. So do the math… 2000×100 dollars or 2000×1000 dollars.
Also, I agree… I see people all the time offering names on boards for sale at inflated prices [ that probably don’t sell ] Names like ChicagoGreenPencilSauce.com < makes no sense and have no commercial value. IMO
- it’s available at your favorite registry 
I’m looking for someone to sell my names to the end user market if anyone is interested.
Sahar,
I appreciated your recent post on the domains with meaning and potential.
One additional point I might also add is that some
products/services have a high initial monetary cost and in many cases-like real estate, (clearly, over the long term) will see appreciation in value. Thus, the value of that “lead” today has a high probability of also, being worth more over time-reflecting the industry demand for that product. If one was focused on owning many consumer,”commodity-type” products, you may see a domain’s stagnate or decrease in value. Competition or technological changes put pressure on keeping prices low-or may drive prices down. Think Digital Cameras, VCRs etc. As prices for these products drop-or the market becomes saturated, the incremental value to advertisers wanes.
Conversely, the higher the potential price increases/appreciation for products or services your generic domains serve, the greater your payday someday when you lease or sell the name. It’s worth thinking about as we register/acquire for our domain portfolio.
Sahar,
I’m interested to know what tools or people you use to make the “breaking factor” decisions on which names to buy according to your numbered list above.
Tia Wood
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You’d be surprised but we don’t use tools to determine prices we pay. What we do is browse sites, check some domain history (not a must), maybe archive.org, check the industry in general, and just get a feel of things. Most of it is just common sense, “Does it make sense?”
Cheers
Sahar
We have a portfolio of a few dozen domains, some new - some old. Many auctions for a top names have no worked to our luck and we started a ebay domain store but since we have 0 feedbacks - I think bidders think we are scammers and stay away. Estibot claims our portfolio is worth between 200-300K for about 40 names we have. Could anyone estimate what they feel these 5 domains are worth to see if we are in the same area: ReviewWrite.com - DevelopmentProduct.com - GardensProducts.com - ReviewsFilm.com - ProvideCustomers.com which are all for sale. We stay away from PPC Totally and redirect traffic to one of our properties. I buy strictly for the keyword terms - not traffic.
The “Does it make sense?” may be one of the hardest parts for people to figure out when domaining. A name “Making sense” is a very subjective thing at times and most people tend to think that their version of “making sense” must be right. Often the right “pick” has a lot to do with choosing what everyone else would pick, if they were in the same shoes you were in. . . and being honest with yourself about that.
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Well said Adam,
Cheers
Sahar
The question “Does it make sense?”? fits well with the domains listed by me at http://www.DomainWishes.com You can make an offer on any domain or domain groups listed on the site, for further consideration.
The names were chosen because they represent a clearly growing or already established industry in addition to fitting logically with their top-level extension(such as JohnDoe.Info, CutTheCord.mobi, etc’), making them intuitive to type, easy to remember, PPC-friendly, and straightforward to brand.
I believe considering ALL 8 points described by Sahar as a marker for good domain valuation.
Sahar,
I have v. simple questions for you.
‘7. What is the advertising pressure for the keyword, related keywords? (number of bidders on Google, Yahoo, and prices)
8. What is the estimated traffic numbers for the domain’
1) Where do you go to find actual number of bidders and prices?
2) Where and how you find out estimated traffic numbers for the domains?
Any help as where to find this info. will be greatly appreciated.
Thanks in advance.
Great work Sahar. Love it.
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Research research research. We used to collect a lot of data direct from the search engines (overture/yahoo, google), buy a lot of data. Not sure where to collect it these days as it is not our main business anymore.
Good luck!
Sahar