End of the month today and all while things are getting busier due to the Holiday Season, I decided to post a list of my top 5 posts for the month.
Without further ado, these are the top 5 most visited articles of my blog for November:
Happy reading. 
After reading Rick Latona’s announcement today that he realized he’s been selling his domains at too low prices, I decided to point out a few flaws in the evaluation process.
At the same time, I will be offering a few guidelines regarding how to proceed with domain investing.
Rick’s method involved a simplified model, whereupon one owns a portfolio of 1,000 domain names.
This model assumes the following:
- All domains were acquired at $100 a pop. Why no smaller acquisitions and manual registrations?
- All domains must be sold tenfold, at $1,000. In reality, a 10x ROI is far from great. How about 50x, 100x or more?
- Sales to portfolio quotient must be 1% – in other words, in a given year you sell one domain out of 100 that you own. Surely, that’s way too low.
Why are those points simplistic and non-representative of what one should strive to achieve with domain sales?
First off, there are domains out there that can be acquired for far less than $100. You can find them at domain forums, dropping auctions or you can attempt to buy them from their active owners.
Not everyone was lucky to have owned quality .com/.net/.org domains since day one. I recall going through thousands of such domains in 2001-2003 and hand registering them for $7 a pop. My margin is therefore much higher; that’s the same case for even moderately priced domains in the aftermarket.
Regarding the return on investment: surely 10x for a $100 domain doesn’t seem too exciting. When I get offers, I tend to aim for a ROI in the 50x range or more. A domain I acquire for $500 will go for $xx,xxx.
Being a long term investor and not a domain flipper, I decide when to sell – not when I get an email with a random number that does not much my pragmatic expectation for the domain.
When you sell one out of 100 domains in your domain portfolio, that rate is too low. How about 5% or 10%, is it achievable?
From my experience, it is, given the number of venues available to domainers these days. There are auction houses, brokers, forums and newsletters. Oh, and don’t forget your own piece of work, the cold-calling and targeted emailing.
Regarding renewal fees; like death and taxes, one cannot avoid them but one can surely write off the cost as a business expense. Form a corporation specializing in domain names and you will be able to write off every penny of renewal costs, year after year – until you sell the domains.
The cost of acquiring a domain – including its registration fee – will be subtracted from the sales price and taxed as capital gains when you sell it – as long as you hold it for a year plus a day. You can’t do it earlier, so make sure you have enough cashflow to renew your domains every year, otherwise you need to reassess your portfolio.
Lastly, when it comes to selling one needs to aim high. If you ask for $1,000 you will most likely get this much. If you ask for $10,000 you can probably get close to that asking price. It’s a scalable practice that I’ve used, time and again, to turn $20 dollar acquisitions into four and five figure sales.
There are horror stories of Google banning domain names and delisting them from its search index.
The 800 pound search engine gorilla can certainly do as it pleases; after all, it commands the majority of the world’s search traffic.
In that sense, there are times when domains are removed or banned without much recourse. Perhaps their content was deemed dangerous or related to malware, viruses and scams.
Google is not the only enemy, however.
A domain I bought a few days ago, had been parked at GoDaddy for almost two years. During that time, it displayed GoDaddy ads.
Prior to that era, it was a commercial web site promoting antivirus software and Windows registry cleaners.
Once I acquired it, I parked it at Sedo. A couple of days later I tried to see what ads were being displayed and the connection was being interrupted every time I attempted to view it.
I contacted Sedo, and they were able to view the domain without a problem. Others did too. I was baffled.
Then I decided to turn off my Avast antivirus for a few minutes. Lo and behold, the parked page came up.
I did some research and apparently Avast likes to store domains it deems dangerous in some remote database, blocking all users of its software from accessing them. There is no way to even turn the feature off.
That’s truly bizarre for a domain that was parked at GoDaddy for almost two years.
I emailed one of their virus lab analysts, citing the domain and my Avast version. In less than 24 hours, the domain had been removed from their database.
There are many reasons to do plenty of research prior to acquiring a domain; potential blocking by antivirus is one such field to be researched.
After six whole years, my trusty Panasonic Lumix FZ20 has been retired.
The aged, bulky 5 megapixel camera still functions just fine, and image quality has always been great – but one cannot fight the proverbial “force of progress” much longer, particularly in digital photography.
My new camera, ordered from Amazon.com during the heat of the Cyber Monday sales, is another Panasonic – the FZ150.
Costing almost half of what I paid for the FZ20 in 2005, the FZ150 will hopefully accompany me to many more domain conferences than its older sister.
After several days of window shopping, Cyber Monday made me succumb to peer pressure.
Hopefully, my choice was right!
It’s Thanksgiving time here in the US; time to count one’s blessings and give to others. Unlike Christmas and other religious holidays, Thanksgiving is about crossing the barriers of religion and sharing food – literally – with family and strangers alike.
The domain industry knows no such breaks, however. An international market dictates no breaks, give or take the time one needs for daily sleep.
I’m thankful that the mechanics of domaining make it one such sleepless industry, that brings opportunities and revenue 24/7.
This year, like every other year, I’m thankful for the astounding support of my remote family, my loved ones, those that make a difference in my daily life; those that I meet in person or on online venues. I’m thankful for my associates, business partners and supporters, sponsors and fans.
Happy Thanksgiving and remember to give to those in need.
