Defining the sweet spot when buying domains
As a domain investor I follow a simple mantra: buy low, sell high.
The question is, what exactly is that “low” that will eventually determine the “high” price and how does one determine that?
When evaluating the potential of a domain to be acquired, I consider its TLD, keyword, age, positive meaning and Google results for the keyword as the primary factors.
Price comes second, for a simple reason: when all you examine in an asking price is the monetary value in dollars, you don’t see past the particular sale and you’re ignoring the domain’s potential.
One has to see long-term: how much would the domain be valued a year from now? Five years or longer down the road? Is it worthy of development, or does it have competition in the field?
Whether I spend $30 or $3,000 to acquire a domain, I summarize my decision after consulting those parameters I mentioned above. The end result is then further processed by my own, personal “gut feeling”; something that seasoned domainers develop with time.
What is your sweet spot and how do you determine that?
January 25th, 2012 at 2:35 pm
I simply ask myself the following:
1) Can a business be built on it
2) What industry does the name cover and what is the $ size of the industry, is it growing etc?
thats where i start. If i can answer in the affirmative for these first two then i do a little more digging and vetting. But these two usually open up the deal.
January 25th, 2012 at 2:48 pm
Agree with you re: the gut feeling thing. It’s important not to get too emotional when buying a domain, esp. during an auction! It’s easier to overpay in auctions … that beats the ‘buy low’ approach.
I also look at the market of potential hungry buyers. How much this market will be able to pay.
January 25th, 2012 at 4:46 pm
I would be inclined to agree with Chad where this method is applicable, although of course there are occasions when this goes right of the window.
Acro, why doesn’t your contact button work?