Acro.net – Technology Rants & Raves by Acroplex®

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?

I’ve no recollection of my first domain purchase but it probably happened on eBay, more than ten years ago.

Back in those days, eBay held a higher reputation than today, even with non-tangible goods such as domain names.

Since then, my domain acquisitions diversified and I’ve completely removed eBay from my list of options.

Nowadays, I buy domains from the following markets:

• Domain forums
• Via direct emails to the owner
• Sedo
• NameJet
• GoDaddy TDNAM
• From offers I receive via email

On occasion I might purchase domains on Bido, Afternic and domain conferences.

So what methodology do I use in order to price domains and place offers or bids accordingly?

Firstly, I’m a big fan of aged domains. If a domain is from 1999 and older, I’m interested. If it’s from 1995 and prior, I’m definitely interested.

Some aged domains might appear to be esoteric or might contain dashes. That’s when the visual and/or aural test kicks in.

Are these domains marketable? I add a point. Are they pronounceable? That’s a plus. Do they look “right” in print? Jot one point as well.

Obviously, if I can get any worthy domain for a huge discount, it’s always a great deal. Opportunities for discounts exist: the owner might be short in cash, they might be unaware of the domain’s worth or they might simply want to get out of business.

If a domain has potential and there is a danger of it being snapped by others, I “seize the day” and make an offer within 10% of the asking price; sometimes I might just pay the asking price outright. The latter method took my $2k investment in 360.org to a $25,500 sale a few months later.

Overall, I trust my “gut feeling” and although I do follow the market trends, I’m staying true to what I consider positive elements in a domain.

Lastly, never be ashamed to ask for a discount, provided of course that it does not blatantly disregard the street value of certain types of domains: generics and short ones.

Follow me on twitter at http://twitter.com/acroplex for updates.