My Domain Name Investing Journey so far

Hi I’m Adrian, a part-time domainer from New Zealand. I have been interested in domains for over 10 years ever since first having some for various online businesses.

You Can Sell a Domain Name for a Million Dollars?

I was inspired to get into domains after hearing about domain names selling for millions. I soon learned that most of these high value domain sales were purchased in the 90s so it is not easily repeatable.

But over the years I picked up from various places that any domain name could be sold for a profit – you just needed a willing buyer. And so the journey began.

As usual, I bought I bunch of crappy domains. I may have registered about 10 or so. Obviously never sold any. Dropped them and gave up. But I always kept an interest as I kept hearing about people being able to do it.

After my initial failure with .com I decided to try investing in New Zealand domains, which end in .co.nz. I already owned a bunch for my various online businesses. So I started buying expired names in .co.nz. I thought I knew what a good domain was.

This was around 2008 when keyword domains were all the rage. Names like SkateboardWheels.com or WashingMachines.com. Put a domain extension on the end and they were hot. Mind you I never sold any.

I bought a lot of names, that if they were .coms would have been great names. But in the tiny NZ market, they were worthless. I was wasting a lot of money, and with the high renewal prices of .co.nz ($25 NZD / $18 USD). At the time .coms were around $9 USD. It didn’t stop me buying and hoping though.

No One Wants To Buy My Domain Names…

I eventually worked out how to put an offer page on the domains. But due to the crappiness of most of the names, I never really sold any that way. My landing page was really crappy, and it didn’t say Domain for sale, it was just a contact form.

So as people thought it was a website, I got genuine enquiries about whatever product the domain names suggested the site was about.

I stumbled across the Domain Sherpa website and show very early on. I think it launched in 2011. I have been a big fan ever since and have listened to every single show/podcast! That is about 400 shows. So I learned a lot over the years from all the guests.

I slowly got better at buying .co.nz domains. I sold a few to businesses that I reached out to. But I really did hate bothering people. It was much better to have them come to you. However a mistake I made early on was that I assumed that because I knew how to use WHOIS to find a domain owner, that every one did.

So I sat and waited for people to someone look me up and offer to buy the name. It might have only happened once or twice in a few years. Meanwhile I had hundreds of domains slowly dying on the vine.

I Paid $5,000 for a .co.nz Domain Name!

About 2013 I needed to buy a domain for my girlfriends new startup. I knew that having a great name would really boost the business. We found a category killer in the New Zealand market, but the guy wanted $5,000. We ended up paying it due to the quality of the name, and the reputation and trust boost it would give us as a new business.

So after happily paying $5,000 for this name, it got me thinking, maybe I should get into this highly profitable domain business via local .co.nz domains. So I started really going deep and researching how to do it.

I started looking at domain names differently. Keyword domains were going out of favour due to Google changes where you couldn’t throw up a keyword site and rank easily any more.

I started to really analyse what made a name good. I learned a lot on the Domain Sherpa show. I loved the interviews host Michael Cyger did with guests about how they bought their domains name.

At some point Domain Sherpa started adding a new show format where 3 or 4 people would talk about domains they were buying. They were called the Domain Sherpa Review. The concept sounded kind of boring to me compared to the interviews of really good names being bought and sold for high prices.

So I literally never listened to a Domain Sherpa Review Shows for at least 6 months. I thought meh, boring, no value there. But the regular interviews I was very keen on. The problem was I was so up to date, and had listened to all the shows that I ran out of podcasts to listen to. I purposely avoided downloading the Review shows. But one day I had no regular Domain Sherpa show to listen to so I just gave it a try.

It wasn’t till I had listened to a few shows, that I realised listening to people who are buying and selling in the industry every day, was super valuable. The regular Domain Sherpa interviews were often interviews with people who had bought and sold domains for millions of dollars. They were exciting. But for the average joe domainer, they weren’t going to be able to do that.

My Domain Education Begins

So I started listening to the Domain Sherpa review shows religiously. I learned SO much from Rick Schwartz, Andrew Rosener, Shane Cultra, Michael Berkens, Michael Cyger (Host), and all the guest Sherpas that were on the show. I really loved it when Frank Schilling was on.

Rick Schwartz especially was influential to me in the early days, especially around the concept of branding, and I have read every single post on his blog. But I will leave that story for another post. With Rick Schwartz retired, these days Andrew Rosener is the industry leader dropping knowledge at a high level.

I still listen to every Domain Sherpa show to this day. After thinking they werent that interesting early on, The Domain Sherpa Review Show is my FAVOURITE segment – and I highly recommend them. Hearing about the day to day activities of investors in the industry, and their opinion of values of some randomly selected domain names, is so valuable.

In terms of my domaining, I learned what a good domain was. It was Andrew who spelled it out perfectly: “commercial value”. A good domain investment is one that a business would actually use. So I stopped buying domains that sounded good. And started buying names that businesses would actually use for their main website.

I had been buying domains that were exact match product names. While these have some value, a business usually isn’t going to call themselves the name of the products they sell. They won’t use WashingMachines.com, they will use WashWorld.com – a brand name.

So my domain buying strategy pivoted again. I was still investing only in .co.nz. The expiring names were pretty good, and there was little competition to buy them back then.

I was staying clear of .com because it was so much more competitive and expensive to get in to. I thought, if I can’t learn to how to make money in New Zealand Domains, I had no business getting into the competitive .com market.

So over the next 2-3 years I kept refining my strategy. I have about 500 domain names in my domain buying history. They got better over the years as I learned more and more. Big ups to Michael Cyger! I have learned so much from his work with Domain Sherpa. He now runs DNAcademy.

It Took 3 Years for me to Sell a Domain close to $1,000

In early 2016 I started getting some good sales. (Good for the NZ market). I sold two names for around $900. This was my first real success at domaining. I was about 8 years in from my very first crappy .coms.

I had been buying .co.nz names for about 4 years, every now and then. I was never really going very hard. I would buy a name here and there. I never really had many sales until these 2 names @ $900 each, quite soon after each other.

It was these two sales, that really taught me the most about what worked in the NZ market. And that was one word, generic, category killers.

0 to 7 Figure Sales on a Category Killer Domain

Speaking of Category Killers…that $5,000 domain I had purchased for my girlfriends startup in 2013 was proving it’s worth. We had built that business up to 7 figures in around 2 1/2 years.

There were obviously many factors that played in this success but I think the category killer domain played a massive part. Both in terms of branding and conveying authority, but also in saving on PPC advertising cost via the domain name being exact match to the industry.

Everything you knew was wrong

So now I knew what worked I started paying a lot more attention to the expiring lists. I stopped buying shitty exact match product names that sounded good, but no business would ever pay that much for. I focused on one worders exclusively.

I had about 150 .co.nz current names at this point. A good chunk of them were pigeon shit. I believe you can sell almost any domain outbound, but the time involved is probably not worth it. So I let a whole bunch drop. It was hard to let so many drop, but I knew they would never sell, simply waiting for inbound inquiries.

It was at this time that Efty (the domain selling platform) launched. You load your names up and they have a nice, simple clear landing page. My domains at that time either had a white simple contact form of them which did not say Domain for Sale. Kind of dumb really.

Again I just assumed because I lived in the WHOIS system researching the hell out of the NZ market, that people would know how to find a domain owner.

So I loaded all names up on Efty. It didn’t take long to receive a few offers. In fact I started receiving offers quite regularly. It was quite nice to see people interested in the domains I had bought.

The thing I found with offers was that they were always low ball. When I emailed the price, most people ran off. Or worse they told me I was crazy. I was not asking for high prices. But I took the enquiries to completed sales ratio as a sign – something was wrong.

It took me about a year to learn that it was good to put a price on the domain. It saved my time by weeding out dreamers, and set expectations in the buyers minds as to the price level they needed to be at.

At this time I was actually starting to sell domains. It was every few months, but I would get some good sales. The best thing about these sales was the feedback they provided. They started to show me what kinds of domains would sell.

So this further improved my buying strategy – which I was super happy about. The problem was I kept learning that domains I thought were amazing a year ago, were absolutely crap! More purging of dozens of crap domains!

“Anyone who isn’t embarrassed of who they were last year, probably isn’t learning enough.” – Alain de Botton

I Cracked the .co.nz Domain Code

So over the past 2 years, I have started to get regular sales under my belt. I have learned what makes a domain desirable to a New Zealand business. I have learned how to price them to the local market.

In New Zealand, you can’t delete a domain, you have to wait the full year out to drop it. So that bad decision stares you in the face for a long time! Each month at renewal time, I shake my head at domains I thought were amazing a year ago!

I have just done my final purge of crappy domains from last year. There was a big release by the registry of some keyword names that were held. So it was a mini gold rush all over again, just like .com in the 90s – or so I thought

But soon after buying them I realised they “sounded good” but they weren’t actually good domains. Kind of like the .CO Gold Rush of 2011, or the gTLD Gold Rush of 2015. These NZ Gold Rush 2.0 domains are expiring around about now. I have about 30 of them left. My domain portfolio is now the SMALLEST it has every been, yet I have never had so many sales.

I have really cracked how the NZ domain market works. Usually I can buy a domain, and it will be sold within 6 months. I learned over the years that I hate outreach, so I never contact a business to sell a domain. All my sales are inbound. Inbound is great because you get a higher price, as the person actually wants the domain.

A 10 Year Journey

So we are here in 2018. It was 2008 when I bought my first crappy .coms. Granted, I have only seriously been into domains for the last 4 years. I have had various businesses that have taken up a lot of my time, so I have always left domains on the back burner as a part time hobby.

But with the increased sales over the past year, I have proven to myself that I can buy the right domains, at the right price, and sell them for a good return. I finally know how to invest in the NZ market successfully!

My Problem

The problem I have now is a funny one. There is not enough .co.nz domain inventory to make a full time income doing it.

New Zealand is a country of just 4 million people. There are around 600,000 domains registered. This would seem like the land of opportunity if we were talking .com. But with such a small country, there is just not the number of businesses for two word domains to be worth investing in.

So, I have a problem. I am at my limit in the NZ Domain market. I have the skills to hunt for domains, but there is very little opportunity to buy profitably. I will always keep investing in the NZ market, but I need something else. I think it is finally time for me the enter the .com market.

Entering the .Com Market

I know the .com market will be similar, but still very different when it comes to names. I know what makes a domain good in NZ (one worders), but one words in .com are very expensive. I don’t have the budget to buy one word .coms at this point. They generally seem $10,000 a piece, give or take.

So I will need to work in two word .coms. I don’t have much recent experience with those. And the exact match two word domain experience I have from 2008-2010, no longer applies.

I currently weed out so many one worders in .co.nz, that would be killer in .com. So I am going to have to train myself in two worders.  Also I am used to working with a smaller budget. Even Two Worders in .com are 000s to 0000s. It could be quite hard for me to adjust to investing more in each name. So this is going to be a very interesting exercise!

Why Start This Blog Then?

The thing with New Zealand, is everyone knows everyone (almost). We joke that there are 2 degrees of separation, not the usual 6 degrees. When a business is launched, you are not far off competing with someone you know.

The domain market too, is quite small. There are about 10 domain investors here. Probably 6 have a good stash of names from the early 2000s. Probably only 3 (including myself) make a good volume of sales. So we are always stepping on each others toes.

I couldn’t write a domain blog about how to buy NZ Domains, the audience would be about 50 people. And discussing my strategies would be counter-intuitive in such a small market.

But .com is a massive market, I am a newbie, and I don’t have a strategy! I also have a tendency to over-analyse, so while I am over-analysing I can write it down and share it – for my own reference, and for others.

Not Your Typical Domain Investing Newbie?

I think that I will also bring a different perspective to .com investing. This will not be a typical newbie’s blog. It took me probably 4 years to learn what a good domain really is. And another 2 years to refine that. All the while spending/wasting thousands on crappy domains.

I have probably churned through 500 domains in my “domain career”. Mind you, I have never hand registered domains, but even expiring domains can be crap.

So I am hoping my journey in .com will be a little faster than the typical newbie domainer. I already know what a good domain is. I know for the most part how to negotiate and set prices. But that is for .co.nz domains. .Com is going to be different.

I think my perspective on domaining will be unique, as I am coming from a ccTLD perspective. I think my journey will be interesting for others to follow along with, and hopefully as I learn .com, the things I learn will be useful to others.

I have checked the New Zealand expiring domain lists every night for the past 3 years, so I’m hoping this will put me in good stead for scrolling the endless daily lists of expiring .coms. That being said, perhaps I am just an overconfident newbie! Given the size and competition I may totally suck at .com.

I Will Be Documenting Every Step of My Process and Journey

I love hearing about domaining on the Domain Sherpa Review show, so I want to discuss domaining with this blog and on my Twitter. I will be documenting my learning process from keyword research, to buying, to negotiating and selling.

I have never shared any of my strategies on domaining, or business for that matter. But by growing my investing outside of .co.nz and into .coms, I think it is a good time to start sharing my thinking and strategy. I’m new anyway, I have nothing to lose!

The book “Show Your Work” by Austin Kleon has inspired the creation of this blog. Derek Sivers pulled a lot of nuggets from that book and summarised them in his review. The review is very short and is definitely worth a read. Some of the best ideas are:

“Consistently post bits and pieces of your work, your ideas, and what you’re learning online”

“Don’t share absolutely everything. Put something out there because you think it might be helpful or entertaining.”

“Don’t show your lunch or your latte; show your work.” 

I’m not sure whether it is just me personally, or the fact that the NZ market is so small, that everyone keeps their tips to themselves. Perhaps operating in small country will do that. But it could be that I tend to be a very private person in general. I am looking forward to sharing more of my theories and strategies as I learn about .com investing.

.com is so large that we can share tips and learnings that will benefit the industry as a whole. The more people who understand domains the better, as it helps with liquidity, as Andrew Rosener (Drew) of MediaOptions has said many times.

From dipping my toe and having a look around the .com market, I think I am in for an awakening in terms of complexity in strategy and investment level. But there is so much opportunity.

I plan to blog VERY often, sharing my theories, thoughts, successes and failures along the way. Please follow along with me on this journey…

Please Follow and Connect!

Please join the mailing list on the side to get an alert when I post. Feel Free to leave a comment below.

You can also follow me on Twitter @NZDomainer. Feel free to tweet me and say you read the blog!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s