Where Does a Newbie Domainer Start?

New readers to the blog: Welcome! Please read What is this Blog About. It explains how I am an experienced ccTLD domainer, but completely new to .com domain investing. You may also like to read about My Domain Investing Journey So Far.


This Might Shock Domainers

I’m sure many domainers take the daily NameBio Domain sale lists for granted. We may glance at the top domain sales, then get on with our day. However, I am coming into the .com market with fresh eyes, and I can see so much value in all domain sales on these lists, it is unbelievable.

To date I have only invested in .co.nz New Zealand domain names. On NameBio there are 70 entries for .co.nz sales. That is 70 publicly recorded sales EVER. Not much data to start investing from! Imagine if NameBio only had 70 .com sales in its entire database, how would you invest?

Over the past 5+ years, I have had to blindly test, analyze and reverse engineer things for myself in the NZ market. It gives real meaning to the term “self-taught!”

Newbies: Put Your Wallet Away and Start Researching

The .com market is so large, there is so much data, it is almost overwhelming for a newbie domainer. What kind of domains do you look to buy? Brandable, Generic, Numeric? Two Word, CVCV, 4L? It can be quite a challenge to know where to start.

I am making a point to do a lot of research before I pull the trigger and start buying. Sure I could go out today and buy a bunch of domains, but without a strategy, without a plan, I would just be following one trend after another with no direction.

So as I learn more about .com strategies, I am starting to formulate my own research process. My very first process as a newbie .com domain investor is to see what names are selling each day. Thank god we have NameBio to help with that.

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For about a week now I have been reviewing the NameBio Daily Market Report each day. The report is a list of all the publicly reported domain name sales over $100.

I have had a cursory glance at the Expired Domains Lists too, and for a newbie the tens of thousands of new .coms expiring each day is a little overwhelming. At this early stage, I don’t have a defined buying strategy for .com. Therefore focusing on something small each day, like the NameBio domain sales lists, is helping me to learn about the market before jumping in.

There are usually about 200 publicly reported sales per day, and I find the process of studying this limited set of data is manageable for a “newbie”. The expired domain sites are great at filtering, but when you don’t have a clear strategy on what names you want to be buying, all the filters in the world won’t help.

My Method for Digesting the NameBio Daily Market Report

For those who would like a simple checklist to refer to, this is located at the bottom of this post. However I encourage you to read the reasoning behind each step, as you read this post – it might help you to look at your research in a different way.

So, I have signed up for the NameBio’s Daily Market Report emails (subscribe on the right side of this page). Receiving a daily email is a great reminder to complete this task each day. Sure you can go directly go to the site each day, but it takes 30 days to form a habit right? So I find the emails helpful for building this new research habit.

Below, I share my process for analyzing these domain sales lists, which is helping me to work out where I may be able to enter the market with my own approach to domaining.

Step 1: Open the Daily Market Report Email, and click through to the site

Step 2: Scroll down to the All Sales Results Table

Step 3: I look at each Domain Sale. I am not concerned with prices, I am trying to eyeball domain names that I like the sound of. Names that I would like to own right now, names that I would buy at an auction.

You may think “Oh, I like the domains that sold for the most”. But often times the top priced sales are for domains that are not the kind of domains you ‘like’.

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View the full Sep 12 list here

For Sep 12, 2018 the number 1 sale is Gab.com. This is a great domain, and a great sale at $220,000. But let’s face it, as a newbie, 3 letter .com domains (aka 3L or LLL) are not the type of domains I am going to be buying just yet, due to the higher investment level needed. (Generally starting around $30,000 for a cheap one)

The number 2 sale is “DepotCheck.de which sold at $19,203. However, as I mentioned above, not all big sales are domains that one would like to own.

There seems to be a few high value sales of German domains today: festzinssparen.de and webthings.de also featuring high on the sales list. I only want to invest in .com domains so I always skip over any extension that isn’t .com.

The next highest .com sale was memed.com for $5,000. While a nice sale, I personally wouldn’t buy this kind of domain. I like terms that make sense, are commonly used, or contain two words that go together. From my “week” of doing this daily research, I am leaning towards investing in two word .coms.

The next domain is survivalworks.com. I don’t really like this name. What is it for? It doesn’t sound like a good brand that I would like to own. BaristaPro.com sounds nice. But it’s probably on the borderline of what I would choose to own. There are quite a few other words you could put in place of pro.

If I can, I would like to own domains for which there are very few alternative words that could replace one of the two words. The more alternative words that make sense in a domain name, the more chance a buyer could enquire then walk away if the price is too high.

BaristaPro actually is sounding better to me now, but I would rather have a word different from Barista. I will skip this one, there are plenty more I like better.

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I keep going down the list. Some of my nos are:

NO

Jesuit.com – Religious? I want commercial terms.
ProfessionalBeauty.com – It would sell, but its a boring name. Less desire = lower price.
LandRollers.com – I see this being something, but I wouldn’t want to hold it for 5 years.
IconSource.com – I just don’t see what this would be used for. Celebrity site. No excite.
Marrick.com – Likely a Last Name which would function as a business name. Not for me.
LinkShack.com – Sounds like a link farm. Do these still exist?

You get my drift. From the entire list, these were my favourites:

YES

$ 3,326 KingsRoad.com – This could be a great brand for a Trucking Company, Tools etc.
$ 3,122 Glucosa.com – Great brand for a medical device or app.
$    630 PrecisionVision.com – I like the rhyming aspect of this brand. Medical perhaps.
$    565 Cavera.com – I like this Brand Bucket style “brandable” name. For Pharma or Tech
$    431 LivingTools.com – Brand for a camping/outdoor equipment company.
$    289 PropertyTrading.com – Exact match term for a Property Investment Strategy.
$    142 FireScanner.com – Someone would name a product or app this.

Important:  For each name I like in the list, I copy/paste the whole line from NameBio into my spreadsheet. When I copy a domain I like, I copy the whole line to include the Domain, Price Sold, and the Sales Venue. Be sure to write the date above the day’s entries.

Once I have been through the whole day’s list, I have a handful of nice domains in my spreadsheet. You could also look at this as pretending. Perhaps I look at my spreadsheet and pretend that I am looking at my portfolio ha ha.

When I have had my initial looks at some of the expired domain lists, I almost felt a bit repulsed because I see so few good names that I like. Having this “collection” of nice domain name brands, helps me to define the .com names I like. By collecting these names, I will have more of a nose for finding similar names.

Step 4: Once I have my personal collection of domains I like to separate them out into 2 columns, one for Wholesale Prices, and one for Retail Prices.

Domain names are either bought by investors, who want to buy cheaply so they can resell the domain again. Or purchased by end users who will build a website on the domain name.

If we can work out whether the domain name sold for a retail price or a wholesale price, we can start to learn how much the kind of names we like end up selling for to end users. Conversely, we can learn how cheaply we may be able to buy domain names we like.

The difference or ‘spread’ between wholesale and retail is where a domainer makes their money. If you don’t know the prices a particular domain name should be bought and sold for, you will struggle to make a profit as a domainer.

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Retail Prices for Domain Names  (The Buyer is an End User)

The retail price of a domain name, mean the price an “end user” pays for the name. An end user is a business or person who will actually use the domain name and build a website on it. An end user is the “final” person who will own the domain name, i.e. the domain isn’t purchased by another domainer who will resell it again.

The end user pays an “end user price” which is the generally the highest price that the domain will command at that point in time. Generally, end user prices are in the thousands to hundreds of thousands of dollars.

When it comes the the NameBio lists, the retail prices are always the domains at the very top of the list. If a domain name has sold for over $100,000 it has almost always sold to an end user.

Wholesale Prices for Domain Names (The Buyer is a Domainer)

Wholesale Prices are lower prices, that domainers sell to other domainer for. Sometimes a domainer no longer wants to own a particular name, or they need some money fast. So instead of wait potentially years for an end user to pay top dollar, the domainer will price their domain lower, so that another domainer will buy it.

The domainer who buys it believes that they can sell the domain name for a higher price eventually so they are happy to pay the wholesale price. The domainer selling it is happy because they have sold the name and hopefully have a small amount of profit to use for something else.

In terms of the NameBio Domain sales lists, they are not categorised by whether a domain name sold for a retail price (to an end user) or a wholesale price (to a domainer), but we can generally work it out easily.

How Do You Know if a Domain Sold for a Retail Price or a Wholesale Price?

There are two ways to determine if the domain sale sold at a retail price or a wholesale price. Any domain that sold for over $5,000 is generally purchased by an end user, which means it was a retail price.

Most average domain investors like to keep their investment in each domain name low. So they tend not to spend over $5,000 per name, unless the domain name is amazing, and they can afford it.

Some of the more experienced .com domainers will happily buy a domain name for $5,000 to sell it for much higher later on. But for the most part, on the NameBio lists, domains over $5,000 have sold to end users, which means they sold for Retail Price.

The second way to work out if a domain name sold for a retail price is to look at the Venue the domain name sold at. Generally domain names sold on Sedo are purchased by end users, who paid a retail price.

So take all the domain names you picked that are over $5,000, and put them in your Retail Prices column. I have my Retail Prices column on the right. I then leave all other domains on the left which is the wholesale prices column.

If a name sold at NameJet, Godaddy or Flippa this is generally a sign that these were wholesale sales. These venues are for the most part wholesale marketplaces where domainers sell domains to other domainers.

Categorising like this is not perfect, but the more you do this kind of exercise, the more you will be able to work out whether a domainer bought the name or an end user.

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Step 5: Study and Analyze

You now have domains you personally like the sound of, listed in two columns:

Wholesale Prices: Rough prices you could potentially buy a similar domain for.

Retail Prices: Rough prices you could potentially sell a similar domain for.

Look at each name  in your list. Look at the words in the domain, look at the placement. Say the domain name out loud. What made it stand out to you? Is it perfectly descriptive? Is it catchy? Is it short and to the point?

Now look over at the price the domain sold for. Did an end user buy it? What do you think made them pay that much for this exact domain name? Can you think of a variation of this domain name that would have been better? Can you find a better name and buy it at a wholesale price?

Or did a domainer buy this domain? Wish you had bought it for that price? Did the domainer pay too much to make a profit?What do you think an end user might pay for this domain? Maybe it is time to start filtering the expired lists for similar names?

These are great questions to ask of each domain in your list. It is only by asking questions like this that you will start to understand what makes a domain name valuable.

But please note that all domain names are unique, and just because a domain name sold for X, does not mean a similar domain name will sell for the same price. There are many factors which make each unique domain name valuable, or not.

But by starting to study names in this way, you start to form anchors in your mind of values. And domain name investing is all about knowing your values. As a domainer you are always trying to buy below value, and sell for market value or higher.

I know the values of the .co.nz domain name market inside out, but when it comes to .com I know very little. But even just a week of doing this process of analysing sales of domain names I like, I am starting to learn the kinds of names I like in .com,

Remember I am completely new to .com, and I am just starting to form my strategy. I look at these daily sales lists as a way to get a pulse on what kind of domains are selling. I am less concerned with exact prices at this point. I am looking for domains that make me say “Yeah that is a great domain, a great domain I would like to own”.

We all have names in our portfolios that we just shake our head at and say “What was I thinking”. Sometimes two words put together just don’t sound right. And we realise no one is going to come knocking for this name.

I am trying to avoid buyer’s remorse at this early point, by keeping my eyes open to what is out there. What I am trying to do is make a big list of domains that make me go “WOW, nice name”. Then when I begin to start combing the lists of tens of thousands of expiring domains, I will know a name I like when I see it.

The benefit of “collecting” these sales is that when I come across a name I like, it may remind me of a similar kind of name that I saw in the past. I can then go to my spreadsheet and see what that kind of name sold for. Even if the keywords are completely different, sometimes the sentiment of a name can be similar to another one.

By this process, I am trying to hone my skills BEFORE buying. I want to avoid the typical newbie scattergun “buy and drop” approach. I have probably dropped 400 .co.nz names in my time, while learning that market. I am not about to repeat that with .com!


Summary: My Process for Analyzing NameBio Daily Market Reports

Step 1: Open the Daily Market Report Email, and click through to the site

Step 2: Scroll down to the “All Sales Results Table”

Step 3: Copy Domain Names that you like the sound of, and paste into your spreadsheet.

Step 4: Separate them out into 2 columns: Wholesale Prices, and Retail Prices.

Step 5: Ask Questions about why each domain sold for the price it did:

Questions To Ask About the End User Sales (Retail)
– What do you think made them pay that much for this exact domain name?
– Can you think of a variation of this domain name that would have been better?
– Can you find a better name and buy it at a wholesale price?

Questions To Ask About the Domainer Sales (Wholesale)
– Wish you had bought the domain for that price?
– What do you think an end user might pay for this domain?
– Did the domainer pay too much to make a profit?
– Maybe it is time to start filtering the expired lists for similar names?


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NameBio Rocks

Shout out to Michael Sumner and Adam Strong at NameBio for publishing these reports each day. This is such a great service for the domain community. Where would we be without NameBio!

You can view NameBio’s daily market reports here. I highly recommend subscribing to the daily emails on the same page.

Let me know if you like this research strategy idea? Do you have similar tastes in domains as I do?

If you made it this far, congratulations! That’s 3060 words read! My poor hands… Comment below to say you MADE IT!

@NZDomainer

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