I often share with people that one of the painful things about Melbourne, Australia is that it’s so far away from everywhere else in the world. I then follow up with, “One of the great things is that it’s so far from everywhere else in the world.”

Obviously, this is all tongue in cheek but I must admit that I'm completely over experiencing multiple bouts of jetlag. A few weeks ago I was on a 12 day trip that circumnavigated the world. It involved 7 flights and a total of 60 hours actually in the air.

I’m certain that when I returned to Australia my blood had to flow through my veins in the opposite direction because I kept on getting dizzy. Doing a rapid East to West trip like that really messed up my body clock. Besides that, upon returning the jetlag woke me up at around 4am for several days….which meant I caught up on a lot of TV.

It was great being back home for a couple of weeks……but now I find myself on the other side of the world in Europe about to attend TNW (The Next Web) and Domaining Europe. So once again jetlag has been waking me up at 4am…..except I’m in Europe rather than Australia. Doh!!!

So, how long am I here for? About enough time to acclimatise to the time zone before I flip once again to the other side of the planet. I sometimes wonder what time zone I’m actually in until my body reminds me that it really doesn’t make a difference as it just wants to sleep now.

So there I was in a very important meeting…..desperately trying to stay awake (thank goodness for coffee). We then went out to dinner and not surprising the topic of domains was brought up…..and this is my downfall. Despite the jetlag, when the topic of domains is brought up I suddenly feel so energised that I felt like I could go all night.

I find that domains are amazing things that are incredibly flexible with all of the business ideas you can drive off them. And this is what really causes me to travel so much and put up with all of the jetlag. Domains are simply amazing.

Hopefully I’ll catch-up with a few of you at TNW or Domaining Europe over the next few days. If I'm falling asleep then just give me a prod....or talk about domains

Cheers!

There is a massive difference between a business relationship that you have with suppliers versus partners. Many domain investors view their registrar, brokers and traffic monetisation providers merely as suppliers of services. They then go ballistic if anything goes wrong and lash out at anyone that is convenient.

For a start, do not assume that the other person on the end of the skype call is out to defraud you. My experience has been that the vast majority of the people that work in the domain industry are honourable individuals that are trying to put food on the table for their families. So dial back the angst and be nice.

I’ve heard of parking company account managers getting absolutely abused and sworn at by customers for the smallest of things. It’s amazing the stories you will hear if you just sit at the bar at conferences….. To be quite honest with you, I’m stunned at the behaviour of some individuals.

If something really does go wrong, then the best advocate you have is your account manager! Look after them, be polite and work with them when there is an issue. We all work in the technology industry and quite often at the bleeding edge so things WILL occur from time to time. It’s called, “Stuff happens….so get over it.”

Get it out of your head that parking companies are out to steal your money and they have a secret stash of margin ferreted away. In this highly competitive environment any company that behaved in this manner just wouldn’t survive……just think about it for a second, those companies that have behaved in this manner are now closed.

I don’t really know of any company that tries to defraud customers by playing with their revenue share. I’m not saying that this doesn’t happen but I’m not aware of it. There may be rogue individuals that try things on from time to time but they get quickly dealt with.

Also, given that ParkLogic’s algorithms route traffic to the winner at that point in time it’s really pointless trying to play with revenue shares as the traffic just automatically migrates away. As I said to one parking partner, “You will get precisely how much traffic you deserve.” I wasn’t being mean….I was just stating a fact.

When something goes wrong (and remember it will) then contact your partner (ie. account manager) and work with them on the problem. I can almost guarantee there will be a time when you need to ask a favour for some special assistance and let me assure you that those people who are pleasant are more likely to get the answer “Yes”.

It’s all about communication….discuss any issues in a respectful manner with your business partner. The communication must also be transparent. If something has gone wrong, then your business partner needs to openly discuss this and the resolution/compensation that will be provided.

If your business partner tries to hide what really is the core of the issue in question, then my advice is to move on. Whether they are a monetisation provider, registrar or someone else there needs to be open and honest communication so that all parties can take remedial action.

So take a deep breath, keep calm and be professional so that you can grow your business with close reliable partners.

The clock is ticking until on Saturday I jump on yet another aircraft to travel to Europe and the other side of the world. I must admit that other than the 24-hour journey, I’m really looking forward to this trip as I’ll get a chance to catch-up with all of the European ParkLogic clients and friends.

So what takes me to Europe? As well as a whole heap of meetings I’m heading to Amsterdam to attend TNW (The Next Web). The best way to think of TNW is that it’s the TED conference for technology. I hope to come away exhilarated and really excited about some of the great ideas and business models being presented.

ParkLogic is sponsoring Domaining Europe and it’s the second conference I’ll be attending. I’ve always wanted to go to Domaining Europe and it was great that Dietmar, the convener, decided to move it from Valencia to The Hague….which is just down the road from Amsterdam. I have the privilege of speaking on monetisation and being on a panel…..I’ll make sure that the session is lively and interesting!

If you’re attending Domaining Europe or TNW then please don’t hesitate to reach out to me so that we can schedule some time together. My schedule usually fills up pretty quickly so please contact me ASAP. I would particularly like to meet with any domain investors that monetise their traffic.

In the meantime, I would like to wish everyone safe journeys.

I was asked in a forum what I mean by stock-turn domains. These domains are typically multi-keyword names that have a price tag of around $1,000. Like a supermarket selling low-margin goods, the aim the domain investor is to increase the number of domains they sell each year. So what are some things you can do to increase the number of sales of stock-turn domains?

There are some really basic things you can do. For a start, make sure that you have correct whois information with your contact details. Lots of buyers use this information to contact sellers and you can end up having a lot of very frustrated buyers out there if your details are incorrect or out of date (ignoring the fact that ICANN requires correct information).

There are two main markets where you can sell your domains. The first is the wholesale market where you are selling to other domain investors. You’re not going to get the best prices in the world here as they need to make a margin when they onsell the domain to an end user. The advantage of the wholesale market is you typically don’t have to educate it on the value and importance of a domain name.

The retail or end-user market is a little different and I would suggest that you have a selection of stock-item domains in a number of discreet market verticals. This will then allow you to target prospective buyers and potentially upsell them into higher value domains.

Many people sit around and wait for inbound calls to magically come in from red-hot buyers. Since I’m a little impatient I’m not going to do this…..so it’s time to throw some mud at the wall and see what sticks. The first thing I do is map out a typical call that I’m about to make that will help me to glean information or even possibly sell my domain.

This may be a little scary to some people but I pick up the phone and call perspective buyers in a market vertical. Let’s face it, the worst they can do to you is hang up…..so relax and enjoy meeting a few new people. You’ll be amazed at the responses and in the process you’ll either learn a lot about the true value of your domains or amazingly even make a sale.

I’ve found that if you carefully map out your call then you will dramatically increase the chances of selling the domain. If you just pick up the phone and call then don’t be surprised at the negative reaction.

If you have domains in a market vertical, then it may be worthwhile reaching out to the blogging community in that vertical and educate them on the value proposition of a good domain. You may even consider throwing a few sponsorship dollars at some of the more popular blogs. Remember that you’re selling a $1,000 item so don’t get too carried away.

Generally speaking, think of all of the places where your target market will be and think of creative ways to be there as well. For example, if it’s forums, then participate (don’t just spam). Get involved in your target market’s community and with any luck you’ll make a few sales and contacts along the way.

Waiting for inbound enquiries is one thing but flipping the business model and really thinking about generating interest in your products is quite another. Just like a grocer, you are selling products. I’m amazed at the number of domain investors that do no outbound marketing effort and not surprisingly they don’t sell a thing.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

I published an article about ChiP (Chinese Premium) domains yesterday and received a really interesting comment from a reader that I would like to unpack. For a start I would like to thank them for the effort they took in writing the comment as it’s clear they are really passionate about domains.

As the comment is public, here is what they wrote:

Your advice to sell is terrible advice. And then you offer to help CHIP owners liquidate. Four-letter .com prices are positioned to move up substantially in the coming years and you recommend getting out now. You obviously needed a better translator on your China trip. SELLING CHIPS NOW AT LIQUIDATION PRICES IS TERRIBLE ADVICE. PLEASE DON'T HEED.

Yes, my advice may be terrible for a subset of the domain community that is wanting to hold their domains in perpetuity but here’s the thing. The whole point of having an asset is either it produces dividends in the form of an income stream (eg. Monetisation) or you sell the asset for more than you paid for it (ie. capital gain).

If you always believe the price of the asset will increase and you have no need of additional cash, then logically you should hold the asset. The assumptions underpinning this strategy is that domains will be used forever and that there aren’t any market cycles that you can take advantage of.

It’s all about managing risk and everyone has a different risk profile. For example, a number of years ago I sold my traffic portfolio at the peak of the market for a crazy multiple, waited a couple of years and then bought back in at a fraction of the cost. I was managing my risk, taking some cash off the table and watching the market.

If you are running a business, then at some point in time you will sell the asset and crystalise the capital gain. If you plan on selling in the way distant future, then you essentially are saying you have an infinite appetite for risk.

One of the major aspects of risk management is diversification by taking the money off the table and then investing it elsewhere. Everyone is different. Some take the cash and invest it in the stock market while others invest it in personal relationships by having a family holiday. Wherever you choose to invest is your own business.

There is the other issue of cost of capital. What does it cost you to have cash working for you elsewhere versus leaving it in the current asset? If you want to invest in a business and don’t have the cash then it could be you end up borrowing funds…..what is the cost of this capital versus selling the domains now? These are all questions that can only be answered on an individual basis.

Which brings me to the current market cycle. All the data indicates that we have tipped over the peak of a Chinese driven market cycle. Domains I sold in December last year I can now pick up for around 70% of their sale price. Over the last twelve months the Shanghai Composite Index (see below) continues to decline which correlates with what is happening in the domain space.

This does not mean that selling ChiP domains is a bad deal now. Yes, you may have received a better deal last year but in six months’ time it’s likely the market will completely cool off and you find yourself playing the really long-term hold game. Is this something that everyone wants to do? Of course not. Some will hold and some will sell based upon their own circumstances.

Let’s flip this around. If the reader who commented believes that selling ChiP domains at “liquidation prices” (for the record, they aren’t liquidation prices) is terrible advice then they must be a massive buyer of the domains themselves. They have a belief that over the years the domains will massively increase in value and therefore they should logically purchase them. What does this do? It pushes the prices of the domains up as there is more demand and reducing supply.

Now if the commenter is saying everyone is mad for selling and they are not buying then they are either being economically irrational or they themselves don’t have the cash to take advantage of the cheap opportunity.

This brings me to my final point. The lack of liquidity in the domain market as investors buy-in to the perpetual hold model is frightening. This mode of thinking drives some domain investors to reject $1,000 deals for stock-turn domains in the belief that one day they will get $20,000 for them. In comes the massive supply of new gTLD options for buyers and suddenly the potential $20,000 deal is fifty plus years away…..that’s a long-term hold.

The purpose of indicating that my company, ParkLogic has buyers of ChiP domains was an effort to solve the liquidity problem for those people that wished to manage their risk. We’ve already moved a lot of ChiP domains and continue to do so as everyone has a different risk profile.

Never forget that cash provides flexibility to take advantage of other opportunities. As an example, the other day I came across a fantastic business that was looking for investment. I’m now a shareholder and it’s rapidly moving forward….

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.