In this article I’m going to propose an idea that could be very unpopular amongst domain speculators but wildly popular amongst domain investors. Yes, there is a difference between those two camps and it’s this difference that needs to be highlighted.

If we are to look at the domain aftermarket, there are really two major and a host of second tier (not second rate) marketplaces. If I was running either Afternic/Godaddy or Sedo I would look at two things:
1.    How I could remove the garbage domains from my marketplace.
2.    How I could make more money from brokerage.

The garbage domain problem is a real issue. When a person searches for a domain they are often presented a host a trash that covers the real gems that should be highlighted. How would I solve this problem? Easy, tax the domains.

I would charge some nominal fee per month per domain (eg. $0.10 per domain) with a minimum subscription of say, $50/month, to have your domains in the marketplace. All those with good domains will happily pay the fee and the speculated trash gets washed out. There could be a sliding scale depending upon volume, but I don’t think this is even necessary.

Over the last few years I’ve watched many domain investors throw money at some pretty crazy ideas and invest in nonsensical domains. Some of these investors have already completely burnt their cash and have exited the industry.

I’ve also watched the quite diligent investors that have methodically planned how they are going to get a return on their investment….and they’re making money hand over fist!

The secret to any business really isn’t a secret at all but it does require a sustained level of tenacity and diligence. Everything in business starts with a plan and the end point of the plan should ultimately be how the business is going to be sustainable and turn a profit.

When I look at investing in domains it’s exactly the same thing. You need a plan. If you don’t have a plan, then you are very likely about to burn through some of your kids’ inheritance.

Let’s get down to the basics. If you have a reasonable sized domain portfolio, I can almost guarantee that 20% of the domains should be monetised for their traffic. This will provide an immediate cashflow that will at the very least help out with renewals or you may find yourself in the enviable situation of turning over an immediate profit.

Out of all of the different domain investment business models I find myself still a little stumped by some of the actions who invest for domain sales. I understand traffic monetisation and development makes sense but sales is one where I scratch my head…..

I know there are people that make money from domain sales, but it almost seems like a lottery where a domain name is the ticket. The only way to win is to keep on increasing the number of tickets you have in the draw. Inevitably the law of diminishing returns comes into play and a pile of domains are dropped as they were obviously the wrong tickets…..sigh.

Being a numbers guy, I wanted to dig into what was going on in this part of the industry so the first thing I did was make some back of the envelope calculations in Excel. I’ve often commented that Excel is the best computer game on the market….it allows you to model just about anything and then time travel into what would happen in the future. Awesome!

I should say at the outset that I’m looking at the domains that fall into the stock-turn category. So those of you that have the premium top of the line domains should block their eyes at about now….actually, keep them open them for the next couple of paragraphs.

Premium domains….are an interesting concept. You speak to most domain investors and they’ll tell you about their awesome list of domains and like a guy selling you watches down a dark alley they’ll ask you if you want to buy one.

Selling domains is close to the heart of most domain investors. They hear about the big sales being made and look at their own portfolio and wonder why many of the domains don’t get any offers let alone an offer to get them excited about paying off the mortgage. Here’s a list of ten ways that can help you increase your sales.

1.  List your domains on all the marketplaces.
I know this seems a little obvious but so many investors forget to keep their domain listings up to date. Think of it like fishing, you can have one line in the water or ten lines. Each line will increase the chance of catching a fish. Whatever you do, list your domains in the two major marketplaces, Sedo and Afternic.

By listing your domains in the marketplaces you’re hoping to catch the eye of people that may be browsing for a domain in the aftermarket. With any luck an offer will be made, and a sale will result.

2.  Build Your Own Sales Page
A person that clicks on the typical “for sale” link will be directed into an existing marketplace for information about your domain. In the process, they may see someone else’s domain and end up putting an offer in on that one. Even though your domain delivered the traffic, you don’t get anything for the sale of the other domain.

The link at the top of a parked page that says “This domain may be for sale” should point to your own landing page. This page should say something about your domain plus links to related domains that are in your portfolio. This will encourage potential buyers to look at your domains rather than someone else’s.

3. Contact dn.biz
Dn.biz run a newsletter that goes out to thousands of buyers. They regularly look for good domains to feature, so you may as well reach out to them and see if any of yours can be listed.

4. Real Whois Information
Make sure you put real information in for your domain whois data. A lot of potential buyers do look up the whois for a domain and if it is privacy protected or has fake details then it will be impossible for them to contact you to make an offer. Think of the whois as just another line in the water.

Many people have come to the conclusion that investing in domains is dead and yet from my perspective the industry appears to be flourishing. The first distinction we need to make is whether you are part of the industry or a customer of the industry.

Over the last few years many new gTLD registries have been stomping the pavement and doing whatever they can to convince investors to buy domains with their extensions. When investors purchase the domains, they are the customers of both their registrar and ultimately the registry.

The registrar and the registry have done their job…..they just convinced you to register a domain name. The ball is now in your court to decide what you’re going to do with it to provide a return on your investment.

It is NOT the registries responsibility to support the reason why you registered the domain. I know this may seem like bad news but the registries do not have a responsibility to ensure you get a return on your investment….that’s your job.

The only time a registry will possibly be concerned is if the net position of new registrations and renewals goes into a negative trend. If this is the case, they will attempt to stimulate demand through advertising efforts, but they are very unlikely to try and rescue your investments.