buying a domain name
Okay, Kids, Here We Go...
"What You Need To Know About Your Next Domain Name"
I highly respect what Fred has done, and continues to do, to help entrepreneurs and for that I'd like to "give back" myself... and I'm posting anonymously as I have nothing to gain in anyway by sharing this information...
I'm a serial Internet entrepreneur since 1990 (pre-Web). I've been involved in hundreds of projects online (have built more than one Top 500 web site) and I've been a very active and successful domain name 'trader' along the way.
I've personally owned over 50,000 domains on and off during the past 15+ years. I've been involved in some million$+ deals, and have owned some domains that you know of (but I won't name). I've also been involved in 1,000s of smaller deals. So this is a topic I know very well.
I'm a statistics/analytics junkie and what I always loved about building businesses online is how quantifiable and trackable everything is -- so I have some insights to share on this as well.
Why .COM Is What You Need To Focus On
.COM is and always will be King. Period. End of story.
.Com established itself early on as the PREMIUM extension and the entire Internet was developed around it. That is never going to change. All the other extensions (and future ones that will be created) do nothing but cause more confusion. The most powerful companies in the world use .Com and aren't ever going to just switch to something else. As I said, it's already established and never going away. Too much has been invested (not only financially) but in the MINDSHARE of Internet users about what .Com represents.
Any domain extension will certainly 'work' for a Web site, but you are at a major disadvantage by not using a .Com. Even if you have a video startup and try to use a .TV domain, you're still at a disadvantage...
All non .Com domains send some traffic to the .Com version. My analytics and data over many years proves this. Internet users 'default' to .Com names. When trying to remember a site or brand, that's what people type in first. So if you launch your startup with a .Net, just know that you whoever owns the .Com version of your domain is going to be getting some of your traffic (and hard-earned generated leads). AND not all of the traffic you 'accidentally' send to the .Com will still find it's way to your .Net (or whatever extension you are using).
A solid .Com domain implies CREDIBILITY. This gives any startup an instant advantage vs. another using a non .Com domain.
.Com (as with any domain name) IS A DESTINATION. This is why it's so important. All Direct Response Marketing revolves around the mechanism of CALL-TO-ACTION. The destination is the call-to-action. Therefore, it's THE most critical component of setting up a business in our Digital Society.
Tips On Finding a Good Domain For Your Startup
We're 15+ years into the development of the commercial Web. Practically every possible .Com domain name is taken. It's going to be very hard to just "make up" a domain that isn't already taken. You can try, but my advice is not to waste too much of your time if you at least have some capital to just go buy a decent domain. (i.e. $1000-$5000) It's a small price to pay for something you're going to build your company around.
I recommend starting with www.buydomains.com. They have a MASSIVE database of domains for sale. If you're thinking of using a name with "cloud" in it, for example, you can quickly do an advanced search (for .coms beginning or ending with cloud; your choice) and see all the ones they have for sale. Just looking through their huge list of results will not only give you additional ideas for a name for your Startup, but you very well may see a name that would be perfect for your new company -- and you should be able to buy it for a few thousand dollars through that site.
Before you pull the trigger on trying to buy the name (and, no, this isn't legal advice) I highly recommend you take a quick visit to www.uspto.gov and do a trademark search for the name you're thinking of. The last thing you want to do is buy a .Com for a lot of money that's an existing trademark of another company. You should also do a Google search with the name within quotes (exact match) to see what sorts of pages online are using that term and why.
Additional Tips... never use hyphens and avoid numbers if possible. Shorter is always better (less typing to reach the destination.) Always make sure to type a possible name into your address bar (without going to it) just to see how it looks and feels. Some words, like with repeating letters, can look a little confusing as a lower case (which domains are used as) word.
The Art Of Negotiating A Domain Name Purchase
Okay, pay close attention. Here's where you finally get the real value out of all the rambling I've just done. ;-) I'm about to save you a small fortune and help you have a chance at buying domains you'd never have a chance at. This is based on THOUSANDS of deals and a lot of trial and error...
This is the step that 99% of people SCREW UP.
I see so much bad advice about how to approach someone to buy their domain... "contact them and say I see you're not using xxxxx.com, I have a little project I'd like to use it for... would you be willing to let it go?" etc. etc. etc. HORRIBLE ADVICE.
People that are sitting on domain names don't keep paying the registration fees every year for fun, even if they aren't using the name. They know it has value. So don't insult their intelligence making them think they should do you a favor by letting you have their unused domain.
Many Domain Owners Think They're Sitting On A Lottery Ticket
Many domain owners think that one day someone is going to come along and give them millions for their .Com no matter what it is. The fact is, domains are only worth what someone is ready to had you a check for. (A tip to all you wannabe speculators.) I've seen many GREAT domains never get sold, so always keep that in mind. Anyway, because domain owners have this thinking, they are very reluctant to NAME A PRICE. So forcing them to start by naming a price isn't something they want to do, because they're hoping YOU offer some ridiculously high price that they will then counter to go much higher.
Because of this, you MUST start out on first contact with an offer (more on this in a second). The approach of "would you be willing to sell xxxxx.com? If so, how much?" isn't going to cut it; one of the main reasons is that domain owners of decent domains get TONS of emails all the time asking them that, and when they've replied in the past with a price or try to start negotiations so many people are only willing to pay $100 or some insulting price.
So what do most domain owners do? IGNORE YOU. That's right. So if you've ever contacted a domain owner after looking them up with a Whois search and they didn't reply, it's not because they didn't your email (which makes you think that follow-up fax or phone call will do the trick; HINT: it won't.) It's because they think you're like everyone else that thinks they can buy the domain for $100 or so.
Here's how you get their attention and get the ball rolling...
Rule #1: You must start out by making an offer in your initial email.
Rule #2: This offer must be high enough to get their attention and make them at least THINK.
NOTE: Rule #2's amount will depend on how great the domain is.
The two magic price points I have found that work the best (they depend on how valuable the domain is) is either $1,000 or $2,500.
If it's a great domain then $5K-$10K is usually the starting point. These amounts are enough to get anyone's attention. I've bought many $100K+ value domains for $15K-$20K by starting with a $5K or $7K offer.
By starting with at least something that gets their attention they will take you seriously. This is the first step or you have no chance to make a deal.
In most cases for decent 2 words domains, the $1K to $2.5K opener works best.
- TIP: Always know your seller if possible. Do a Whois on who owns the domain, visit the domain in their email address or do some Google searches, etc. You'll often find a struggling Web designer is sitting on a great domain. $1,000 cash to that person is a lot of money. So this also goes into the process of deciding what to open the offer with.
The key here is not to insult someone with a lowball offer, but offer enough to make them know you're a serious buyer.
So here's a sample initial contact email to send... (and I'll explain the rest of the language I use)...
Subject Line: Whatever.com ($2,500?)
Hi, I see you are the owner of Whatever.com. I'm in the process of trying to find a domain name for a client I am building a web site for and think your name could be a good fit. I am contacting different domain owners as we have it in the budget to buy a cool name and Whatever.com is on the list we came up with. Would you be interested in selling it for $2,500? Let me know and I can have the funds wired to you next day or PayPal'd to you. Just let me know your PayPal address. Thanks for your time. -YOUR NAME
Let's breakdown why I used that language...
You've positioned yourself as not the future 'owner' of the domain. You're just managing a budget for a project. This helps because as they will usually counter with a higher amount, you'll play the "sorry, I just don't have it in the budget to go that high" to work towards a price you want. You'll also be able to play the "let me see if the client can approve a budget increase to accommodate that price" etc. etc. This also allows you to play Good Cop, Bad Cop in a way. You're just someone trying to get the deal done to do your job (build the site). You're also presenting yourself as someone LESS EMOTIONALLY INVESTED IN THE NAME -- which will potentially keep the price down. (Trust me, it works very well.)
You mention that you're contacting several domain owners (i.e. making multiple offers). You're playing up SCARCITY, one of the most powerful emotions when it comes to sales. For all this person knows they could reply and say "okay, I'll sell it" but you may come back and say, "sorry someone replied to our email first and now we have a domain."
By closing with the "we'll pay you right away" it makes the offer more REAL. Many of these domain owners get offers that people back out of and have no intention to actually pay. And you're also ASSUMING THE SALE by saying, "what's your PayPal address?" :-)
Again, all of these things are very, very powerful and I have tweaked this initial contact email over the years.
Let's say you initially offer $2,500 on a great name and the owner counters with, "I couldn't sell it for that, I've had higher offers. I would never sell it for anything less than $10K."
FIrst, you must IGNORE anything they say. You'll get the "I've turned down higher offers" response a lot. In the example response about $10K above, unless you would love to have it for $10K, just reply with something like this... "While I do think your name is possibly worth $10K to someone, we just don't have the budget for that much, sorry. I could probably get something more like $5K-$7K approved, but even that's pushing it. Anyway, thanks for your time."
That's it. Cut them off. Trust me, they'll come back to you 90% of the time. Sometimes you just have to be a little PATIENT and you'll save a fortune. Remember to always play up the SCARCITY. "That's just too much for our budget... looks like we'll just go with an alternative name that we've been negotiating for a lot less, even though we preferred your name. Thanks for your time and at least trying to work something out." That's NOT what they want to read from you. ;-)
There are THOUSANDS of amazing domain deals out there waiting to happen. I, personally, buy domains all the time this way. In fact, this is probably a good time to negotiate some deals as many people need the cash more than in recent years.
FINAL TIP: It's not uncommon to settle on a final price that is 30% of what their original asking price was. Keep that in mind as a general rule of thumb. I've had many deals for great names where someone "really wanted $60,000" and we closed the sale around $20K.
Hope this long novel will help some people. Best of luck to everyone.