Domain investing is the act of purchasing and stocking up on domain names with the sole purpose of selling them later for higher prices.
The amount that qualifies as higher price here is relative as some people have sold domains for $100 while others have sold theirs for millions. The key is to ensure your portfolio is profitable enough to keep you satisfied about your business. Here are some of the things you should do.
Keep an eye on the future
"Most of the most profitable domain sales recorded were as a result of individuals showing some forward thinking and forecasting what would happen in the web space over the next few years". "You can mirror their results by focusing on domains that would become high selling in the future due to where the word is headed". Brendan Wilde - Umbrella Domain Name Experts
Climate change, interactive technology, virtual reality, smart clothing, robotics etc. are some of the trends that will gain traction over the next few years. Take advantage of new gTLDs and invest in domains targeting these areas.
Don’t discount .com completely
We may have over a 1000 new gTLDs in circulation today but the most successful domain investors will tell you that .com remains king. While you look for profitable new extensions, ensure .com extensions make up bulk of your portfolio. The risk factor of domains in that category is significantly lower, at least for now.
Short domains are still the best
When it comes to domain investing, people tend to focus on one word domains or 2, 3, 4 and 5 letter domains. However, it is very difficult to find those kinds of names today. When they are available, they are either vowel-less variations of existing domains or too costly. This doesn’t mean you should invest in long domains. Avoid investing in domains that are more than two words. Two word domains are visually appealing, easy to remember and easy to type. Interestingly those factors play a large part in the marketability of any domain.
Ensure the domains can be branded
The words you choose for your domain should flow nicely. If it doesn’t sound great when spoken, you should be carefully about investing in it. A good trick is to ask a third party to give a first time impression of the name. The name must equally relate well to the industry you are targeting as well as the audience for it to be a quality investment.
Avoid invented names
Google, Twitter and Facebook are all examples of invented names. The owners however, didn’t pay anyone for the domains. Therefore, it is not a good idea to invest in these names. The individuals you are targeting will most likely invent their own names instead of buying one made up by someone else. Names you are investing in should be real. They should be made up of words people already know and may be searching for.
Don’t invest if you don’t have a buyer in mind
Before you add a domain name to your portfolio, you need to know who you are targeting. If you don’t know what niche industry or audience you are targeting, chances are you are making a poor investment. You should also know if the domain will fit an individual, large organisation or small business. If you find a domain that falls in a good niche and can be used by a wide variety of individuals, you should consider investing in it.
Before paying a certain amount for a domain, go to well-known domain sales websites and forums to see prices of similar names. This will give you an idea of what you should pay. This of course doesn’t concern you if you are registering a fresh domain at any reputable registrar instead of buying a domain from someone.
Don’t sell too early
Imagine being front row at a Michael Jackson event in 1990 and being fortunate to have him sign a shirt for you or catching his shirt thrown into the crowd. You will be tempted to sell it for a $100 days later if someone makes an offer. However, if you persevered and locked that souvenir away till today, you are guaranteed to get at least 1000% more than that amount. You don’t necessarily don’t have to sit on your domain investments for decades but you get the point. There are millions of new websites popping up each year. There is a high chance you will make more money for that domain if you wait another year or two!
Parking is not enough
There are many decent domain names that have remained undiscovered because the owners simply parked them instead of publishing them and adding quality content. The search engines are your most powerful advertising tool. Instead of waiting for someone to somehow approach you for a domain, set up a wordpress blog script on it. Publishing relevant content increases the chances of your target customers finding and buying the name.