Domain Investment New To You – STOP AND READ THIS
In the past several months I have had many friends that have had interest in getting into domain investment. They had heard me talking about various things, whether it be a nice ROI on a domain flip or passive income from domain parking or Google Adsense. It was always interesting to watch peoples minds crank as they started grasping the "behind the scenes" work that happens to bring this little Internet thing to life. How SEO determines who they click on when doing a search. How you cannot just go buy any domain name and expect to have success.
I always enjoyed bringing new people into this industry but one thing I learned is that almost everyone makes the same mistakes. Here is a quick list of the most common mistakes I see from friends who have started dabbling:
1) Trademark Names - This is probably no surprise but it is usually the first thing that I end up explaining after already doing it once or twice.
2) Registering names because they sound cool - This is a pet peeve of mine that seems to continue even after some people know better. I cannot even start count how many emails I have received over the past few years from people sending a name to get my thoughts on it because it seems cool.
3) Registering hundreds of names in their first few months - Nuff said.
4) Leaving their names parked on their registrars default parking - Only person making money with this is the registrar you bought the name through, i.e. Godaddy in most cases.
5) Never listing their names with an aftermarket - I have recently had an experience with one person who had been a "domain investor" for 2 years but did not even know how to sign up for Sedo. Got that fixed but either way, 2 years and could not figure out why he had never had an offer for one.
6) Falling for the domain appraisal rip offs
7) NEVER SPENDING ANYTIME RESEARCHING THE INDUSTRY TO LEARN THE BASICS
This last one is probably my biggest concern. If you are spending hundreds or thousands of dollars to step into something new wouldn't you want to spend a month or so reading and learning about what it is you are stepping into. As much as domain investing is new to most people there are plenty of easy to find resources out there.
Two of the most recent people this came up with had been buying names and complaining they either a) were not getting offers or b) not getting any parking revenue. Now as far as offers, neither person had the names listed with any aftermarket site and as far as parking, if you have not put the time in to research what type of names bring revenue then it is likely that the names purchased will not bring revenue.
With both of these people, after a different but related question from each one I set a rule, I would not answer anymore domain related questions for a month or until they could prove to me they took the time to research and learn and they were not allowed to buy any more domains until they did research, I am sure they did not like me telling them how to spend their money or not to spend money but I was honestly trying to help. There is no quick answer or fast path to success in this domain game. There was a good post at Domainvestors.tv about this today as well.
Now, I did not want to send them off blindly so I gave them a few places to start with their learning, here they are in no particular order:
2) Namepros.com
3) DnForum.com
Now, the question is does it work. Does the tough love have an effect. Well without a doubt I can say in both cases it made all the difference in the world. Within a couple weeks of starting the research one of the people actually had hand registered a name that had dropped recently that is receiving on average a dollar a day in revenue from parking. In the other case the person has been able to register a few names of high quality that are prime for development and are minisites at this point. Both people now focus on domain investments that have keyword search potential and not on names that just "sound cool". Trademark names are no longer an issue and actually ROI on investment is.
I would say virtually all of us made mistakes when we first entered this little world, I want to make sure I help my friends sidestep those mistakes and have as much a fast path to success as possible.
Great points in the post, I think that knowing what is going on in the industry you work in no matter what the industry is, is so important. You need to know what the trends and big events are so that you can stay on top of your game.
Brian
I think also that a lot of people who do park their domains don’t realize they can optimize their parking pages.
Why didn’t you write this a year ago when I first started out! I think I made every mistake you pointed out!
Over the past year, I’ve gotten wiser and have finally realized the value in your points about researching the industry to learn the basics. You can add your blog and twitter posts to the list of resources to check out.
thanks…
Michael
@Chris – I believe you are right, people would be surprised the difference a bit of optimization can make or parking with a different provider.
@Michael – Most people do make the same mistakes as the others, do not get discouraged. The trick is to try to make as few of them as possible moving forward. I would venture to guess, whether people want to admit it or not, they still make mistake purchases here and there.
Thanks much for the nice comments!
That’s true, the mistake I had was registering so many cool sounding domain names which is really worthless. Plus the learning curve was a bit longer to get a good grasp of the industry, deep research really is required.
I also fell victim to many of the mistakes you have mentioned. I have spent a ton on hand registering domains that I thought would make me rich overnight, boy was I wrong. I completely agree with the part about registering names because you think they are “cool”. This is a bad idea in most cases. I guess a good way to look at it is… If the name is so “cool”, why isn’t it registered already?
Ohhh this article is so painfully true in the beginning…
It all comes down to your research tools.
Find Them
Learn Them
Use Them
And most important of all – justify each purchase with search volume.
Good luck and happy domain hunting!