An Outsiders View Of Domain Name Drops

Tonight I had the pleasure of speaking to a group of people in Perryville, MO interested in growing their business with a specific interest in how to use the Internet to their advantage in doing so. The invite to speak came after one of the members of the group attended a seminar a couple weeks back and thought that the information would be useful to the group she organizes.

During the presentation there is a point where keyword domain names and domain name education in general comes up, when presenting this I work to make it as non-technical as possible but usually enjoy when questions arise since I obviously have a deep interest in domain names and I always find it very interesting to discuss domains and the power of selecting the right name for someones business.

Tonight was very interesting in that one of the members of the group started describing something she ran into, this was the first time I had every met  someone from the "other side" directly that had ran into this, a bit of paraphrasing below:

"I used to own a domain name for my business but then I got an email to pay for a renewal or something and thought it was to technical so I did not do it, I thought if it expired I would just have my son do what ever computer stuff needed to be done to pay for it when he got back from college. When he got back and went to get it someone else had it and it had a bunch of links to things on it and a place where I could offer to buy it for $2,000."

As domain investors we understand the value of keeping our names renewed, it is interesting to see the lack of understanding in how important keeping someones web presence consistent over time is. This person was willing to take the chance of not renewing her name because it was "too technical."

I explained a bit about how the process works and that ones name must be looked at as real estate, that the proper domain name is no different than owning a key piece of property. Once explained in that manner it is amazing how well people relate. What was really nice was that out of the group no one had anything negative to say about the practice of domain drop and catch and in fact thought it was pretty savvy business. You never know how a group will react.

One of the other interesting conversations was about how much it costs to buy a domain name, one of the people had ran into a name she wanted but once she saw the price was in the thousands she chose not to get it, not because of a mid $X,XXX price but because she knew domain names had renewals yearly on them and she thought if she paid that price she would have to pay it every year. I can honestly say I never thought this would be an issue someone would come up with. It was nice to help her out a bit and explain that the price was only for the initial purchase and after that she would pay the yearly renewal fee at whatever place it is registered. I wonder how many deals have not happened due to this.

Canceling Domain Names – Thinning The Herd With Domain Drops

As with many people over the past few years I have managed to acquire a collection of domain names that includes some that I plan on doing business development with, some domain names I plan to sell but many others that at the end of the day may have value but the return on my time invested to sell may not be worth the effort. Based on this, over the last year or so I have been thinning the domain herd that I have. Many of these domains have been acquired either through a transaction where I acquired several domains at once and they came as part of the package or were pickups I made myself through other means as individual domain names.

But, although they may be of some level of quality from an operational perspective they still can be a distraction and I would prefer to focus on a core set of domain and development investments to allow me to get the most bang for my buck/time. To give you an idea over the past year I have went from 1,300 names to somewhere around 650. Guess what, that is still too many. Over the next few months I am going to be moving to decrease the number of names even further. I preach against being a domain collector and for the most part I feel I have decreased the number of domain names that I had a few years back that I had continued to hold just based on emotional attachment (i.e. I bought it so it must be good....).

One thing that may surprise people though is I do not necessarily wait for the domain to expire. I prefer to simply cancel the name at whatever registrar it is held at and let it drop. Why not let it sit? Well as it sits it can end up being a distraction or for some reason I may decide that maybe I should keep just that one, well maybe two. I would prefer to limit the distractions and focus on the names that I feel can be developed or sold into something more profitable.

I recently sat down and did a bit of an informal review of what I had bought over the last several months compared to the few years before. Although I had managed to get some good pickups a few years back the better quality (as a percentage of names bought) really has come in the past year or so as the domain collecting stopped and domain investing and domain business development began. Sometimes you know what is right, you know the names are really worthless or not worth the effort required to sell it (50 dollar names), but it takes sometime to pull the trigger to get rid of them. What it takes is sitting down and determining what your real goals or, is it to be a profitable business or is it like baseball cards where you may have 10s of thousands that you collect but the real investment maybe in core few. Domain investing can be much like that if that is how you choose to do it, and to be honest that is ok if that is what you want. Personally I would like to focus on the profitable domains only.

Give me your thoughts, does it make sense to drop a distraction or just let them ride?