Of course most of people had experience buying something that was advertised with very different numbers prior to the purchase when compared to what it actually was earning. That is of course if you are buying domains only based on revenue. And while some names revenue is important, you should not be basing your decisions of buying domain names only on revenue numbers, which can be misleading.

I want to talk about real ethics. I will explain what I mean on my own experience. Few years ago I registered typo of a generic domain name. There was a project running on plural version of the domain, and I had single version. It was nothing special until plural version started something, which brought 1,000 visitors a day to my domain. That was converting to around $20-30/day. So I decided to research a bit and found out that they were running some major advertising deal with a very big website. Then I decided that it might be a good time to sell it.

So I posted it for sale and had few interested parties interested in 30x/month range. And one person offering me 36 months based on $30 per day revenue. 32k in other words.

And I was like. Let’s research once again to be sure I am not selling cheap. So I did. And found out that this major deal between those websites will run for 4 more weeks. And then it will be over.

Now how many of you would try to sell quick?

I decided not to sell. I imagined myself on buyers place. And while it would have been his fault of not doing enough due diligence, I still should be responsible. So yes, in 4 weeks traffic went down to 20 per day. And now that plural version is not even responding.

I never said that potential buyer what he avoided. I just said it was no longer for sale.

It did cost me $32k.

Share your story or thoughts on this matter.

So what do we have now. We have some massive automatic appraisal thing going on. Everyone know about it’s quality. The only way we can/should use that is to extract decent names from a huge list. That’s it. They report wrong seo volumes, wrong advertisers, etc. And numbers are off.

So here is my look on this. No matter what domain name have the amount of people interested in it(if at least one person is interested).

What are the crucial metrics to a domain name and which of them are more important then the others?

Here is my list

Domain name must be .com (for a very obvious reason, .com is the best and got traffic leaks from any other extensions + type-in traffic)

Search volume for the exact keywords (small addition, there is a big difference in 500,000 exact searches for “.psd tutorials” and 12,000 searches for “consolidate loans”). Every single domain approach should be different.

Type-in traffic. (yes, it is nice. however when you are using short .com’s you are not getting targeted visitors – no matter what sellers say. If you are looking to buy irons.com – that small amount of type-in traffic will not be the irons you think they are. They will be golf irons, steam irons, electric irons, some music band named irons, someones dog named irons, someones school project and they check for domain name. Yes they will be all checking up irons.com and NO you will not get convertions from that traffic. Ok, maybe you might get 1% convertion).

Another important metric is would you buy this domain for more. (If for example I buy a domain interiordesignideas.com – which is my domain for 9k. I need to know, is it really possible to get more for it. Would the price that I ask be a fair price for someone else. Would I be able to unload it at the same price if I get no success in reselling at a higher price? This is very important).

Product domain name. (When I say product I don’t mean only domain like pearlearrings.com, newyorkshows.com is a product, memorycards.com is a product, familyvacation.com is a product. Something that can be branded and become a point of sale is a product. And what is not a product. Domains like others.com, unsure.com etc. can be a product in your head, with your plan – but so can be any other domain name).

Unique position of a domain name to competitive domain name. (Recently I inquired about RefinancingLoan.com after finding an email in 2007 that I sent to them and they reply back then was: we will email all interested parties and sell to highest offer. So I check whois and it was still the same owner. Then I sent email asking how much they want for it. And he said: six figures. So I replied: “lol”. And he replied: “personalloans.com sold for 1mm”. And I replied: “but you are not selling it, you sell something very different”.  Can you really compare apples to black caviar. No, you can’t. Even if there are more buyers for apples, you can unload rare sort of caviar for much much more. And If you are selling apples there are tons of different sorts. So you better have the best one. But it’s a totally different market. So refinancingloan.com, I would consider all these before: refinanceloans.com, refinanceloan.com, loanrefinance.com, refinancing.com, loanrefinancing.com. In this case for the buyer it would have been much better to just buy something like refinancemyloans.com or refinancingmyloan.com – as you see there are no similar approach).

Domain name length and age of registration. (Yes, I combine them. Both of them are important, none of them is super important. I did sell roleplayinggames.com and refinancemortgagerates.com for very good amounts, while some short domain names didn’t sell nowhere near).

Advertisers. (Yes, they are important. You can get direct ad proposals from them, you can get their targeted ads via adsense on your website that pay higher, you can sell your domain/website to them – so what you want is more of them and the higher they pay per click – the better).

If it is a product domain name, are people actually buying it on the net. (Sometimes I see very strange bids on auction. People are buying well known product domain. But they don’t make sense. You can’t build a store for something people are used to buy together with their groceries. When you are trying to buy a product name. Think. Would you buy it over internet yourself. Ask your friends would they do that?)

So now when we have all the metrics, how should we use it. Let’s take a domain name for example. Flippa.com did mention my previous post in their blog. So let’s take one of the domains listed in their marketplace.

Fitness.com – price tag = 4 million dollars. So yes, it is a great name. Everyone would love it. Bla bla bla bla. Citing the seller revenue is: “Our monthly revenue is between 12,000 – 18,000 USD“. Then seller adds in comments “If you are looking to just take what we’ve built and try to make money on the site, than this domain is not for you. If you have a good business model that could benefit from 3m visitors / month, than this is more up your alley.

For example, a standard conversion rate is 2% … 2% of 3m = 60,000 clients / month. If those 60,000 clients bought something with a profit margin of $10, that’s $600,000 / month.”

Right. Now let’s have some analysis. You had this domain since 2004. You tried hard and you could only make it earn 12,000 per month in 8 years of work. It is either you are very bad or the business model was not viable at all. And you are trying to sell it based on what some other mythical person could do with website, so it will earn 30x times more then you did, but based on revenue you are asking 27 years of revenue IF revenue will remain at 12k and will not drop.

I understand our example is not pure domain name and we can’t really look at metrics and be objective. So we just try to use the success meter here.

What would be comfortable number for us to pay for it. I would say 60 months of revenue. Because no matter how good it is, there is no guarantee it will make more then 12k. So we need a point where we can sell it for more. We don’t just buy something and keep it. We want to make profit, right. And we only want lower revenue amount, we don’t know and can’t be sure it will make 12k in future, let alone 18k, so why use any averages.

So at 12k that’s 720k dollars. Very fair amount to me. Fitness is great generic domain. But you need GREAT website, team, supply and great contract with a shipping company for it to become GREAT fitness related products to sell. Yes there will be a small % of people who will buy on this website without comparing to others, but to be industry leading store you will have to be more then just that.

So at 720k dollar I would put our success meter at 100%. Because dependance on can we sell it for more or not is based on what we put in it, how much work and money we invest. So if we are successful and make 2x then it was. Then our success meter doubles to 200%. Everything that we sell about 100% is a pure profit.

Now if it drops, we lose money. No need to explain. We might find someone stupid who will pay what we paid or even more without any business plans. Fitness.com WOW. But we definitely can’t rely on that.

Simple yes. But here is why it can be a good model to appraise domain names.
We can buy fitness.com for 360k for example. That’s 200% success meter. Much better deal isn’t it. We can always try and sell for 100% and get that profit.

We can also buy for 1,440,000 at 50% and hope to sometimes get to 100%.

Now the number of revenue months and other factors should be based on the metrics. If it was fitnessstore.com then we would have many domains better then it. And success meter would have go down based on that etc.

I am not offering anything 100% solid, otherwise I would have built a website. I am just saying this system can be implemented for easier tracking of ROI. You only need to think about all metrics once, determine the 100% success meter price. And then you know is you having a good or bad deal.

Hopefully we can discuss about this matter below.

So after a few weeks of listing crap domains for $200,000 on ebay and having some fun with that I started to get worry. Like, come on, I spent $1k – give me some $100k profit. Why is nobody buying my crappy domains that don’t make sense even to myself if I look back at those domains.

Then I decided to actually get some knowledge. So I went to find some useful resources. Google’d that. Found some domain forums. namepros and dnforum. Still couldn’t figure out why something is good and something not so good. Well, of course obvious domains like cars.com are good no matter if you have domaining knowledge or not. But I could not understand if interiordesignideas.com was reg fee domain or was it xx,xxx.

As you may imagine it took me some time to get that information right. During my first year I managed to sell few of the .eu domains. Poor guys who purchased them, they had less idea about the business then I did. And I was ready to start with the main focus(which remains main focus today as well) – generic .com’s

And I can tell you that back then in 2007-2008 domain forums were a crowded place. Probably they are crowded now as well, but back then they were crowded with people who actually make xx,xxx and bigger sales happening. You could have bought decent names, you could have found deals in “domains wanted” and actually sell something you own for x,xxx to xx,xxx.

Yes, you can still do it now if you have amazing domain and you want to unload it for cheap. The problem is, people on domain forums nowadays only want to buy good generic names for super cheap. Is it another generation of domainers that don’t want to make mistakes and just trying to buy very cheap to make profit. Or most of forum domainers or so called resellers are tired of multiple domain newbies sending them PMs with crappy domains for xx,xxx+ price tags.

I am not sure, but I can tell you one thing. Domain forums are VERY unfriendly to new domainers at this time.

• New people can’t really find the proper information on entering the business.
• Domain buyers on forums are mostly looking to buy good generic .com’s with 5,000+ searches for under $1k.
• You can’t really sell as well. I tried to list numerous high quality domain names(which I later sold for higher amounts) on forum and I had like 400 views and 0 action.
• Lots of people try to trick or blatantly rip you off selling you low value domain names 10-25x higher they their price.
• Domain market is not a liquid market. Therefore even with a good domains you need rich buyers. And in domain forums that is not an option. Or you will be ripped of by those buyers to sell domain for 1/4 of it’s price.
• Too many nonsense and negative information floating around forums. More educated domain owners trolling less educated ones etc.

So the question are:

What do we need to take the industry to the next level?

What do we need to create to make domain business closer to the liquid market?

How can we provide an objective view on the market?

Should we pay attention to the people who regged xx,xxx+ domains for reg fee back in 2000 or earlier at all?

Would they achieve any success in today’s domain market?

And lastly, should we even spend time going to domain forums today?

Can’t promise everyone will like it, but some people will for sure. And pretty much everyone will get a view from an interesting angle.

Good to be back!

First of all what is exact searches everyone is talking about? It is the amount of searches people do for your exact matching keywords per month. The number however is no 100% accurate. For example if your domain keywords said to be receiving 100,000 exact searches per month – that does not mean you will get 100,000 visitors if you will obtain top google position.

Why? 1) because not 100% of those who are searching for it will end up clicking on YOUR link in google search results. 2) numbers can vary a little bit(sometimes more then a little bit). 3) there are local and global search volume, so you need to know how to check it and what all those numbers mean.

So how do we find what our domain is performing? I will take an example of one of my domain names to show you. MensJewelry.com

Now let’s see how many exact searches does this keywords get per month, based on the previous months numbers.

So what do we see here. First of all we selected EXACT in the “match type” drop down menu. Then we sort the column by Local Search and select “All Countries and Territories” + English language.

Now we can see that global volume of searches for February was:

a) 450,000 for “men’s jewelry” keyword and 301,000 for [mens jewelry] keyword. that’s nice to know.

b) monthly global average is 550,000 and 368,000 for domains. That is if you take all searches for the last 12 months and divide them by 12. We can think that since 450,000 in February lower then average 550,000 – then probably searches go up and down. Can they get higher when there is holidays? Of course they can. Seems logically to me.

Now let’s try and see how many searches United States users provide from this global total amount. Let’s switch country to “United States” and have a look.

Now we can see that users that are searching [men's jewelry] are pretty much all coming from United States as global 450,000 and United States 450,000 searches do match. On an interesting note there is less people searching for [mens jewelry] in USA then they do worldwide. Perhaps more people are searching worldwide because they can’t spell the word right. As it is one of the frequent mistakes from non native speakers to write [mens] instead of [men's].

Another good thing for us is that men’s jewelry and mens jewelry results in google are practically identical, which means google understand that there is no domain names with ‘ in them and is matching [men's jewelry] search with a mensjewelry result.

So we are looking at 676,000 United States exact searches in February here.

In the next article I will explain my theory of exact match searches importance for commerce domain names with some real examples and will tell you how I appraise domain names when I purchase them from direct owners.

Feel free to comment. Have a nice day.

So what I come up with is this. Post a comment under this thread including the subject that you are interested in. And I will group them up in videos and will give you answers based on my expertise.

Sounds good? Fair offer for you, free advices are never bad.

That doesn’t mean that videos are not coming though. I will try to get new video up and running soon. Have few important things to share.

Stay tuned.

What is the meaning of domain development? I am sharing my thoughts on what development really is and what you need to avoid when you start thinking about domain development. Don’t forget to follow me on twitter!

Today you will hear my opinion on International domain names(IDNs). More appraisal tips are coming later this week I think. Purchased HardDrives.com yesterday.

Today I decided to share my opinion on 10k+ sales from Traffic Amsterdam. Probably nothing fresh and new for the crowd. More reviews coming soon in next videos on names, don’t miss them! And don’t be shy to comment.