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How to Get a Great Domain Name #3 ? Purchasing

30 Sep 2016
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Acquiring Already Registered Domains

In the previous parts of our guide we talked about adding keywords and hyphens, using alternative extensions and making use of online domain name generators.  In this part we talk about aftermarket acquisition including back ordering and private purchases.  We also take a look at domain valuation and how you can pitch your bid at the right value.

Back-Ordering

Backordering is the easiest place to start and has the fewest potential hurdles.  When a name is registered it is effectively licensed to the registrant for the agreed period (usually 1 or 2 years).  If the person holding that name fails to renew it, the domain will be released back onto the open market.  

Status Codes:

ACTIVE - Set by the registry.  Domain can be modified by the registrar only.  Renewal possible.

REGISTRY-LOCK - Set by the registry.  Domain cannot be modified or deleted by registrar.  Renewal possible.

REGISTRAR-LOCK - Set by the registrar.  Domain cannot be modified or deleted.  Renewal possible.

REGISTRY-HOLD - Set by the registry.  Domain cannot be modified or deleted.  Renewal possible.

REGISTRAR-HOLD - Set by the registrar.  Domain cannot be modified or deleted.  Renewal possible.

REDEMPTIONPERIOD - Set by the registry following deletion request (if requested within first five days the deletion is immediate).  Domain cannot be modified or purged, only restored.  Status held for maximum of 30 days.

PENDINGRESTORE - Set by the registry following a restoration request from ‘redemptionperiod’ status.  Appropriate docs must be provided to the registry by the registrar within 7 days.

PENDINGDELETE - Set by the registry.  Once set any requests to restore will be rejected.  Domain will be purged in 5 days.

There are an increasing number of sites on the market now where you can confirm an interest in an already registered name.   They will then keep monitoring the status of that site and at the first opportunity attempt to register it.  Depending on the service that domain will then be made available to you or be posted to an open auction where you will have the ability to bid.

The two services I recommend you check out first are SnapNames and Pool.  I’ve used both of these successfully in the past.  Their rates are fairly reasonable and they have a good record of capturing names that are released.  Competing services are offered by the likes of GoDaddy.com and similarly sized domain registrars.  

Many registrars have an exclusive partner.  Use a WHOIS search to find the registrar and find the partner by checking against the table below.  

 

Auction Site Registrar
Go Daddy Auctions

Go Daddy, Wild West Domains

NameJet

Ascio Technologies, DirectNIC, eNom, Fabulous, Network Solutions (NetSol), Speednames

SnapNames

Bulk Register, Directi, Domain.com, Dotster, Melbourne IT, Moniker, Name.com, Register.com, Tucows

Pool NameScout
N/A

1&1 Internet, EuroDNS, FastDomain, MarkMonitor, Rebel.com, Schlund+Partner

Over the last few years more and more entrants into this space (both in terms of services and aspiring registrants) has made this process extremely competitive. Any domain even remotely valuable will be being requested by a several parties the instant it releases. Exactly what makes a name more or less valuable is a difficult question to answer.

Domain Name Valuation

If you want to own a name which is already registered, the first step is to understand how much it is likely to be worth.  The most honest and straightforward answer to how much a domain is worth is that it is worth as much as the seller and buyer agree on.  Obviously, that isn’t a satisfactory response but it is probably the most accurate.  Lets imagine then that we are not satisfied with that, how can we establish a good offer price?

The starting point is to assess the basic factors impacting on value:

Branding

Brands are important.  They differentiate otherwise similar-looking services and help your customers to find you and keep coming back.  Consider how likely it is that a customer would be able to recognise the domain as a brand, and be able to remember and re-type it again in the future. Great examples are last.fm, netflix.com, and twitter.com.  Those services have highly brandable names because they tell you about the nature of their business or vision within the domain name itself.

Natural Query Trait

A natural query trait is a measure of how similar a domain is to a search by a potential customer.  For example, if someone was looking for dry cleaning services in Milton Keynes, then drycleaningMK.com would be of value.  More mass market would be alloywheels.com, englishtutor.com, homeexercise.com.  The closer a domain is to a searched for phrase the ore inherent value it has.

Marketability

This is the measure of how valuable to traffic to the site is likely to be.  In particular the likely purchasing power of the potential customers of that product or service.  One good way of gauging this is to look at internet marketing ad systems such as Google Ads.  How competitive is the bidding on ads with included or related keywords.  For example, it is much more difficult to purchase a first page ad for ‘car insurance’ than for say ‘bespoke curtain designs’.  Where are domain has a strong association to competitively priced ads it will likely have a greater value.

Length of the Name

In general the shorter names are more valuable.  A good rule of thumb is 7 characters or less for the most valuable.  They are easier to remember and type, especially on mobile devices.  

Dictionary Words

Those domains that are a correct spelling of a single or couple of words in the target language of the user have a greater value (in general) than made-up words.  This is because they have greater immediate impact on potential searchers.  There are some famous rule breakers of course including Google (a misspelling of googol) and Flickr.  

The single-dictionary word = greater value rule is often hyped up by sellers.  Obscure single words are worth much less than good multi-word domains.  For example, homeloans.com is worth much more than asparagus.com.  

Numbers and Hyphens

Using numbers or hyphens in a name can make it more readable, for example 123-reg.co.uk.  However far fewer people are searching for queries which include number or hyphens and so you are far less likely to be found through natural search results.  Numbers and hyphens, will in general, reduce the value of a name.  

Putting these together as a very basic rule-of-thumb:

Loans.com - millions

HomeLoans.com - tens to hundreds of thousands

CompareHomeLoans.com - thousands to tens of thousands

123-Home-Loans.com - nothing

Other indicators:

The number of times the seller is contacted about a potential sale

More requests means more demand, which means a higher price

The TLD, is it a .com?

A .com is still generally the best.

Are suffix or prefixies included?

In general names starting with a prefix such as  ‘e’ or ‘i’ are generally of lower value.  For example cleaners.com is worth more than ecleaners.com.  

Age

Domains previously registered for longer periods are regarded as being of greater value.

Domain valuation requires as much judgement as it does scientific measurement but the tips listed above are good place to start when setting your starting offer.

The top five high-value domain purchases:

Insurance.com $35.6 million

VacationRentals.com $35 million

PrivateJet.com $30

Internet.com $18

Insure.com $16

Purchasing a Name

Now we’ve established our acceptable budget its time to make an offer.  The first step is to do some basic background investigation on the domain and see its current and past status.  This will provide a good indicator of the likelihood of completing a successful transaction.  Start by doing a simple check on the site.  The best outcomes are either a big for sale sign posted on the homepage or a completely blank page.  Look for any obvious contact details.  

The next step is to do a quick WHOIS search to find or confirm the contact details for the domain.  There plenty of these providers, some offer better levels of details depending on the registry setup.  Try a few such as who.is and whois.net.

More and more registrants are using proxies to register domains such as GoDaddy’s Domains by Proxy services.  These services replace the owners contact details with their own to prevent them being looked up by spammers.  If this is the case with you name its not the end of the world but just makes things a bit tougher.  First off send an introductory email to that proxy service explaining that you would like your details passed onto the potential seller.  Next go to archive.org and use the ‘way back machine’.  This will provide historic snapshots or previous web pages hosted on that site.  With any luck an email address will be visible.  If neither of these approaches work then a direct contact may not be possible.  in which case you may have to rely on that name being available on an auction site.

Before making contact with the owner, be sure to lookup the name on all the popular domain auction sites including GoDaddy Auctions, Sedo, Afternic and the rest (even including eBay!).  You can use their services to help determine the current asking price.

At this point you may find the domain being listed for much more than your budget.  Do not be put off.  This is a tactic used by many sellers.  They have often used automated tools which tell them they are sitting on a gold mine.  Many of them believe it and list for hugely unrealistic valuations.  Some of the auction sites will give you an indication of how many people have viewed a listing and the number of previous offers made.  Where these two numbers are high, you know you will have a more difficult task to negotiate a lower price.

Make your offer either directly or through the auction site.  I would recommend using the auction sites for at least your first few purchases as they provide a good framework to complete the transaction.  Start with a reasonable offer or you may not get any response at all.  Many domain name owners of quality domains will receive multiple joke offers in a month.  It gets boring and is not worth their time responding.  Let them know you are serious but avoid any display of an ability to pay an inflated price.  Use a personal email account that cannot be used to find you online or give any indication about how you might use the domain.  Do not feel the need to explain what you want the name for, thats no ones business but yours.  Do not explain your grand plans or suggest this is a starting offer only.  Be polite, be professional, and come across as reasonable in all your communications.

If for some reason you decide it better to complete the transaction outside of an auction site, then I highly recommend you use a service such as Escrow.  Escrow is used extensively in the States for all kinds of transactions, and I have used it successfully a number of times for domain purchases.  It is not the easiest process to follow and at present requires the use of international money transfers (or faxing of your details which is obviously not advisable).  In America you can use PayPal.  However, it provides structure and some security for both parties.

With any service you use there are going to be fees involved.  The can be either a percentage of the sale value or fixed fee of a few dollars.  Do not under any circumstances be tempted to save a few dollars by sending money directly to the seller.  It just isn’t worth the risk.

Conclusion

We hope you have enjoyed this posting and the others in the series.  If you follow the tips we have set out in all three parts, you should find it much easier to purchase that great domain name for your next venture.

Please send us any comments or questions you might have.

 

 

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