Quick question: Has the idea of investing in domains ever crossed your mind? If your answer is No, you are missing out on a lucrative online business. The value of a domain increases depending on the website it is linked to. The more activity the website records in terms of economic and marketing activities the more the value of the domain. Most investors are therefore able do double their investment in a relatively short time.
Here 8 tips to take into consideration if you want to become a successful domain investor.
1. Learn about Domains
You definitely do not want to do things blindly because you did not take enough time to teach yourself the important aspects of the industry. To become a successful domain investor, you must begin by leaning about the industry. Take time to read broadly about domains and if possible even attend a number of conferences and seminars to meet like-minded people. This way, you will quickly learn the nitty-gritties of the industry.
2. Stick with .COM domains for a start
Now more than ever, there are plentiful top-level domain extensions that domain investors can choose from. For a start however, it is a better idea to specialize. When starting out, you most probably understand .COM domains most, and maybe a few others like .NET, .ORG, and .BIZ. You should understand that all these domain extensions (and the numerous others not included) have their own unique pros and cons.
Luckily, the .COM domain extension has a long record of giving consistently returns to investors. As such, it may be a wise decision for you to begin investing in this extension only because it is much easier to manage. When you become more familiar with the market, you can then branch out to other extensions.Highlight: Register .Com is very cheap for now, with just under $1 for a year at GoDaddy (The World's Largest Domain Name Registrar) !
3. Find a Registrar who is Friendly to Domain Investors
If you have done a little research, you will have noted that there is a huge number of domain registrars, most with questionable security. You should therefore take your time to sift through the registrars to get a good one who matches your security standards. This can be achieved by reading reviews of the registrars you are interested in.Domain Registrar Recommend: GoDaddy || NameCheap || Domain.Com
4. Choose Catchy Domains
One of your top objectives as a domain investor is to invest in domains that are trendy. Ones that are most probably part of daily conversations. Work.com is a great example of such a domain. To get it right, search for cheap domains with two or three words that your target group search for actively.
5. Be Aware of Relevant Regulations
Over the past few years, several countries and regulatory bodies have made laws that domainers are required to follow when going about their business buying and selling domains. For starters, avoid trademarks because they can land you into problems very easily. You should know that large companies and corporations usually make strange claims when it covers to what is covered in their trademarks. This is the reason you should learn about the industry so as to avoid being bullied in such situations.
6. Begin by Testing the Waters
This is no different than any other business that you could invest in. Therefore, it is wise to begin small by selling only a few domains so that you get an idea of the buying/selling process. Doing this will help you cultivate vital skills like negotiating and insights on the domains that sell fast or slow. You will also understand how escrow systems work and will therefore make better informed business decisions.
7. Understand what the terms “Wholesale” and “Retail” mean in Domaining
To make it easy for you, wholesale refers to the price a domainer pays to own a certain domain. On the other hand, the retail price is the price paid to the domainer by a person who wants to develop a domain (also referred to as an “enduser”). It is therefore important to look for domains that are easy to sell because if you get it wrong, it may take you months or years to get a willing enduser.Useful Post: What determines the value of a domain?
8. Stick to one Niche
Especially when starting out. Do not be a Jack of all trades. Narrow down the list of niches you are interested in. Doing this will go a long way in helping you become an expert in your chosen niches in a very short time.