May 232022

Is Domain Investing Stil a Wise Move in 2022?

You may have heard how the domain name and website Business.com was famously bought for $150,000 ... then sold for $7.5 million ... and later sold again for $350 million. Or how the domain name Beer.com went for $7 million, or even Toys.com's $5.1 million price tag.

Sure, you say, but those sales were all in the dinosaur days of the internet. Back before all of the obvious words got taken and made into highly marketable domain names. But all of those opportunities are taken, and no one is making that kind of money anymore. Right?

And Then Along Came the Voice.com Sale for $30,000,000

Know when that happened? The Voice.com deal went down in 2019. Just before that came Ice.com and Tesla.com in 2018.

But figures like those above can be a bit misleading. Sure, you might think a few tech-savvy marketing geniuses won rare jackpots, or a few knuckleheads got lucky and pocketed a few million dollars.

It might make you think that domain investing is like buying lottery tickets. The odds are wildly against you, but someone wins big at least once a week. But that’s not how domain investing works.

You Don’t Have to Make a Killing to Make a Profit

Sure, some earn millions on a single domain name sale, but others make much smaller profits on multiple deals.

You don’t have to hit one out of the park like the previous owners of Business.com, Voice.com, or Ice.com. Keep in mind that you can register and host a domain name for a few dollars a year. Once you have it, your costs for maintaining your digital property are minimal to nothing.

If you buy a domain name for $200 and sell it a year later for $500, you’ve made a pretty sweet profit on a percentage basis. Your $300 earning certainly won’t win you a place on this list, but if you regularly make comparable deals, your domain name investment business might be an enjoyable side gig.

Here are a few tips for making the best of your domain name investing activity in 2022.

Keep It Simple

Whether you’re creating a domain name of your own or looking to buy one, you’ll want to find names that are short and descriptive. One rule of thumb is that a domain name (the part before the .com or other extension) should be somewhere between about six and 14 characters.

Try to avoid the use of hyphens or words that are frequently mistaken or misspelled and numbers used as words. Your domain name can combine words, but make sure those words send the relevant marketing message. For instance, if you owned HomesForSale.com, you might find very interested buyers among realtors or developers.

WhyWait2LoseWeight.com, on the other hand, is probably too long, complex, and confusing to attract much buyer attention.

‘Stage’ Your Domains

When Business.com went for nine figures, it was an actual functioning website, not just an empty domain name. In fact, the site was generating $15 million a year in revenue. You don’t need to get anywhere near this kind of production from the domains you want to sell, but it is beneficial if your prospective buyers can at least get some idea of the potential.

Real estate agents understand this concept. That’s why they stage an empty home or apartment. They paint the walls, bring in furniture, art, and rugs, and often use interior decorators to assemble the look.

The idea is that homebuyers or renters get more excited about a staged home, even if it’s not exactly the way they’d decorate it themselves. They see where a couch could go or the advantages of buying a colorful tapestry. They see how much wall space there is for their own art and that a mirror can make a smaller space look larger.

You can do the same with your own websites. Stage the site with some basic writing, design, and navigation that fits how you think the site will best be used. If you have to make a small investment in a creative team, your investment will pay off with a larger sale than you’d otherwise have.

Take Advantage of Multiple Extensions

Back in the day, you didn’t have much choice in the way of domain extensions. You basically had .com, .net, biz, and maybe a couple more. Today, there are more than 1,500 top-level domains (TLD), the formal name for domain extensions. Some are reserved for countries, corporations, or are otherwise restricted, but it still leaves hundreds for domain name creators.

Of course, most people think of .com when it comes to TLDs, so domain names with any other extension aren’t always as marketable. But it’s an option.

Use a Domain Appraisal Site

Thinking of making an offer on a domain name you think has marketing potential or marketing one of your own? Start by running the name past a credible domain appraisal service. Such sites as Estibot, Flippa, and Sedo Review can provide very rough ballpark figures for the value of a domain name. Each tool is different, but they base estimates on such factors as the domain name length, and how often the term is searched on Google. Most of these services are free or low-cost.

This tool provides at least a starting point for negotiations with a seller or for figuring out the advisability of registering a name you have in mind.

Collaborate With a Savvy Partner

At Namenative.com, our specialty is in helping clients buy and sell domains. From appraisal services to finding and contacting domain name owners or customers on your behalf to negotiating deals, we help domain name investors like you make your best deal possible.

Reach us at Namenative.com. Drop us a line here or send an email to [email protected] You’ll find us to be knowledgeable, responsive, and a great partner to work with.