Buying Domains? 5 Red Flags You Should Avoid What the domain is telling you to avoid? There are several things that are a deal breaker for a domain investor. If you see a domain that has any of the following…just walk away…no matter how cheap it is, or how much money you think you might make on it…that’s because these red flags mean that the domain is going to be a dead weight and you won’t be able to sell it fast. #1 - Are there any misspellings or additional characters or numbers in the domain name? (this also includes the idn domains, with foreign letters that might look like English letters) ex: www. refinance1 .com or www. refinaance .com You might think they are worth something, i.e. for a TV ad…but the person might as well just register refinance2 .com and get the same result without spending any real money to get the domain name. The keyword###.com domain names that you see in different TV ads…are just used for split testing the different ads…it doesn’t matter to them what domain they get, since they are just using those to test to see which ad is more effective in getting sales and driving customers to their door. #2 - Are there any underscores or dashes? Ex: www. credit-cards. com or ww. credit_cards .com These might look like great names… but they don’t get the exact match bonus, so you won’t be able to sell these at a premium. #3 - Is it a third level domain? (i.e. .info or .cc) – these are the domains that are completely worthless to you. #4 - Is it a trademarked domain? i.e. www. AppleiPad .com - trademarks are DEATH… remember that… no one will ever actually pay money for them since the domain name can be taken away at any time…and it opens you up to a potential lawsuit. You can risk buying one for an affiliate site of your own (or an adsense site)…but I’d advise you against doing that….there is just too much risk for at most a few extra bucks per month. And if you do end up making more $$$ than that…you’ll just show up on the company lawyer’s radar much sooner. #5 - When you do a quick buyer search, do you find yourself finding very few potential buyers to buy the domain? So after you ask these questions, what kind of dollar amount can you place on the domain? Well, that’s the hard part of domain investing. Domains are worth as much (or as little) as the potential buyers will be willing to spend to buy them. Even a $200,000 domain can be worthless if you can’t actually find someone to pay a $1 for it. So we have to look at the list of potential buyers for each domain to figure out what the potential value is going to be. If your look at potential buyers results mostly in a bunch of small businesses with the annual profit of under $100K/yr, then you’ll have a hard time getting more than $3,000-$5,000 for it. If on the other hand your search nets a bunch of big companies with millions (if not billions) in yearly revenue, then they can afford to pay quite a bit more to acquire your domain. I will write more on finding buyers later. Hope this helps. PS: post a comment below
Regarding point #2: If credit-cards.com is available, you're not going to jump on it b/c it has a hyphen? I also don't agree with your suggestion that you're sitting pretty for the keyword bonus just because you have the exact match w/o a hyphen. It's a random guess whether a .com / .net / .org, or any variation of the keyword with hyphens, numbers, stop words etc. will rank for the exact match keyword term. And I've never seen a domain with an underscore symbol in it. #4: Generally I agree, but $XX,XXX sales for trademarked domains have happened on Flippa. As long as you have permission from the trademark holder, then you're good. #5: The simplest way to tell if a dropping domain (for example) will be in high demand is whether or not the other TLDs are already registered.
Nice list, I have sold quite a few domains and what I end up doing is finding a forum related to that domain name and become an active member for a little while and place it for sale in the sig link if the forum allows for it, or in the BST section of said forum. I have always done well doing this.