I wanted to share a simple domaining strategy. This is a strategy that I saw work well for several people who purchased expired domains during my tenure at GoDaddy.

GoDaddy offers the ability to list domains within any GoDaddy account as Premium. Premium domains are offered during the purchase path based on the domain name search.

In the event of a direct match the domain will show the following:

Having a person doing a search for a domain you have listed is by far the best scenario you could hope for. Premium Domains are also available through several other areas on the GoDaddy site as “Related Domains” as well as on the WHOIS search.

Potential Premium Domain Customers:

1. The original domain owner. It may seem unreasonable that someone would ignore (their email may have changes as well) the 7 notices GoDaddy sends before a domain expires. Furthermore, then allow 42 days to go by before addressing the fact that their website is no longer active, but it happens more often then you would think. Many of these previously active domains are bought buy large domain buyers whom typically just list the domains for sale after acquiring the name. One mistake they make if they are GoDaddy expired domains is listing them for sale at Sedo or a similar domain auction service. Had they listed it with GoDaddy Premium Domain service they may have sold it. The reason for this is that the domain owner is inclined to call GoDaddy to find out why their site is down and more then likely get the GoDaddy Billing Department. They then are advised that the domain is now owned by another registrant. If the domain was listed as a Premium Domain the billing rep would more then likely offer the domain at the listed price in order to secure a commission. What better scenario could you ask for then a motivated buyer and a motivated sales rep whom is able to sell your domain? I know this as I once was a billing rep for GoDaddy

2. A current or new end-user business. People are starting to realize the marketing power that a good premium domain has, so they’re buying them. Businesses are budgeting thousands of dollars to secure their web identity and GoDaddy is a widely recognized and used company by the end user. End User’s are typically hesitant to contact a domain owner directly or utilize auctions houses, such as SnapNames or Bido.com. They like the “security” they feel by using a well known company, so the ability to buy a domain for a fixed price and have it transferred directly to their account is value added.

3. Another domain investor. It seems unlikely as GoDaddy Premium Domains are typically priced, IMO, on the high side. That said it’s not very uncommon for a domain investor to pick up a domain through Premium Domains.

So what the cost? GoDaddy’s Premium Domain fee is high relative to the industry standard at 32%; however, there are no listing fees, so you have no risk if the domain doesn’t sell. Also, it’s a great way to get exposure on your unused domain inventory. If you bought a domain for $10 and sold it for $500, you’d net $330. That’s a 3300% ROI, which is not bad

This strategy will certainly not work for everyone, but if you have the appropriate budget and a good monetization plan it should be considered. If you have any questions please feel free to contact me at lee (at) dotinvesting.com or give me a calla at (480) 463-4533.

I created this list as more of an example. I’m a big fan of geo keyword domains as that is where local search is headed. Think about it, when you search for something local you typically will type in what your looking for and the location. For example if you were looking for wedding portraits in Phoenix you’d probably type in “phoenix wedding portraits” or “wedding portraits phoenix.” As a result, owning phoenixweddingportraits.com would be a great domain.

Additionally, if you were interested in focusing on domain reselling as apart of your strategy then buying local domains would also make a lot of sense. You probably have more connections locally then you do nationally, so finding an end user would be a whole lot easier. You might even have a store or company down the street that you could pitch it to. I would recommend setting up expired domain monitoring of your city, surrounding cities, and state.

Today’s list of domains are all fire-sale auctions and for only $13 total discountchicagorealestate.com and even kachinarealestate.com are great deals.

Insurance domains have been selling extremely well recently. Many of these domains can be picked up for $10 (+ the renewal fee of course). If they aren’t successful at that price they’ll be hitting the $5 auctions where you can grab them for even cheaper. I used the Dot Investing Expired Domain search tool to create this list.

Here is a list of all the domains that have over 1000 traffic according to GoDaddy. The traffic information is reported by GoDaddy and cannot be assumed to be 100% accurate.

So I thought it would be important to touch on why I feel that expired domains provide some of the best value in the domain name aftermarket.  I feel this way primarily due to my experience as an Executive Accounts manager at GoDaddy. Our department helped the top 7k domain holders in the world and the reality is that by and large the highest percentage of successful portfolios were built buying expired domains.

There are primarily 4 ways to acquire domains in the aftermarket: Member-to-Member Domain Auctions, Direct Domain Sales, Private Domain Sales, and Expired Domains.

Member-to-Member Auctions
These can be found at almost all the auction houses: GoDaddy, Snapnames, Afternic, etc… While it is possible to find a good deal, for the most part people have unrealistic expectations on what their domains are worth. Here’s a worthy example, right now you can buy mmyyyspace.com for $20k. This is the extreme end of it, but for the most part that’s what you will experience unless you’re dealing with an educated seller.

Direct Domain Sales
These can be some of the best deals and I have personally gotten some of my best domains this way. I believe the biggest challenge people have is the awkwardness of calling or emailing someone out of the blue to purchase their name. There are some pitfalls. Similar to the m2m auctions, the domain owners will typically ask for outrageous prices or just refuse to entertain a sale. It pays to be shmoozer when trying to do this. The other issue is that it’s time intensive with a small close rate.

Private Domain Sales
This is primarily utilized in high value domain sales and performed by companies such as sedo.com and ricklatona.com. Certainly not the place for a newbie domainer to buy domains, but interesting to track as you can pick up trends in the market by watching the domains that are sold. If SEDO sells Server.com, then it might be worthwhile to pick up a few domains containing the word ‘Server.’ Just like in finance you can use the past to help indicate the future aka leading indicator.

Expired Domains
Unfortunately the companies that sell expired domains, GoDaddy, NameJet, SnapNames, and a few others, don’t report their total sales volume, but I would have to assume this is the largest sector in the aftermarket by volume. That said it also provides the most value.

There is one important distinction I must make, which is that there are 2 ways to capture expired domains.

Drop Catching – These domains have gone through the 45 day allotted auto-renew period (if the registrar utilizes it) and the registry redemption period. This typically lasts about 75 days. The domain will go to a pending delete status and then be added back to the registry as an available domain. There are many services that allow you to capture these domains through backorders. The downside to these types of domains is that the creation date is reset. Additionally, search engines will remove all past data held for the domain. Any indexed pages, PR, etc… will be dropped. In my opinion this drops the value of the domain.

Pre-release Domains - These domains are being auction off by the registrar. Since the individual did not renew the domain the registrar has the right to auction the domain off to the highest bidder during the 45 day auto-renew period. In this instance the creation date is kept the same and it is possible to maintain the PR and typically some of the indexed pages.

I highly prefer pre-realease domains over dropped domains. The valuable development prospect is what draws me to this conclusion. Granted there are different techniques in handling maintaining the PR and indexed pages and plan to address this later.

The other reasons why expired domains are so valuable is…

- your not dealing with the emotions of a domain seller that may skew the domain’s value.

-there available everyday in the thousands.

-someone else potentially built value into the domain by maintaining a site on it.

-the creation date stays the same giving the domain age. Age is one thing you cannot create on the fly. Age is age and it requires something to have existed over time. This is regarded as important especially by you SEO nuts

-not utilized by the masses. Expired domains are typically overlooked by most and is utilized primarily by individuals within the domain industry. Granted some highline domains are going to go for outrageous money, there are still thousands of deals you can grab for as cheap as $13. GoDaddy has a fire sale section with $5 domains (you have to pay the domains renewal fee, so it ends up being around $13)

Obviously I wouldn’t overlook other opportunities in other domain channels, but to me expired domains can be used on day-to-day basis to build quite an amazing portfolio.

The list goes on and on and I will spend more time outlining many items discussed in this article in the future. As always if you have any questions or comments feel free to email me at lee@dotinvesting.com