I’ve been a closet domain collector for over a decade and some of my “purchases” have turned into ecommerce properties – treadmill.com.,colorit.com, survivalfood.com, and tactical.com. In this episode, my co-captain Dave Bryant joins me in this discussion that centers around domain flipping.
Today we’re going over strategies, thought processes, as well as the dos and don’ts of shopping for domains.
In this episode, we specifically cover the following:
- Mike and his impressive portfolio of domain names
- Why investing in domain names can help you become successful in ecommerce
- Appraising the value of a domain name
- Finding domain names
- A word of caution of using GoDaddy
- The negotiation process
- Domain value predictions
We hope this episode has inspired you to try your hand at purchasing domain names. If you have any questions, leave us a comment and we’ll get right back to you.
Want a physical copy of our tried-and-tested Amazon launch strategy complete with examples and screenshots? Get your free book here.
Get advice from Mike and have your business featured on the podcast. Sign up for the EcomCrew Roadshow today!
Finally, if you enjoyed listening and think this episode has been useful to you, please take a moment to leave us a review on iTunes.
If you have any questions or comments, feel free to leave them below. Happy selling!
Full Audio Transcript
Mike: The Ecomcrew podcast is better than gold. I can't possibly count how many times I've gotten something valuable from this podcast. Each nugget of information is priceless. Thanks for the review, Bob. Now on with the show.
Mike: This is Mike and welcome to Episode #287 of the Ecomcrew podcast. So glad to have you guys along today. And hello from Escondido, California! Back kind of where the Ecomcrew podcast all began, hanging out down here for a few weeks with some friends and I'll put “family” in air quotes, they're friends that we feel like our family, some coworkers both current and past and cleaning up the warehouse getting that finally ready to leave officially, even though we've kind of unofficially been out of there for a while. So hanging out down here for a bit and doing some podcasting as well. So today we have our buddy Dave Bryant, our co-captain in the house recording an episode about Domaining. And many of you may or may not know that I have kind of a closet domain fetish. I've been collecting domain names, investing in domain names for over a decade. Several of them have turned into e-commerce properties, things like treadmill.com and cuttingboard.com and IceWraps.com and these types of things. And also obviously I purchase things like ColorIt.com, I wouldn't call those as domain investments.
Mike: But they definitely have been investments nonetheless and then, more recently, things like survivalfood.com, and et cetera. So today we're going to going over a whole bunch of strategies and thought processes and what you should and should not be doing with domains. And if you have some extra cash, maybe a domain is right for you. So without further ado, let's get Dave on the show. Just real quick before we do get into today's episode, I do want to mention our Amazon Domination book. Dave and I, with the help of everyone back in the Philippines office, about a year's worth of work, finally got a book out about How to Launch Products on Amazon, The White Hat Way. There's no black hat gimmicks in the book. It's all about identifying the right products, picking them and figuring out if they're going to sell with very little investment and then ramping up an email list. And when you finally do launch, doing it in a white hat way and doing it in a way that is unfair to the competition, since you do have a list so go to Ecomcrew.com/book to get that and we'll talk to you on the other side of this break.
Mike: This is Mike.
Dave: This is Dave.
Mike: And welcome to this edition of the Ecomcrew podcast. Dave! Man, it's great to have you back on the podcast.
Dave: Yeah. Thank you. It's been a few weeks, couple months.
Mike: I think we see that every time we do this, I feel like it's the same, the same shtick. The first 15 seconds like, hey, Dave, like I haven't had you on here for a while. It's good to have you back. You know, all that good stuff.
Dave: Well, do you want to, like just pretend to do this over again?
Mike: Yeah, we could do– Hey, Dave.
Dave: Hey, Mike.
Mike: It's really [REDACTED] to have you here today.
Dave: Thank you. I've been dreading this day for a long time as well.
Dave: That was far better, I think.
Mike: Yeah, that was good. We'll let Ben edit that down a little bit so the laughing–
Dave: I thought that was–
Mike: I think we'll let–
Dave: No, I thought– I thought that was a real intro. Leave it in, Mike. I know we don't swear on this. Ben, you can edit out the swearing.
Mike: Well, we'll have to let Ben edit out the beep. We'll make Ben make that creative. But in all seriousness, I think we have a fun topic today to talk about. Something, somehow after almost 300 episodes hasn't been discussed yet. I don't know how this has happened.
Dave: I know and we have like the ultimate– I was thinking about how to call you in this podcast episode. I don't know if its a Domainer or a Domain Squatter. But we have the ultimate Domain Squatter on the podcast with us here today.
Mike: It'll be funny if Ben edits out the word domain there in that sentence.
Dave: (Laughs) I see what you did there but yeah.
Mike: I don't think of myself as a domain squatter. I think maybe other people would look at it that way. But it's certainly not the way that I go into buying domains. I have entrepreneurial disease. So every time I purchase a domain name, I have grand ideas of what I'm going to do with it one day. As I've gotten older and realized that I'm not Superman and can't do everything, I realize that most likely it's not going to actually happen. But at least I'm thinking about it from a perspective of what would I do with this thing if I could develop it, not just I'm going to hold on to it and hope to get an offer for it someday.
Dave: Alright, so let's look at this objectively. How many domains do you have right now that you have either Google AdSense or some other type of advertising just sitting on the splash page right now. That's where the domain is doing nothing but you're just collecting all that referral and affiliate income just from somebody going there by error.
Mike: Yeah, well, let's be clear that income is like pennies like that never is a way to make money even with powerful domain names. But, you know, I have a– I would say in the couple dozen range. I am not the multi-hundred domain guy that just has like a bunch of domains laying around. They get kind of expensive to hold on to. I would say the majority of the domain names that I have are worth five figures or more. So, you know, I'm not just buying hundred dollar domain names and holding onto them. I do have a couple in that category, but for the most part I'm buying some pretty, pretty serious domain properties when I'm looking to make an investment.
Dave: So for the podcast listeners, some background on Mike, because for whatever reason, Mike's not a very humble guy, but when it comes to domain names, he's very humble. And he has a very impressive portfolio of domain names. He's also very secretive about his domain names. So I can't really reveal many of them here on the podcast. But if you've ever seen some of the domain names that he has, they're very attractive, one-word domain names that a lot of people would pay six figures for. I don't know. You might even have a seven figure or two domain name in your portfolio as well. But you have some pretty impressive domain names.
Mike: If you want to offer me seven figures for any of the domain names that I have, I'll be happy to sell you any of those for that price.
Dave: Well, maybe we can do the trade for DaveBryant.com that you bought. And I'll trade you MikeJackness.com.
Mike: That was a pretty funny night.
Dave: The backstory is Mike threatened me, he says, you know what, Dave? I bought DaveBryant.com and so be careful what you say to me and always be nice to me.
Mike: It worked.
Dave: I still don't know if he's–
Mike: It worked. You were. You were really nice to me that night.
Dave: Well, I– You see now in the back of my head, too. I don't know if you're being serious or not. So every now and then, I'll fall asleep and I'll be like, “Does he really have DaveBryant.com?”
Mike: It is on private registration, so.
Dave: It is. That's the thing. It's– like somebody is squatting on that domain name with private registration. It could be you. Maybe it's your wife, Michelle, who knows. But I don't know. I guess you have that above my head at all times.
Mike: I already own MikeJackness.com, so I feel pretty safe.
Dave: Ok. Well, I guess I'm the only unsafe one here then.
Mike: Alright, so let's maybe try to pull this into a conversation around something to do with e-commerce since this is an e-commerce podcast. You know, I don't know, when I go to buy a domain name or start a new business, domains are pretty important to me. It's something that– I think because I have a SEO background and content marketing background and have run several these types of sites over the years. I realize the value in the– like the exact match, category killing type domain name and they have their place. It depends on what you're doing. A lot of times they don't make amazing brand names. So if you pull this into something like ColorIt, where I did look at domains like ColoringBook or ColoringBooks or Coloring.com and all these different things, but they're not really a great e-commerce brand name. You're not going to call your coloring books, coloring books, right? You can't trademark that. You're not going to able to call it that. But I did op for something that was really memorable, very short, easy to type in, easy to remember, easy to spell in ColorIt and got that for a really good price. I mean it was low, low four figures. I think we paid like $2500 or something for it. And while I realize it's still a fairly significant investment, I think that if you're looking to build a multimillion dollar brand name, it's worth that investment.
Dave: Yeah, I mean, I guess the big issue with e-commerce becomes, like you mentioned, it's not great for a brand name. And so, now that Amazon is dominating the world, what you want to do if you have a brand on Amazon, you want to hopefully get people searching for your brand name off of Amazon to maybe potentially buy off of Amazon, but or at least to do a little bit more research on your brand. So if you have kind of a generic one word domain name like coffeetable, if that's your brand name, it's going to be pretty hard to rank for that domain on Google. So it's almost better on Amazon to have just a very like unique word, like coffeetablematiczzz or something. Something that people can search on Google. It's instantly going to come up as the first result. So that's, I think where the argument is that it's actually better to have a bad domain name and a bad brand name on Amazon because it's easier to rank number one for that word.
Mike: Yeah, so if you're approaching something to just be an Amazon Brand, I completely agree with you. And we've never taken that approach. I mean, for me, I'm always thinking a little bit bigger than that I mean, with ColorIt from day one, the intention was to be an all inclusive brand. You know, every channel was just a channel. The intention was eventually to get into retail. We didn't keep the brand long enough to get over that hump and I also realized we just didn't have the margin to do retail because we kind of set ourselves up as a direct to consumer brand from day one. And the way that we had things priced and the margins that were there were for that and didn't include margin to do retail. But you know, ColorIt again, I wouldn't call that a bad brand name, but it also wasn't descriptive in terms of what the brand did. So, when someone was searching ColorIt on Google, relatively quickly we ranked number one for that.
Dave: Yeah, yeah and I guess in that particular case, ColorIt is– it's not that common of a word, so I guess it is a little bit easier to rank. Now I'm thinking about something like– one of the domain names that I have is OffRoading. If my brand name was Offroading, that domain name Offroading.com is still not ranking for Offroading just because it's too generic of a word and there's domain authority and all that that goes with it.
Mike: Well, it's also because you don't know how to do SEO.
Dave: Well, that's a big factor as well. But even if I did know how to do SEO, it's still a harder word to rank for. And that's I guess, the issue with e-commerce brands is: if your brand name is not unique enough and then your domain name is not unique enough, subsequently then its really hard just to have your brand name show up and people are doing off Amazon searches. Or if you are ever in brick and mortar, somebody sees your brand name and they search for it on Google. So I guess that's the argument against having actually a killer domain name for e-commerce.
Mike: Yeah, so I mean, I think that the approach that we're taking now with it is multiple pieces, right? So for me, we also own tactical.com, something I've talked about on the podcast in the past, I think that that's a great category killing type domain name. We bought it a long time ago. Never with the intention to do e-commerce with it but as we got into e-commerce, I'm like, man, that would be a really great e-commerce related type brand name. But again, you can't call your products tactical. That's just like insane. You would never. I mean, that doesn't make any sense to call a brand tactical. It's too descriptive. It doesn't– even if you called it that, people would be like they wouldn't even think of it in terms of a brand. They would just think of it in terms of a niche or something. So where I think that tactical.com has a really great place in e-commerce is to make a content site that, you know, cause tactical.com as a content site makes a lot of sense. You can capture tons of searches, get lots of traffic. We've been working on tactical.com for about a year now and it's finally starting to get some traction. We had some SEO issues unfortunately. Actually Dave, in his non SEO abilities was able to help me with the actual issue that was there and we added some of the links there to disavow and already our traffic is like 10x from last time that I talked to you about that. And so the idea is that over time, tactical.com will rank well for a lot of search terms in the tactical space and traffic is money and as its ranking better, we can then drive traffic to our own products and make products that the site ranks for and have an unfair advantage. And our tactical brand is called TACNiner. And so we've created that brand and got our trademark and did all the necessary steps to be in a position that when Tactical.com has enough traffic, it can become a critical piece of our e-commerce universe.
Dave: So I guess breaking this into two parts, first part: we're both in agreement that having a killer domain name, just if you're strictly a product brand and for the most part selling an Amazon, not really important, doesn't matter what your domain name is, for the most part.
Mike: Man, I would say that's– let me put it this way. I think that you're– it's not even the most part. It's like it's just definitive if you're just gonna be on Amazon. It really doesn't matter. But I do think in the long run you'll live to regret it right? I mean, I think that every business eventually starts to hit maximum saturation on a platform like Amazon, whatever it might be, whatever your initial thought process was, or what you thought your brand was going to be. And at some point down the road you might be like, man, I really wish I had a better brand name right now. And I could start working on SEO and set up a Shopify store. And man, I really wish that I didn't have DavesOffroadingZZZZ.com or something like that, because that's just not a great brand name for a domain in the future. But yeah, if you're confident that you're just going to be focusing on Amazon only or eBay or some other channel where the traffic is there already built in, then I think that it makes zero sense to spend a lot of money on a domain name.
Dave: Ok. So breaking that off into the second part. You're developing a content only Web site for the most part. Where is the cutoff for how much you should be spending on a domain name like that? So, for example, you could take the perspective of OK, spend a dollar on a domain name and it's a really great domain name like tactical. Probably makes sense, of course, you're paying a dollar for it. What about if it was ten million dollars? These are ten million dollars in value for having tactical.com on your boost in search engine rankings. And of course you're not going to pay $10,000,000. But what would be the value in that, do you think, in terms of the boost that you're gonna get from having an exact match domain name?
Mike: Yeah, that's a really tough question to answer because there is no Kelley Blue Book for domain names and there isn't a lot of history and other things to compare because it's so unique. Tactical.com is literally the only one of its kind that will ever exist and has ever existed. And so, the way that I value domain names is a combination of a few factors. First of all, just that the length, the shorter it is, typically the more valuable the domain name is going to be. But probably the most important thing is how often does it get searched? You know, so something like CreditCards.com is going to be worth a lot more than tactical.com because credit cards is something people are searching for an insane number of times per day. And then the other factor is what is the cost per click for like Google AdWords for that keyword? So for something like credit cards, not only does it have like absolutely insane search volume. It also has insanely high cost per click for Google AdWords. So it might be 30 or 50 or even $70 a click. I'm not sure where credit cards are up to now and then also you can look at the affiliate world, what are affiliate companies paying in that niche.
Mike: So for something again, like credit cards, it's upwards of like $300 to send a credit card referral. So all those things go into play there. And also, the final thing that I look at that a lot of people aren't looking at is what can it convert to in terms of like if someone's typing in that particular term, is it going to result in an a conversion? So, again, credit cards probably yes, very high likelihood, but someone types tactical, probably not going to convert incredibly well. And I just thought of one more thing I apologise, I'm going on here. But there's also all the long tail stuff. So credit cards incredibly fruitful with long tail stuff, you're going to have low interest credit cards and balance transfer credit cards and airline mile credit cards and all these different long tail things where tactical has significantly less long tail stuff that goes into it. So those are all the factors that kind of go into the domain name.
Dave: That was pretty concise, so you dodged my question a little bit. But for the most part, I think you gave a broad overview. So from your perspective, irrelevant of how much you could resell tactical.com for, how much you paid for it, what do you think that you're going to get as a monetary value of that traffic? Just from the domain name, saying imagining that you can never resell this ever again and you're strictly– your only way to get money from it is going to be its value as a domain name.
Mike: Yeah, I mean, I think, you know, I see tactical.com being a site that gets millions of page views a month eventually, and that's worth obviously a lot of money. And I think where tactical– You know, it's different. I was using credit cards as an example, like creditcards.com, again, worth tens of millions of dollars and would just be an absolute crazy domain name to own. Tactical.com's value, I think is more in just a clout play. So as you're doing SEO efforts and stuff and your tactical.com, you're going to just have a lot more credibility than if I had Mikestactical.com and eventually it will rank for tactical. But there's not really a huge value in just ranking for the word tactical because what the heck is someone searching for if they're typing in the word tactical. It's probably worth zero really because I mean they would have no idea what the heck they're looking for. But you know, if they type in tactical gear or tactical gloves, tactical flashlight, the longer tail stuff the has tactical in it, that stuff's going to be worth a fortune to us in the long run because those are the e-commerce products that we intend to eventually develop. And, you know, someone's searching for tactic gloves and tactical.com ranks number one for that based on an article that we've written comparing all the tactical gloves out there. And we can create a product that is in that list and send that traffic off to Amazon or to our own site. That's where the monetary value in e-commerce land comes into play for us. And then the non e-commerce type traffic will make money through things like AdThrive or something like that on the site.
Dave: So digging deeper into this question now, would you value a single word domain like tactical more highly than a very focused search phrase like tacticalgear, with the argument being that tactical, it's a great brand name, but it's going to be a little bit harder to rank for any of these longer tail keywords. But the number of potential keywords you could rank for eventually is going to be high. Whereas if you had a domain name like tacticalgear or tacticalgloves, you're probably going to rank number one for that search phrase pretty quickly, a lot quicker than you could just with tactical.com.
Mike: Yeah, I mean, so between those two, like tacticalgear and tacticalgloves for someone like me, like I would never buy tacticalgloves.com. To me, that's just absolutely worthless. You're gonna put too much, so much work into it, and you'll never be able to rank or really focus on anything but tacticalgloves. I think tacticalgear.com is a great domain name because now you have all the different types of tactical gear that I just kind of already mentioned. I don't need to repeat it all, that you could focus on and rank for. And it makes either a good e-commerce store, like I think that tacticalgear.com, actually, I know that that site exists. Ironically, the people that own tactical.com also own tacticalgear and they're the ones that had sold it to us. It's kind of a weird story.
Dave: You couldn't get both of them?
Mike: I don't know exactly what happened, but they owned tactical.com, that was their website and then they had bought tacticalgear.com and tacticalgear.com is actually turned out to be like a really, a really good store. In fact, anyone listening, you should go just look at their site. They do a great job.
Dave: I'm on there right now.
Mike: It's one of the case studies I would use on how to do e-commerce right. And the thing that's interesting, and I don't obviously know what happened behind the scenes so I'm just speculating but I think that they owned the tactical.com. They probably also own tacticalgear.com and I think they were cash strapped because when we bought tactical.com, we bought it for a really good deal. And I think that they just needed the money. And I think that the money that they raised by selling tactical.com is what initially was able to get them moving in the right direction with tacticalgear.com and they probably wish they had tactical.com again now because that would be a pretty cool domain name to run an e-commerce store as well. But, you know, just off track here a little bit. But I would definitely go check out tacticalgear.com, even sign up for their newsletter. They do a really, really, really good job.
Dave: So I think that's a good segue to where you find domain names. So how did you find, for example, tactical.com?
Mike: So I find domain names in a couple different ways. Now that I've purchased several domain names, I'm friends with a lot of domain brokers and so they'll come to me with opportunities and tactical.com, I believe was one of those opportunities. I think. It's hard to remember because it's been so long ago now and it was during a time where I was buying a lot more domain names. But definitely over the years, a lot of opportunities have come to me. Treadmill.com was definitely one of those. I remember that one much more vividly. But you know, either something like that or I'll start hunting and pecking. That's actually how I found survivalfood.com and so after we started running tactical.com and getting into this space, I started looking at ancillary brand names and things I could do in this space and survivalfood was one of those opportunities. So one of things I love doing and I would recommend everyone out there take the strategy if you have any cash available to make domain purchases. But if you're in a space, look for the exact match domain names for things in your space.
Mike: And in this case, SurvivalFood obviously is a pretty good domain name in this tactical world. And if you can find a domain like that, that's ranking in the top hundred, but not in the top 10. So somewhere between like eleven and one hundred for that domain name. So in other words it's a site that there's something there, but it's kind of like just been sitting there for a very long time. But it does actually rank that's really valuable because if it's a parked domain that's never had anything on it, it's going to take a lot longer to rank in SEO world. And so I just was manually like looking for things like this. And I found Survivalfood sitting on like page three for the term survival food. Survivalfood.com was ranking somewhere in page three. And I just did a cold outreach to the guy. I was like I'm interested in buying your domain name. And I ended up picking it up for $10,000, which I think was a pretty good deal.
Dave: Yeah. And to give some background, because I believe you've forgotten this. So Mike's process, I got a little bit of insight into, I guess, about a couple of years ago before I really found out about his little domaining fetish, we were sitting around having a few drinks and Mike starts saying, oh, what can I buy next? What can I get into next? And so he starts pecking around and he finds Survivalfood. Sends a guy an email saying, “Hey, dude, I want to buy your domain”. As well as he was doing that, which I don't think you actually remember, Mike. There's a few other domain names that you'd inquired about while you're sitting around that night. And I believe one of them was e-commerce.com. Actually, that's–
Mike: That's right. I did reach out for that ecommerce.com.
Dave: So and what happened? Long story short, ecommerce.com responded very quickly, the owner of it, and said basically somewhere along the lines of, are you effing crazy? You're offering me this amount of money for this domain name. Are you high? And never heard back from again, obviously. But survivalfood.com replied somewhat more gently and was open to some type of negotiation. And I believe you actually hopped on a plane within a couple of weeks and flew out there and basically built rapport with the guy to build that trust with him that hey, he should actually sell it to you.
Mike: Yeah, and it actually took about a year to finally convince them to. That was an unusual situation, but it did take about a year to finally convince them. And it actually turned out to be an interesting story just in the Domaining world, because we ended up selling that domain less than a year after we bought it. And this has happened to me a couple of times. But I get myself in this situation where I don't really want to sell the domain name, but someone asks me, like, how much I'm willing to sell it for. I give them a number, and then when they eventually say they'll pay it, I feel like I'm forced to do it. And that's what ended up happening with Survivalfood. So because Survivalfood already ranked on page three for an SEO like me. I mean, with very, very little work, I was able to get it to the first page. And as soon as it got on the first page, like the week that it got on the first page, I got an e-mail from a competitor. They probably would rather me not mention their name, but a competitor in the space. And they're like, we want to buy the domain name and we got on a call and talked back and forth. And I was just like, I'm not interested in selling it. And eventually they agreed to what I was willing to sell it for. And we accepted their offer. They accepted my offer, I should say, I guess.
Dave: Cool. So for people that don't have that network of domain brokers and referrals for finding domain names. What would you recommend to somebody like, for example, myself, if I'm looking to get a high value domain name, What process can I take if I don't have that network?
Mike: I mean, there's a couple different ways to find domain names. I mean, you have, you're going to find things on platforms like SEDO, SEDO.com where it's like a domain marketplace. And I mean there's probably millions of domain names on there at this point. I don't know how many, but there's tons. The other thing is just to type in the domain name, whatever it might be and when you type it in, if it's for sale, it's usually pretty obvious. And those are the ones that are usually a lot easier to open up a negotiation. If it isn't, you can go to WhoIz.DomainTools.com. It's the one that I prefer to use. There's plenty of “Who Is” sites out there. WhoIz.DomainTools.com and you can then type in the domain name and look at the information that's on the record for the domain. And at this point you're going to have one of a couple of things that are gonna happen, either they're gonna have their information public where you can find their email address and their phone number and their street address, or they're going to have privacy on it with a privacy address where you can contact them. Or they'll have privacy on it in a way that you just can't contact them at all. And that's kind of a dead end at that point.
Dave: Interesting. By the way, that's the absolute loudest truck I've ever heard in the background.
Mike: The loudest what?
Dave: Truck I've ever heard in the background.
Mike: Truck. It was actually a helicopter coming into the hospital and the– yeah.
Mike: Interesting. So here's a question for you, too. So I've bought a couple domain names and it's always through a site like buydomains.com or I forget what the other one is, like 000domains.com and at first I think, OK, I'm buying it through buydomains.com, but then it gets routed through I guess one brokerage and they're basically using buydomains.com as basically like a marketplace. They're not– buydomains is not actually the ones selling that domain or even brokering. And it seems to just be being directed to one brokerage house. So like, what's the process if somebody's selling a domain name, how do you sell it? Are you going through a Website like buydomains.com or is there kind of one brokerage that handles most of the domain sales?
Mike: And there's probably like 5 to 10 pretty prominent domain brokerage sites. And so–
Dave: What are some examples of those brokerages?
Mike: I mean buydomains is definitely one of them. They're a really big one, SEDO's one that I just mentioned. You're putting me on the spot. It's like always hard to think of these things off the top of your head. But typically, like I said, when you type in the domain name, whatever sites representing it is got like the for sale information there so you'll click on it and then they'll take you over to buydomains and then you can make an offer. And it's always a negotiation process and then for me, I always try first to reach out to the domain owner directly first if I can. Again, a lot of times they have privacy on and they just kind of shoot themselves in the foot by having a middleman in between it. But a lot of these guys have thousands and thousands of domain names and they're also– a lot of them are multimillionaires and they want nothing to do with it anymore. There's definitely several domain owners that are in that category. And so they have someone in between just running interference for them. but if you can. I always try to go reach out to the domain owner directly because the brokerage company is going to take probably around 20%. So usually you can negotiate a better price by working with the owner directly.
Dave: Interesting. And I think that one that most people notice is through GoDaddy now. GoDaddy – whenever you look for a domain, they'll say and if it's high value domain. They'll say, Oh, its maybe for sale and then they'll give like a ballpark figure of what their estimate is. But then through GoDaddy you can make an offer on that domain name. And I guess what GoDaddy is doing is they're being a middleman to the middleman and eventually getting to the domain owner.
Mike: Just a couple different ways through GoDaddy. One of them is like, we'll contact the domain owner for you and help negotiate. That's like the biggest rip off maybe in the history of the world. It should be illegal what they're doing there. It's so ridiculous because they're doing nothing but reaching out through the Who Is information on your behalf like literally. That's all they do. So you're paying, I think it's either 100 or 200 dollars for them to send an email that you could just do on your own. Literally no additional effort goes into it. Now they do also have a domain brokerage side of the house where they are actually selling the domain names and that's premium domain names as they call it. And that's a different story. But never reach out to GoDaddy or one of these other domain companies and have them find the domain or research the domain name on your behalf. I don't know if there's a bigger waste of money. You'd be better off throwing it into a fireplace. At least you get some entertainment watching it burn.
Dave: Ok. So assuming that you've found your great domain name, you didn't go through, GoDaddy. What's your process for negotiation? So they're asking, let's say, tactical.com, we're asking a hundred thousand dollars. What's going to be your negotiation starting point? Are you gonna offer 10%? 25%? 50%? What are you going to offer as your initial offer?
Mike: You know, it's funny that you said that because that's literally exactly what tactical wanted to start with. I know we didn't talk about this before him, but that's just kind of funny that you mentioned that. It really obviously is going to depend on how outrageous their initial offer is. So I don't think that it's just a matter of whatever they say, I'm going to offer half or I'm gonna offer a quarter. I'm looking at buying domain names. I've never paid what I would consider to be retail for a domain name unless it's something that's like in the hundreds of dollar range where it's just like, whatever I'll pay you, I'll pay you $500 for your stupid domain name, whatever. But if it's a five figure domain name, I want to buy on the wholesale like the deep discount, wholesale, fire sale price, which is what we got tactical.com for. We paid 25k for it and you know, to me that's a price where if I had to sell it really, really quickly we could at least get our money back out of it. And the reality is, is that it's really hard to sell domain names. So it's exciting buying domain names and people get wrapped up in buying all kinds of things and its really exciting at that moment. And that's when people that are selling get to take advantage in a good way. But because I've been around the block quite a few times, I'm just– I'm trying to buy things at a discounted price. So it's just again, I know you, the next question is what is that number? It's really hard to just pick an exact number, exact criteria. I would recommend looking at something like DNJournal.com. It's a site that publishes all of the top sales for the year. And you can see what other domain names are going for.
Dave: Would you not agree, though, that normally if you go to a site like buydomains.com, typically they're being marked up at a very minimum of double what the owner actually expects to get. And normally it's closer to more like three to four times what they actually get. So if they have a $10,000 domain name that they want to get $10,000 for, they're going to have that broker list it at either 30 or 40 grand.
Mike: I've honestly never seen a markup that high. Usually it's no more than double. I mean, if you see a domain on buydomains.com at $10k, it's going to be unusual to get it for under $5k let's say. I would say that that would be outside the normal ratio, the normal spectrum 'cause I've definitely bought domains from buydomains.com. I could probably even search for the ones that I've purchased through there, but I know I've never gotten anywhere near that big of a discount off of the published price.
Dave: Interesting. Yeah, I know the one domain offroading.com that I bought, it was I believe $30,000 and we ended up getting it for $13,000.
Mike: So you got it for about a third of what they were asking.
Dave: Yeah. Obviously that just means that I'm a better negotiator than you, but.
Dave: It does seem, though, at a minimum, they're marked up two times. Again, you have much more experience than me, but would you not agree? It's kind of foolhardy if you go in there offering at a 20% or 30% discount of the–
Mike: Oh, yeah. Absolutely.
Mike: I mean, you obviously want to start as low as you possibly can and just see what they come back with. And I'll tell you one thing that is a really big toll in terms of domain name and negotiation is time. So if you go to them and say, I'll offer you $10K for this domain name and they're like, no, I want $20K. And you're like, okay, well, how about $17,000? You know, you just– like, if you're really quick to jump, you're really hurting yourself. Just go back to them and say, look, ten thousand is as much as I'm willing to pay. You know, that's it. But let me know if you change your mind. A lot of times, weeks or even sometimes months later, they'll come back to you and get closer to your price or even accept your price. That's exactly how I bought minimalism.com this year. I mean, it was over a year of negotiation. It was a name that I had been looking at for quite a while. I don't have any burning desire to buy it. I don't really need it, which is kind of funny when you're talking about minimalism. But it is something that I intend to develop someday because I have really become a minimalist and I was able to to get it for what I think is a fair price. And it was at a fraction of what they had originally had it listed for and what they wanted for it.
Dave: Yeah. So you're advantaged to the buyer if they can play long game and drag it out months or even potentially a year or two. But if you go in there hot, or wanted to get that domain purchased within a week or two. You're probably going to overpay.
Dave: Fair statement?
Mike: I think that's really, really fair statement.
Dave: Cool. So I think we're at like 40 minutes after all the insults that you threw me in the beginning of the podcast. To wrap things up, I'd like to hear your kind of predictions for domain values 5 or 10 years from now. Do you think dot coms are still going to increase in value?
Mike: Yeah, I do.
Dave: You do, eh?
Mike: And so just real quick, as you were talking there real fast, I looked up minimalism.com and found the history on this just as a reference point. And so this was through UNA (sp?) Registry, which is another one of the domain brokers that are out there. And the initial response that they gave me was that they wanted a $144,000 for the domain name. And I ended up buying it for $25,000. So this was, what, one sixth of what they originally were asking. So there's an example of an extreme example of you can definitely get it significantly cheaper. You know, it just– it really depends on the owner. Like the broker's running interference back and forth between the owner. And it depends if the owner needs the money or whatever the situation is. But I ended up picking it up for twenty five thousand. I think that that was a good long term investment and it's something that I may or may not develop some day.
Dave: Did you get that through a broker or through privately, through the owner?
Mike: It was through the broker because the domain was privately registered and I couldn't reach out to the domainer directly.
Dave: Interesting. OK. So your forecast. Let's take a longer picture because if we say five years, well, of course, yeah. Dot coms probably aren't going away in five years. But do you think dot coms are still going to be valuable? Let's make it 10 or 20 years from now. Or do you think something else is going to come along like some new jazzy domain name or maybe even 10 years from now people aren't using domain names, they're using something else. They're using, I don't know, finger recognition to go to whatever Web site it is that they're going to. Maybe the Internet's dead by then.
Mike: Yeah, I don't know about that. The domains have been around for 30 years or whatever it's been now. I mean, obviously a little bit longer when you look at some of the really early stuff. But 25, 30 years is kind of like when registering domain names started kind of really happening. And I don't really see that going away anytime soon. I think that it's hard to predict the future. So at some point if and when domain names are no longer relevant. I guess when is really the reality, right? It's not like in the year 3000 we're gonna be using domain names, so who knows when things change. But as far as I can see out in the future in the world that I know and understand, domain names are going to be around for the foreseeable future. And what has happened, obviously, first .nets, .orgs, .govs, all these different things start coming out. Now there's hundreds of extensions and the .com is I think that's actually made the .coms even more valuable and .coms because they've been around the longest and because people in their head always go to .com. So if you say go to tactical.com, it's really, really easy. You say go to tactical.info or tactical.biz or any of these other types of things. You have to like continue to say it over and over again and repeat yourself and remind people that it's a dot net, it's a dot info. The dot com's like almost always understood.
And 800 numbers are a similar thing, right. it's like 1-800 blah blah blah. If it's 888 or 877 or any these other crazy extensions, it's something that you kind of continuously repeat, even though they've been around for a very long time. So from my perspective, the premium .com names are going to continue to appreciate in value as quick as they ever have and will continue to outpace all the other extensions in terms of the percentage and the speed that they'll continue to appreciate. I do think that the spammy SEO .coms have lost a lot of value. If you have tactical-gear.com, probably not really worth a whole lot anymore, but tacticalgear.com or tactical.com, definitely something that's continue to appreciate in value because again, it's the only one of its kind. It will always be the only one of its kind. It's like having a city block in New York at Fifth Avenue and 50th Street. It's always going to be worth a ton of value until sea level rises and it's underwater, which I think it'd be kind of like the equivalent of domains kind of going away and not being, you know. So until something crazy happens, those domain names are always gonna be worth a lot of money.
Dave: Alright, let's wrap it up, Mike, with this one word prediction. 10 years from now, what's worth more? What's appreciated, more? Dot com domain names or bitcoin?
Mike: I knew you were going to go to Bitcoin.
Dave: Of course.
Mike: I'm going to go with Bitcoin.
Dave: So the listeners can go put all of their money in Bitcoin. Do not put them in dot coms, put them in bitcoin. Conclusive proof right here on the Ecomcrew podcast.
Mike: I think there's a world where Bitcoin is worth 10x to 100x of what it's worth now in 10 years and domains probably aren't going to appreciate quite that quickly.
Dave: Alright. Well, with that, shall we wrap it up?
Mike: Let's do it.
Dave: OK. Well, thank you for listening, guys, to Mike's insults of me. But also, hopefully you got a bit of domaining knowledge out of this too.
Mike: If you want more insults, stay tuned til next week.
Dave: Am I on next week or is it?
Mike: Oh, no, I'll just bash you without you being on the podcast. I have no shame.
Dave: See, that's what happens if I stop listening for a couple of months. Don't even get to hear what you're saying about me.
Mike: This is actually how I know if you're listening or not, because I like drop little Dave Bryant insults, and if you say like, why do you say that? Then I know you're listening. If you don't ever say anything then I realize you didn't listen to that episode.
Dave: See, you stole a page out of my book because when I'm writing a blog article, I always put like one little typo on there to see if the proofreaders actually proofreading and catching what they should be. So I guess we're learning off each other.
Mike: I don't read any of the blog articles that you write, but I do look at a AHREFs and I see them continuing to rank higher and higher, getting more and more traffic. So that's the part that I love.
Dave: Hey, I'm glad I can contribute in some way.
Mike: Alright, my friend. I appreciate it. Thanks for coming on. And hopefully we'll talk soon.
Dave: Alright. Talk to you guys later.
Mike: Alright, guys, that's going to wrap it up for the 287th edition of the Ecomcrew podcast. Don't forget to go over to i-Tunes and leave us a review if you haven't already. Those really do matter. It really helps out the show. We continue to rank higher and higher within iTunes and it's because of your reviews that allow us to do that. And you continuing to download and listen to the podcast. We want to thank you for all your support. As always, you can go to Ecomcrew.com/287 to get to the show notes and comments for this episode. We'd love to hear from you and until the next episode, happy selling. And we'll talk to you soon.