Erik’s Blog: Board Shorts and Business Suits

Back in May of this year I talked about wanting to take the plunge into domain name investing and the world of domaining. I finally did and for the last six months I’ve been tracking how I’ve been buying, and recently selling domain names. I’ve done decent at it, making a 65% return on investment, and thought I would write about my foray into domaining in a 5 part series titled Domaining for Beginners.

Part I - How to Make Money Buying and Selling Domain Names?
Part II - My 65% ROI in 6 Months Buying and Selling Domain Names
Part III - How to Get Started Buying and Selling Domain Names for Profit
Part IV - A Simple Method to Get a 130% APY Investing in Domain Names
Part V - What is the Future of Buying and Selling Domain Names for Profit

I wrote about domaining earlier but feel like this part was warranted because I’ve learned so much more since then. However I must warn you, there are a lot more people making a lot more money, buying, selling and parking domain names. I’m just here to give you a primer on what I’ve done and how it’s worked. Take what you will and use it or toss it. I don’t claim to be an expert, I just feel like sharing my small success.

Domaining in the sense of strict investing in domain names and squatting on them is simple. You buy a domain name that receives traffic, type-in or referral, and you park the name with a site that provides the layout, the advertising and the tracking of all this action. I’m going to stick with this simplest form of domaining because it involves the least amount of work. Also I’m going to use the word domaining rather than squatting because there are a lot of negative connotations that go along with domain squatting and I’m not trying to perpetuate negativity with this business.

Type-Ins and Typos 

The first type of names you can get are type-ins. They can be broken down into two basic categories. One is someone typing in the wrong spelling of a domain name, or Typo, and the second is a real dictionary word or phrase that is better known as the real Type-in.

Typos 

The typos are the ones that most people (non-investors) despise because they are trying to get to a page they know exists, like a newspaper, or a famous blog, and someone has registered a common typo error and has parked that name with a service which we’ll get to later. There are also some investors who dislike certain typos, but really where do you draw the line?

Typos are some of the riskiest domain investments and proper research and guesstimation is essential to limiting you risk. Prices are usually strictly based on earnings for several reasons. First typos are difficult to predict because one day a website can be all the rage and the next day it can tank, or vis versa.  Two, there are sometimes is trademark issues with typos which from my limited experience and searching of the forums, no one is too certain about. But you must always be weary of the Cease and Desist Letter (C&D).

Also, there are people who park names that have nothing to do with adult content using adult content words, thus display adult content advertisements, which in my opinion is wrong. Most parking services will quickly remove your account from this so a lot of people don’t practice this. However, that’s not to say that people aren’t redirecting their names to adult sites. I don’t recommend this practice and it’s just not an honest way to make a buck.

Type-Ins

The other type of Type-in is the real type-in. Names that are naturally typed in that contain real “dictionary” words or word phrases. Things like Candy, Songs, kitchensupplies, and a lot more. These are the names that are worth a lot more than their earnings because you can always get someone who wants to come along and buy a catchy 2 word phrase that is will to pay you way more than what you are earning on the name.

Natural Type-in, real spelling names, are also much better for search engine rankings. Most search engines will rank names containing the same and real spellings of searchers keywords higher than random or misspelled domains with similar keywords. Although your content can be strong enough to pull in many searches (just look at ebaumsworld) you’ll have an easier time with real words relating to your site topic. 

These are the names that most domainers strive to get to because they are the safest investments, especially if they are getting natural type-in traffic. You can earn money while you wait for someone to want to start a site based on your parked name.

Referral

The next type of domains are those domains that have a lot of referrals to them either through searches or backlinks. Since backlinks usually aides in searches I won’t break this grouping down but I will say that there are a lot of type-in names that have never been developed with content that are still number one in Google search results.

The others are sites that have been developed before and are now parked. They used to have great backlinks, still possibly have indexed pages and page rank and are for sale as undeveloped sites. These are names that you must be careful with because a lot of links to these pages may disappear.

Webmasters clean up their links all the time and if they link through and see a site is now parked they’ll loose the link in second, guaranteed. With that lost link you may loose a lot of your traffic. These should only be bought at the right price.

Now you may think, well I can just list my parked names in forums, on websites and build links that way. Wrongo, if you read the Terms and Conditions to most parking sites you’ll read that you can only have natural type-in or search traffic. No referral that wasn’t natural prior to ownership is usually standard. Now you can’t help it if the name had links previously and starts out with a lot of traffic. But if you build traffic the wrong way, parking sites will get you!

Domaining Isn’t a Bad Word

I want finish up Part I by saying domaining isn’t a bad word. Think of it as owning a piece of real estate in cyberland. My thoughts are that parking a site is providing the user, who might type-in naturally or via the typo, with ads that provide them with sites that may or may not be of service. Most of the parking sites get their ads through Google and these are the same ads that people have plastered all over their websites in optimal places for you to exit their pages from.

The reason most people frown upon it is because it’s a really easy way to make money and they’re just mad they don’t have patience or technical know-how to get into it. But as I’ll show you in the next part, I don’t spend a lot of time looking for and buying domain names and I was able to make 130% APY in 6 months!