Erik’s Blog: Board Shorts and Business Suits

The transformation of my blog into a more entrepreneur based resource blog is taking place. As you can see from the title of both this post and now the title of my blog I’ve decided to go with a more “surfer-dude” approach and I’m calling the blog, “Board Shorts and Business Suits.” Cause who doesn’t want to show up to a board meeting wearing a business suit on top and board shorts on the bottom.

I live in Waikiki on the island of Oahu. I’m facing the fact that I love to work on building businesses and business ideas. And I want to combine the two and eventually conduct board meetings wearing business shorts on a beach front estate. (Wouldn’t that be nice)

I’m working on fully embracing my entrepreneur side and seeing that I love to and have always loved to start businesses. I’m only now learning how to follow through on that passion and build them into true businesses that can sustain themselves on their own. Without me always there to do everything. I want to build business systems rather than a myself “being” the business.

The process of changing my blog will be ongoing as I’m working on cleaning up the look and making it more friendly to the social bookmarking and search engine scene but it shouldn’t ever see large down-times.

I hope you all enjoy the new entrepreneurial feel around here as well as the constant spattering of random articles that I’ll no doubt continue to write and hopefully inspire you all to try something random and new. (Don’t worry I’m not going to get away completely from random thoughts and goals. Just more focus on the entrepreneur side of things.)

You can read Part 1 in Buying and Selling Domain Names for Profit or continue on. 

I’m not going to divulge my actual investment dollar amounts right now, I may in the future, but for now I’d like to keep them secret. I can say that it’s not small potatoes so these numbers aren’t skewed by one large return. I’m going to use percentages because it’ll keep my investments secret for the time being. There is a way to figure out the initial investment but I’ll leave that to the people who really want to know (although one large number has been left out.)

I started back in the late part of June and the numbers go through to this month. I bought a few domains each month and tried to reinvest my earnings each month to increase the monthly return and build my domain portfolio. Here are the month to month ROI’s adjusted each month for domains and reinvested earnings. I took the total invested up to the end of that month and divided by the earnings that month.

You’ll see right away that last month my earnings jumped considerably. The only reason for that is because I sold a domain name in which I made a sizable profit. If I weren’t to have sold that name my earnings would have been about 8% again and I would have had a total return of 38% with a yearly return of 76%.

Still a very respectable return. Feel free to use either chart for your personal decision, either way, both returns beat many other investments out there.

 Also of note. I recently evaluated my domain portfolio by asking for an appraisal in one of the domain forums and was offered the same amount as my total investment which, if I sold the portfolio then, would have mad my return 138% or an estimated 176% on the year.

The spread of earnings on each of my domain names ranges from a 1% to a high of 80%. These are just monthly returns and do not include sales of domain names. It’s like the earnings a company makes off investing on a piece of land or equipment.

From these numbers you can see that I was able to earn a steady return of 6.3% per month (equating to 76% per year). So on a simple $1000 investment I would make $760. I can live with that, so can most other investors willing to accept a little risk (which I delve into in Part IV). You must also remember that this is an investment that you do no more work other than searching, buying and letting sit.

If on the other hand I were to take the total return on my investment including sales. I would be averaging 10.8% per month or 130% per year. So on a $1000 investment I would make $1300. More than my initial invest. So even if I couldn’t give the domains away at the end of the year I would still make money. Actually I would still make a 30% ROI, still an amazing return when compared to the stock market.

In the next part I will be discussing the basics of what I look for and how I go about buying and selling domains. That’s right I’ll be revealing some of my “secrets” to my domaining world.

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!

I’ve been a little sick for the past few days with the flu. Which means two things (aside from the gory details) a lot of sleep and a lot of TV. With the second one, TV, I’ve also been watching a lot of commercials and one in particular has gotten my attention. A commercial for a product called BahamaVention.

The commercial appears half-way real with it’s cheesy 90’s infomercial appeal. A few goofy characters going from depressed states to super happy all with the use of a product called Bahama Vention. It doesn’t really tell you what the product does or what exactly it is, just that if you’re depressed, overworked, or under tanned, you’ll be helped with BahamaVention. You can call or visit BahamaVention.com for more information.

By the third time I was ready to find out if this was for real and what it was all about. So I went to Bahamavention.com and began reading through the “abouts” and the testimonials to see if I could get any sense of what the heck this was. What is a bahama vention?

Proven, safe, effective, and hypoallergenic, a Bahamavention is the single-most important “instrument of love” you can use to get an overworked, overstressed, and undertan loved one the treatment he or she so desperately, desperately needs.

That clears it up doesn’t it?  

Well after viewing a few pages I began to notice at the top of the page that you can call the BahamaVention hotline at 1-800-BAHAMA or you can click on a link to get a free kit. The link takes you to bahamas.com. Ah, now it makes sense. What a tricky and interesting marketing scheme that was so obvious now that I know what it is promoting.

I thought I would mention this as an alternative to the classic in your face marketing approach, or gimmicky marketing approach. Like offering a coconut for joining a contest.

All the people at the Bahamas Board of Tourism wanted were people to visit their site. Everyone knows that the Bahamas has sun, tropical fish, beaches and nice hotels. So chances are a normal television ad showing a honeymooning couple holding hands walking in the sand, or a family snorkeling with yellow and orange fish wasn’t going to get people to visit the site. But making a cheesy TV comericial talking about some new seemingly great self-help program might get those bored holiday couch patatoes to visit the site bahamavention.com on their next trip to Google land.

Plus the name is memoriable. You’re going to have a Bahama-Vention to get you through being overworked, stressed out, and untanned? The name just sticks. Need some help why not a bahamavention. Although Bahamas is pretty easy it’s not that memoriable. Everyone knows that the Bahamas exist. But they don’t know what a Bahamavention is.

The commerical doesn’t really tell you exactly what the bahamavention is, and better yet the bahamavention.com site doesn’t really tell you what it is either. If you keep digging around sooner or later one of the many many links on the site will exit you to the actual Bahamas.com tourism site.

So what can we learn as budding marketers from this scheme:

1. Have stickyness - have a memorable name or logo or phrase that doesn’t neccessarily tell your audience exactly what you are selling or offering but sticks in their head when they see something related to your product.

2. Relate to Your Audience - The Bahamavention relates to most couch potatoes in cold climates by saying it solves your untan skin problem, and relates to most people in the work force by talking about solving problems with being overworked and stress out.

3. Be Elusive - Don’t mention what your product exactly is or how it can solve problems but mention what it can solve. People want to know how things get done, we’re curious beings. By only mentioning what it can solve and not how it does it, most people will be interested finding out the how and will be intrigued to learn more.

Now the Bahama Board of Tourism went even further and made the landing page for www.BahamaVention.com it’s own site rather than redirecting to www.bahamas.com. They even carried out the cheesy infomercial like ad on several pages and made it look believable. I would imagine that making a one pager with all the redirects in the world to the actual page would have the same effect, but leading people on is so much more fun.

Either way, check out www.BahamaVention.com and see what I mean. A good marketing idea that we all can learn from.

It’s a new year, I’ve made it back from vacation, and I’m looking towards a great 365 days to come.

It’s funny how when January 1st comes around people all over the world make promises to themselves and others that “this year will be different.” New Year’s Resolutions to be successful, loose weight, and accomplish all the goals they weren’t able to accomplish the year(s) before.

Will 2007 be different for you?

I’m not making any goals right now, but I will say this. I’m going to “Go Big” in 2007, and begin to build, build, build the businesses I’m starting by thinking BIG.

I’m reading the new book by Robert Kiyosaki and Donald Trump about Why They Want You to Be Rich, and everyone knows that Donald Trump thinks BIG! Now thinking big is one thing but what The Donald does is also act big. He acts on his thoughts and goes for it. I feel like I already think big but I don’t act on those thoughts. I don’t put those thoughts into action.

Therefore I’m going to focus on taking all the knowledge I’ve gained through reading and doing over the past year and combine that with some big thoughts, turning them into actions, and GOING BIG!

I’m not divulging my goals just yet but I’m going to be shifting the main focus of this blog, which really has no focus right now, into a more helpful resource of information for others who want to think and act big while building businesses. Don’t worry, for those of you who like the personal stories I’m not going to abandon those personal experiences. Rather, I’m going to better organize and intertwine them into a central theme of building businesses and business systems.

I hope you all continue to follow my progress work towards being BIG in your own way.