Domain investing is the art and practice of acquiring a sought after domain and monetizing it in an effort to turn a profit. I eat,  sleep and breathe this topic 7 days a week and in my personal opinion there are 5 cardinal rules that one must follow:

1.The Double D’s aka Due Diligence- Everyone has moments where they think they stumbled upon the next big idea. Minimize your buyer’s remorse by researching keyword search volume, advertiser competition, cost per click value, keyword difficulty and demand for your concept.

2.Organization is key-In my tenure working at the #1 domain registrar in the world I’ve watched in total dismay as people have let killer domains expire due to lack of organization. As a new start up every penny counts and you have to avoid costly mistakes like redemption fees, back order fees, hosting restore fees or bidding on the auction in an attempt to recover a domain you could of renewed for only $8.49. It’s imperative you keep track of  all costs involved including development and marketing to know your profitability.

3.Create a strategy-Before focusing on the acquisition, focus on how you’re going to make this investment profitable. Are you developing a directory? How about a product portal? Is it purely content driven? How do you plan on creating equity? How much will it cost for development and seo? How much time do you want to invest and how much of the work do you want to do yourself? Are you going to monetize through premium advertisements, adsense or affiliates? Define what success means to you and what’s next after you achieve your goals.

4.Take action- This one is so simple yet this is the #1 reason domainers fail. Don’t become an expert on acquisitions, anyone can acquire a domain. Focus on business development and marketing/sales! Don’t be afraid to pick up your phone and cold call end users.

5.Do not become emotionally attached-This is a big one! Set your price realistically based on current market value. I see domainers fall into this trap time and time again. If you receive a serious offer and it’s in line with market norms then act on it while you can! At the end of the day domains are only valuable when someone else wants it. Investing in domains can quickly turn into a hobby, so it’s vital that you remember your primary purpose- To turn a profit! I’ve had multiple investors share stories where they passed up decent $x,xxx offers and never received another.

So there you have it, the 5 cardinal rules to domain investing. I didn’t go into  specifics because each topic deserves its own article. If you have any suggestions you would like to add please feel free to comment.

-Nima

Quote: “Domains have and will continue to go up in value faster than any other commodity ever known to mankind.” – Rick Schwartz