The Super Simple Secret to Investing in Domain Names

The Super Simple Secret to Investing in Domain Names

There's a super simple secret to investing in domain names, and as soon as you read this post you'll think -- 'Yes! Why don't I focus on that when I buy domains?!'
Why do some domain name investors make hundreds of thousands of dollars a year in profit, while other domain name investors lose money on their renewals every year?
It's all because of the domain names they buy.
And I was thinking about how I could boil this lesson down into the most simple, straight-forward statement of the difference between successful and unsuccessful investors.
And here it is:
Successful domain name investors buy domain names that other people want.
And the converse, of course, is true too: Unsuccessful domain name investors buy domain names that no one else wants.
Let me give you a visual, because it's not binary.
It's not just "good or bad domain name" but a graduated difference between domains people want and don't want.
Visualize a funnel of sales inquiries.
A funnel is wide at the top and narrow at the bottom.
In the sales process at companies, the marketing department is responsible for bringing as many potential customers as possible to the sales funnel.
As they're going down the funnel, most customers will not be interested in the company's offerings.

But at the bottom of the funnel are the few sales prospects that are interested and are most likely to buy the company's product or service.
In order to maximize sales, you want an efficient sales process in the funnel, but you also want as many potential customers or prospects at the top of the funnel.
The sales funnel applies to domain names too.
But the funnel is made of segments.

The first funnel segment is when you -- the domain name investor -- think of a domain name to register or purchase that you believe other companies might want to buy.
You think it's a good domain name but you don't base your decision on any data...just your gut feel.

In this case, your domain name is likely only registered in the .com top-level domain, the most valuable top-level domain.

But what if you did a search and found that the domain name was registered in 140 different top-level domains.

Now you can see that there is a lot more interest in the domain name, because either other companies or investors saw the value in the second level domain and registered it.

Either way, there's more interest in this domain name.

That's the middle layer of the funnel, and it increases the top of the funnel and allows more potential buyers to flow down to the
bottom.

So in addition to you thinking the domain name has value, there are a host of other people who also think the domain name has value and have spent money to register it in other top-level domains.
But wait, what if there were a bunch of companies that were using domain names similar to the domain name you registered or purchased? Yet again, in addition to you thinking the
domain name has value, and in addition to there being a host of other people who also think the domain name has value and have spent money to register it in other top-level domains,
now there are a bunch of companies that are using sub-optimal domain names in -- for example -- companies who have prepended or appended words like "my", "group" or "inc" into their domain name.


That's the top layer of the funnel, and -- again -- it increases the top of the funnel and allows more potential buyers to flow down
to the bottom. AND, that top segment of the funnel likely
includes the most valuable potential buyers -- those with a company and money to buy your domain name.
Domain names that only cover the bottom of the funnel will likely cost an investor less than domain names that cover the bottom, middle and top of the funnel.

But with education, perseverance and hustle, you can find some great deals...like domain names that cover both the bottom and middle segments of the funnel for only registration fee.
Or domain names that cover all areas of the funnel, but are under market value. Successful domain name investors buy domain names that other people want.
That means they buy domain names that cover the entire funnel.