aka. Part 2 – Want to Build a Side Business? Just Buy a Great Domain Name
Previously, we suggested the idea of acquiring an expired domain name as the impetus for building a side business. No idea required. The domain will be your inspiration. And you’ll leverage the unique advantage a keyword descriptive domain provides as you build a legit product or service. All while holding down a full-time job.
As we finished that article, we decided to pause before covering how to identify & acquire an expired domain, as the topic is quite lengthy. Well, we paused & we’re now ready to dive in.
So – expired domain names – they can be finicky, fair warning. But not so daunting that you can’t grasp the process (don’t forget, I’m a mental moron, and I figured it out). You just gotta understand the shortcuts.
Before we truly dive in, just remember two things – The Drop & Exclusive Inventory.
We’re ready Sweet Pete! Let’s get it on!
K’ugh.. you’re back.. ok. Wasn’t sure if you were returning from the last article. Apparently you are.
Glad to have you.. Let’s get back on topic.
The domains we’re targeting have just completed the expiration process – meaning, someone abandoned them, and they’re headed back to the general registration pool. As they head through this process, lots of folks (like me) are inspecting ’em, proddin’ ’em, researching to determine whether they might possess any inherent value. And if they do, we utilize software services to increase our chances of sniping a domain the milli-second it becomes available. The moment when large blocks of previously registered domains become available for general registration is more commonly known as ‘The Drop’.
When an expired domain name truly drops (ie. enters general registration from an expired status), there are a multitude of events occurring behind the scenes, mainly involving hordes of custom-built software systems submitting registration requests for domains of value (typically keyword descriptive or short in length, etc.). And not just a few registration requests – a tidal wave of registration requests. So many that it’s near impossible for a human being to manually beat them to names that are dropping into general registration. Like zombie fans at a sporting event clawing each other for t-shirts propelled from plastic cannons, these software systems are clawing each other with the hope of wrapping their digital fingers around a coveted domain name. And only one ‘drop-catching’ software system will succeed in that effort.
So who are these domain grabby-snatchy
companies? And are these services that I can use?
Ahh, perfect segue…
First, let’s cover how to view lists of domains headed to the Drop, and then we’ll cover the companies that provide drop-catching services.
So, everyday, roughly 100,000 domain names expire. If you’re curious to see what a list looks like, click here and view any txt file under the ‘Pending Delete’ heading.
About 99.9% of those domains are garbage. Probably more, actually.
But every now and then, nested within a daily drop, are diamonds in the rough. Great domains to cherry-pick and use as the foundation of a side business.
But how the do I sift through 100k domain names to find interesting ones, Pete ‘n Repete?
The easiest way is, you don’t.
Most drop-catching companies will show you the most popular expired domains that are dropping each day/week. No need to sift. No need to go cross-eyed. Just shop out of someone else’s shopping cart.
To start, you’ll need to know the drop-catching companies. Then I’ll give you a few pointers to get you on your way.
Drop Catching Companies
These are the ‘grabby-snatchy’ companies. They’re the ones with the sophisticated software you can leverage. They’re where you go to place your backorders. All these providers are competing in the attempt to grab a ‘dropping’ domain. [these providers are up-to-date as of 2020, and will be updated continually in the future should a new provider arise]
Using the providers above will give you the best statistical chance of successfully entering an auction for an expiring domain name. (And yes, for the experienced domainers out there, we realize that unique providers like Dropcatch don’t require a backorder to participate in an auction, and that NameJet/Snapnames have a partnership, but for the sake of simplicity, we’re gonna recommend a backorder on all providers, to keep things simple.)
You said I could view popular expiring domain names – where do I do that, SweetnSalty Pete?
Two places are an easy start: NameJet & Snapnames.
NameJet will show you on their homepage. Look here:
Those suckers are headed for the Drop. And those domains already have backorders placed against them, indicating their popularity.
And here at Snapnames..
Same deal. A curated list of domains for you to peruse.
Find a domain you like on one of those lists, place a minimum $ backorder for it on all those providers above.
But Peetey, what happens after I backorder, and the auction begins?
Then you truly get your ducks in a row and really determine if this is a business you wanna enter. Run the numbers, guesstimate how much profit you could generate after your first or second year. Use that framework to identify a comfortable bid price for your domain.. Cause if you win, they’ll ping your credit card and push the domain under your control. (Most places require a wire transfer for bids over $5k, fyi). The auction period usually runs 3 days so you have some time for analysis.
Here – I’ll provide the methodology & napkin math I used before acquiring DudeRanch.com (which dropped & was caught by Snapnames):
Prior to acquisition, I looked at the competitive landscape online. There seemed to be opportunity within the directory/marketplace niche, and since that model is somewhat straightforward, I could develop the website in-house and save a bundle on development costs. So in this business model, my customer would be the dude rancher, and I would effectively charge them a flat yearly rate for inclusion, and it’d be my responsibility to drive them bookings throughout the year. From a numbers standpoint, if I charged them $300/year, and was able to sign up 100 dude ranchers, that’d equate to $30,000 a year in gross revenue.
So that’s what I used as my rough ceiling when that auction began. I ended up winning the domain for roughly $18k (although I woulda bid up to $50-75k cause I adore adventure travel). I used credit cards to cover that cost, and paid it off in 6 months from the salary of my 9-5 job.
Got it, although I might start with a little lower budget than that, NeatPete
Totally fine – whatever is most comfortable. By the time I bought DudeRanch.com, I had been buying/selling expired domains for 3 years, so that type of investment was easier for me to justify.
Now, remember at the beginning of this article, I told you to remember two things? The Drop, and Exclusive Inventory? Well, we’ve covered The Drop.. time for Exclusive Inventory.
Exclusive Inventory, aka. Pre-Release
So the drop is the drop – a free-for-all of systems fighting for a soon-to-be-available name. Sometimes, though, prior to the drop, a registrar partner will attempt to auction off soon-to-expire names as ‘Exclusive Inventory’, potentially skipping the entire drop process.
Sorta like when Target releases their own custom Shopkin toy. Sure, there are Shopkins for sale at most toy stores, but if you want this specific Shopkin with the *purple* briefcase, you’re gonna have to hit Target, and only Target, to buy it.
Registrar partners operate in a similar fashion – they’ll attempt pre-auction names they have exclusive access to through their relationship with the originating registrar. If they don’t receive any nibbles (ie backorders), they’ll release the name into true expiration where it heads to the Drop.
So, in many ways, Exclusive Inventory is as important as The Drop. And the good thing for you? Most drop catching services will showcase the most popular ‘Exclusive Inventory’ domains as well.
Like NameJet here:
And Snapnames here:
If you find a domain you like, place a backorder on that sole provider. No need to place one anywhere else – again – they’re exclusive inventory only available on that platform.
The lone wolf nested within Exclusive inventory is GoDaddy Auctions. They’re unique, in that, instead of leveraging a 3rd party to auction their exclusive inventory, they simply built their own auction platform to perform this precise function. And it’s a marketplace you can’t ignore, cause they’re the largest registrar and control the most inventory headed into expiry status.
To see their exclusive expiring domains, just visit the link above, then sort by ‘Bids’, ‘Traffic’, or ‘Estimated Value’ (it says ‘Valuation’ in the image – that’s been updated to ‘Estimated Value’. I’m too lazy to update the image).
(The ‘traffic’ column is unique to GoDaddy auctions. This extra data point is helpful, but don’t treat it as gospel. The numbers have been known to be inflated, so proceed with caution there.)
Ok, ReetiePete, so this is where I start to browse, right? Start scanning these names looking for one that strikes my fancy and might have a baked-in business model? Sí ?
You got it dear reader. Just scan these list looking names that strike an interest and represent an interesting niche/category. And yes, you’ll see some smut names here and there, so wear your PG-13 hat and you’ll be fine.
Keep an open mind as you browse. Opportunities come in all shapes and sizes. If you woulda asked me 10 years ago if I was interested in starting a Dude Ranch vacation marketplace and Vidalia Onion eCommerce business, I’d have asked you to repeat the question, and when you did, I’d have asked you to repeat it again. But when DudeRanch.com & VidaliaOnions.com expired, the opportunity to acquire them, leverage their tailwind, and build services that address pain points in their industries was too great. And most importantly, sounded like a lot of fun.
This is your sandbox. Take your time. I’m usually drawn to domains that represent niche categories (like CharterYachts.com and BirthdayParties.com), but that’s just me. Ftr, both of those names were won at auction as well – within GoDaddy Auctions to be specific.
My personal tips:
- Buy only .COM domains
- Try your best to stick with 1 or 2 words. 3 word domains tend to get a bit clunky
- No dashes in your domains, ie. sweet-pete.com
- Don’t mix numbers with words, ie. sweet-pete4prez.com
This is your entry point. The more you monkey-around in these platforms, the more ways you’ll find ways to slice & dice the inventory. This rabbit hole runs deep. Buckle up. Thanks for reading. This is the second longest article I’ve ever written.
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