Now that you have decided on a strategy for identifying domains to purchase as well as secured the financing to make those purchases, it is time to turn to the actual practice of holding and maintaining your domains. In this section we cover some basic ground rules and insider tips to keep in mind as you purchase and manage your domains.
- Organize and auto-renew.
If you’re holding domains for longer than a year, it’s a very good idea to have them all set to auto-renew. Make sure all of your contact info is correct and updated, and if necessary, change registrars. Whatever source of funds (credit card, PayPal) you use to pay for auto-renew should always have enough in extra funds so that in case you miss the notices, you’re still able to avoid auto-cancellations, which usually cost more to get back than a new registration.
- Don’t fall in love with a domain name.
Plain and simple, your goal in domaining is to make a consistent profit. One of the biggest mistakes new domainers make is holding on to a domain just because they like the name, or personally feel its worth more than the market will bear. If a domain doesn’t sell and you can’t monetize it to at least cover its costs, the domain is just dead weight. A name may sound unique or potentially popular, but you have to face the possibility that it may not havea market value beyond what you paid for it. Ridiculous domain names (the very sort new domainers tend to get attached to) can be lucrative, but the buzz may not last long enough for you to hold out for more money after a decent bid comes in. So when you are dealing with a gimmicky domain name and you get your chance to make a quick profit, take it.
- Name that domain.
Whether creating new domains or acquiring existing ones, the current trend (which doesn’t show signs of changing) is to stay away from those domains that have digits and/or hyphens, as both naming schematics devalue a domain. The only exceptions are specific 3- and 4-digit domain names, most of which are all taken.
- Taste this.
After you register a domain, many registrars offer a few day grace period during which you can rethink your purchase and still get a full refund.Domain tasting, is the ethically questionable, but legal, act of utilizing this loophole by parking a domain, testing the amount of type-in traffic, then cancelling it before the grace period expires. Most registrars are starting to recognize these loopholes and are quickly cracking down on this unscrupulous practice, but with those registrars that haven’t yet barred the practice, this can be a very good way of minimizing the risk of a purchase.
- Create traffic.
If you own domains that aren’t receiving a lot of type-in traffic, you may want to try to increase their value by getting them indexed into the search engines so that the eventual purchaser will find it easier to get the site to rank for relavent search engine results. The easiest way to do that is to place a link with relavent anchor text to the domain on one of your own related websites. In addition to getting the domain indexed, this is also a way to advertise the domain to interested buyers. Linking to your domain is generally allowable by most parking sites, but you may want to check with yours just to make sure.
Everyone loves to use forums to exchange information and to connect with people who have similar interests, and as a result many new domainers buy up “forum” domains. But if you’ll notice, very few people are getting rich managing forums, and even fewer are making money holding on to forum domains. Popular forums can generate tons of traffic, but domains with “forum” in the name are worthless without the actual site. Unless you can find a buyer capable of turning it into a site, or can build the site yourself, stay away from “forum” domain names.
- Be prepared, legally.
If you decide to domain full-time, talk to an accountant about at what point in the yearly tax cycle is financially most advantageous for you to form your domaining enterprise into a legal entity. Forming a legal entity can be a headache, but by not doing so, you may be missing out on business deductions you might otherwise be able to take. So, just in case, keep all your relevant receipts, even if you’re just starting out, to prove to the IRS how much you invested.Potentially more important than financial concerns, however, are the legal ones. Deciding to form a limited liability entity (Inc. or LLC) will limit your personal financial risk if legal problems ever arise. Though the legal differences between LLC’s and corporations can be subtle, they are not insignificant, (e.g. differing tax treatment) so you should do your research before forming an entity.
- Watch for pinchers, swipers, and thieves.
Sex.com was stolen from its owner using a fake transfer form, eventually costing the owner millions. Slammers, spammers, swipers, and claim jumpers will try various tricks to get a domain away from you, including fake renewal email messages or snail mail letters (e.g., Domain Registry of America scam letters). If you fall for one of these sneaky transfer forms, you may end up paying extra for a domain or accidentally “permitting” the transfer of your domains to someone else.In addition to having your existing domains hijacked through subversive transfers, there are an increasing number of reports of people having their domain ideas pinched before they can register the domain themselves. It appears that a number of domain research tools are culling the data from users’ searches, and using that data to instantly purchase the searched domains before the searcher himself can do so. So, for example, if you are using a tool to research available domains and come across a real gem, the owner of the tool you are using may swoop in and buy up the domain, thus taking advantage of your ingenuity while depriving you of a great domain. Because of this possibility, it is important that if you come across a previously unregistered gem domain, spend the few bucks right then to buy it up rather than take the chance on losing it by waiting a few minutes.Beyond pinches and swipers, you also need to keep an eye on your registrar. There are a number of reports of domain registrars being intentionally slow or unresponsive in the days leading up to a domain’s expiration so as to ensure that the domain expires and reverts back to the registrar. If you have a dispute, check with WIPO for mediation, but the best policy is just to protect yourself in the first place by having at least a full-month’s buffer when transferring registrars.