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I am not a domainer. But I spend a fair bit of time haggling with domainers.

I’m what most domainers would call an ‘end user’. Or as an old boss might say: ‘a schmuck who spends too much money on over-priced domain names’.

In short, I want to buy premium domains for my websites. Often, I approach owners of parked domains or mothballed sites out of the blue.

Alas, many domain sellers try their luck with the same old Jurassic negotiation tactics. If you’re a domainer and guilty of these, I believe you are harming your business.

1. Saying you’ll only sell for a “life-changing sum of money”. Sedo listing reads “Price: $600”.
2. Pretend you’ll be “running your offer past the company board”. Two minutes on LinkedIn tells me you’re a one man band.
3. Inventing a 3rd party owner. The bluff is usually a) obvious and b) unconvincing.
4. Refusing to name a price…
5. …then refusing to name a price range.
6. Requesting blind incremental bids against a mythical “last minute bidder”.
7. Aggresively slurring every approach as “lowballing”, “timewasting” or ‘tirekicking’…
8. …before a price has even been discussed.
9. Dismissing an offer without making a counteroffer.
10. Not maintaining WHOIS details on a domain with the same dollar value as my home.
11. No company website when I’m trying to contact a domain owner.
12. Refusing to give a company name, phone number or even first name in email correspondence.
13. Installing a jazzy WordPress blog on a $100,000 domain… with no contact form and no content. Unless you count the default WordPress about page…

This is an example of a WordPress page, you could edit this to put information about yourself or your site so readers know where you are coming from. You can create as many pages like this one or sub-pages as you like and manage all of your content inside of WordPress.

14. Pricing domains at 100x the going rate for comparable TLDs, keywords, sectors etc.
15. Insisting your .INFO domain commands a $20,000 price tag. Not like the junk .INFO domains every regular schmuck has, you understand…
16. Confusing ‘passive aggressive’ with ‘expert negotiator’.
17. Patronising buyers. That means “talking down” to people.
18. Claiming to have had ‘a much higher offer years ago’ for a 3 month old dropcatch domain.
19. BSing about traffic/earnings: “I’ll make that from the parking revenue alone” [read: “…over the next 80-100 years, provided Go Daddy slash reg fees to $1/year”].
20. Insisting that ‘serious buyers’ don’t ask about existing traffic/earnings.
21. Pretending that you plan to develop the domain… when 30 seconds on Google shows you’ve been hawking it on Sedo, BuyDomains, DNForum, NamePros etc since 2005.
22. Lying about selling links. Especially via Text-Link-Ads.com
23. Denying the Google ban or pagerank penalty is anthing to do with the above.
24. Claiming your .COM is worth “so much” that you haven’t *needed* to register the .NET & .ORG (funny – neither has anyone else).
25. N00b domainers seeing how many of the above they can tick off in one email.

What Domain Buyers Really Think…

Individuals, companies and domain names have been redacted to spare blushes, but every single example above is real.

I understand that the big bucks for most domainers is in selling to end users. Now, while I’m not buying $100,000 domains – or anything close to – I do regularly buy and bid on aftermarket domains.

For most domainers, I imagine these kind of sales – low $XXXX sales to people like me – are the bread-and-butter of their business.

Domainers, if you want to sell your domains for money – the kind you can spend on rent, groceries, mortgage payments – then the ‘arrogant geeks’ act needs to be retired.

To recap: It’s only a business if your domains earn money. Otherwise… it’s an expensive hobby.

5 Ways To Sell More Domains

Rather than just calling people out on bad practices, it’s only fair if I explain what I’d do differently:

1. Be Honest. Nobody wants to buy anything from somebody they know – or even suspect – is lying.
2. Gain Insight. Don’t assume a buyer’s motivations are identical to your own. I am no more interested in your parking revenue CPM rate than your shoe size or favorite ice-cream flavor.
3. Be Polite. Do I seriously have to explain this one?
4. Learn To Sell. Some domainers live in the dark ages of the internet. I’ve heard has-been jargon (‘gets plenty of hits’) quoted like an elderly relative name dropping the Rolling Stones.

   Your potential buyers care about things like traffic, earnings, branding etc.

5. Think Global. Outside the US, countries like the UK and Germany are big aftermarket domain markets. And people do business differently.

   I’m not suggesting anybody start quoting Fawlty Towers. Or learn how to conjugate German verbs. But a little effort goes a long way.

I’ve always believed that ‘type-in traffic’ for undeveloped keyword domains was vastly over-exagerated. Now I have the figures to prove it.

For the unitiated, Wikipedia explains ‘type-in traffic’ as

Given some success stories, you’d be forgiven for concluding that premium, keyword domains are worth buying for the tsunami of type-in traffic they’ll unleash on your site.

Why would the domain industry perpetuate the myth of type-in traffic? It’s one of the pillars on which domainers regularly price domains, ergo it helps inflate prices.

While I’m not saying for a moment that there’s no such thing as type-in traffic. But I am saying that the volumes we are talking about for a typical keyword domain (.com or ccTLD) are laughable.

How Many Domains Get Type-In Traffic?

1,822,377 domains are parked with Sedo, says DomainTools.com as of 8 July 2009.

Sedo’s list of ‘high traffic’ domains parked with them shows Sedo parkings top performers.

What percentage of parked domains get serious traffic? Here’s a clue: think of your favourite very small number… and then halve it.

Nope, not even close.

Sedo’s most recent stats show a mere 25 domains get traffic in double digit per day. By the time we hit domain number 26 in their rankings, we’re in single digits. See for yourself:

(Source: Sedo.com)

So 0.001% of domains parked with Sedo get double digit per day traffic. Or to put it another way, 99.999% of domains parked with Sedo don’t hit double digits daily.

It gets worse. The traffic figures in this table are not exclusively type-in traffic:

The “Hits” indicate the average number of times per day the domain’s parking page was viewed through direct browser type in, from an old external link, or from a search engine query.

Is Type-In Traffic Laser-Targeted?

For developed websites, that is often the case. In 2005, WebSideStory research found the conversion rates for different sources of traffic to be:

• Direct Navigation (Including bookmarks) – 4.23%
• Search Engines – 2.30%
• Links – 0.96%

Users typing in domains for established sites are more likely to be repeat visitors, for example, so more likely to convert to a sale.

But is the same true of type-intraffic to undeveloped domains? I’ll wager not. Let’s examine some of the domains in Sedo’s High Traffic Domains list and make an educted guess why they get traffic.

Here are the first five traffic domains I checked out:

• Teach.co.uk: Users mistyping Teach.gov.uk, the UK government teachers’ portal.
• RSS.com: Former corporate brochure site with 1000s of backlinks.
• Jewel.com: Users looking for the huge US singer-songwriters official site
• Belly.com: Users looking for the Canadian rapper’s official site
• CX.com: Users looking for ConsumerXchange at CX.org

Does this sound like the tightly-qualified traffic we hear so much from domainers? Nope, it sounds like junk traffic.

Even some domain industry insiders don’t drink the ‘highly targeted traffic’ kool aid. A senior staff member from a major domain company recently admitted to me that the golden age of domain parking was long gone. Another was recently quoted (on condition of anonymity) saying…

“The amount of traffic across the industry would be roughly 70% typo and the remainder from generic.”(Link)

My theory? Domain parking revenues are on the slide is advertisers are wising up to measuring the performance of traffic from different sources.

I love premium domain names, and there are lots of reasons to buy them – for branding, investments, avoiding Google’s sandbox etc.

But type-ins traffic? Let’s get some perspective, people.

How To Earn A Living From Domain Parking

Domains (.COMs) cost around $7 per year to register in bulk, so need to earn $0.02 per day to cover costs. Anything extra is profit.

Clickthrough rates on parking pages are high – up to 30% are reported – so let’s say you get 31 visits/month earning $0.10 per click at a 30% clickthrough.

Our hypothetical domain grosses $11.16/year parking, less our $7 registration fees = $4.16 profit/year.

You either need:

• 3275 domains getting low-level traffic (eg, earning $4.16/year profit) to meet the US Federal minimum wage (on a 40 hour/52 week basis)
• Domains in high value niches (eg, real estate) to squeeze dollars from a trickle of traffic
• Super-premium one word .COMs or country-specific domains (eg, Cameras.com)

But X Earns $1000s From Type-In Traffic…

Is it possible to make a living this way? Yes.

I have one friend who could live off the type-in traffic he gets from one domain.

Jeff Libert – AKA WebmasterWorld moderator WebWork – gave a stellar talk at PubCon once on the topic of generating high-value legal leads from generic keyword domains.

And I don’t doubt for a moment that Rick Schwartz might earns $300/day parking candy.com.

Marchex, a public company, have based their entire business model around owning premium domains with direct-navigation traffic.

But are these results typical for keyword domains? The answer is no. Joe Schmo’s two word keyword domains are going to struggle to cover their registration fees – let alone lunch! – with the money earned from type-in traffic plus domain parking.

The figures aren’t much better if we develop our hypothetical domain into a site. 31 type-ins per month = 372 visits per year. Unless you are operating in super-competitive niches you can probably buy 372 visits via AdWords for less than a keyword domain priced at 5-10x annual parking revenues.

Why Parking Revenues Are A Meaningless Metric

Parking revenue figures are regularly trotted out by domain owners to justify pricing. And yet they are utterly meaningless for retail domain buyers.

Even a premium domain like Jet.co.uk – perhaps one of the top UK travel domains for sale today? – fares little better for traffic. Let’s assume make a few assumptions:

• Jet.co.uk gets c. 8,400 visits/year on the figures published by Sedo.
• Jet.co.uk could sell for $100k in a down market (a similar 3 letter .co.uk travel domain, Fly.co.uk, sold for $175,000 to Doug Scott’s ASAP Ventures last year).
• We want to recoup an investment over five years.

Let’s crunch the numbers:

• 8400 visits a year = 42,000 visits over five years.
• $100k for the domain = $2.39 per visitor.

Bottom line: the cost of most keyword domains in most industries cannot be justified by the traffic the naked domains get.

Are Generic Domains Massively Overvalued?

I own hundreds of domains, and have just spent $XXXX on a one word generic domain a few days ago.

Keyword domains are unbeatable for many reasons: branding, user trust, search rankings (users link with the domain as the anchor text), existing backlinks, exact match ranking…

But I hear the ‘type-in traffic’ myth pedaled time and again to prop up la-la-land pricing. Domain owners peddling these lines calculate prices using two variables: ‘wishful thinking’ and ‘herd mentality’.

British and American readers will spot similiarties with the housing market, while students of economics may recall the concept of ‘manias and bubbles’ in market psychology.

Don’t get hoodwinked with the fools gold of type-in traffic. For most keyword domains, it’s all but invisible to the human eye.

Hate mail to the usual address.

PS. Buy lots of fresh domains? Check out my Firefox extension, Domain Lookup. It helps you find keyword domains while browsing the web, and integrates with 60+ top domain registrars.

Futher Reading

• More about Sedo Parking
• High Traffic Domains at Sedo
• How To Buy Domains Like a Pro
• Business 2.0: Masters of Their Domain
• Is type in traffic really all it’s cracked up to be?
• The Death of Domain Parking
• Use Direct Navigation for Affiliate Marketing
• Top 4 Lies Domainers Tell Themselves
• Domain Parking Traffic Conversion Myth