- Ever wonder how to buy and sell expired domain names
for a profit?
Well, we're talking about it today on "The Journey".
Hey everyone, I'm Nealy
and I have a special guest today, Joe from GoDaddy.
Why don't you go ahead - Hi.
- and introduce yourself.
- Hi, how's it goin'?
I have been working in GoDaddy's aftermarket
for more than 10 years,
having a lot of fun helping people buy and sell domains.
- Right on, and we're talking about how to buy and sell
expired domain names today. - [Joe] Right.
- So, let's just jump right into it.
So, first question,
how does a domain name get to that expired status?
- Well, you stop paying for it.
That's the easy answer, right?
(Nealey laughs)
Once you buy a domain name,
you're actually just able to get it
for a certain number of years, depends on the name.
Most is about 10 years is the most you can do it for.
So, when that time comes up that you've paid for,
at the end of that, you get a chance to renew it.
And if you don't renew it, then it's gonna expire.
- Okay, so I can't just buy a domain name indefinitely?
I have to essentially keep renewing my lease?
- Yeah, that's exact, that's a great example.
It is kinda like a lease.
You have to keep paying for it.
If you don't,
then you're gonna lose the rights to that name.
- All right, if I'm watching a domain name
that I wanted to buy and I see it's about to expire,
do I get it right then and there?
Or what does that process really look like?
- It depends on what the TLD is.
So if it's a COM or if it's a CO, UK, or an EDU,
it might have different time frames,
but by and large, it's about 30 days that you have
as a grace period for most domain names when they expire
for you to be able to renew it.
So you forgot - Got it.
- your credit card expired, whatever the case may be,
you still have a grace period.
After that grace period is over,
then that name's gonna be up for grabs
for other people to purchase.
- Got it, so that's good,
especially for most of the domain owners
or everyday entrepreneurs that have their own domain names.
If you, if life happens and you forget to renew it,
you at least have that
grace period. - [Joe] Right.
- But don't go any further, 'cause after that
then it's open to the public for anyone to buy.
- Yeah, pretty much.
What's gonna happen after that grace period is over,
in almost all cases is that name is gonna wind up
in an auction somewhere, be it at GoDaddy auctions
or other third-party companies like NameJet.
When those names expire,
the registrars will send them to another auction site
and then they're up for grabs for people to buy.
- Talk us through a little bit
about once that domain hits that auction,
what the process looks like.
Like if I saw a domain name I wanted,
how can I go about actually acquiring it?
- Well, the best thing to do
is to get to that auction house.
So, you can try and find out which name
goes to which auction house.
The two big ones that you wanna look at
are GoDaddy Auctions and NameJet.
Those are pretty much where most of the names
are gonna wind up.
And that's gonna give you the first chance in line
to get that name.
So when a name expires, there's gonna be other people
that are interested in that name,
especially if it has value.
So if it has value to you,
there's a good chance it has value to somebody else.
You wanna be first in line.
The place to do that is the auction houses.
After that, if nobody buys 'em,
then they'll expire back and go to the registry
where people can have a chance
to get a back order on the name.
And that's kinda like in basketball,
they throw the ball up in the air and it's a jump ball
and people try and grab it.
Whoever grabs the name first gets that back order.
- [Nealey] Okay.
- It's kinda like Ticketmaster, too.
If you've ever tried to get tickets
for a really popular concert
and you're first, you click the button
and then it puts you in some random line,
and then it'll process through.
It's the same thing with a back order.
There's hundreds of different companies out there
that may be trying to grab the name at the same time,
and you have one chance or a couple chances,
depending on where you go, to grab that name.
That's the back order process,
which comes after the expired name auction.
So you wanna be in front of that,
you wanna be at the auctions if you really want the name
so it doesn't wind up there
and you have a much better chance.
If you win the auction,
you wind up with the name. - Okay.
Now with the domain auctions,
I mean if I were to go buy a normal domain,
it's anywhere from like $10 to $20 typically.
Is that about the price range for those auctions?
Or how, what's a typical price I can expect to kinda pay?
- Sure.
GoDaddy starts its auctions at anywhere from $10 to $12
for the expired names
and NameJet starts at $69.
So that's gonna be the baseline price
that you're gonna have to pay.
Depending on how popular it is,
the price can go up from there.
But you know, that's gonna be the least amount
that you'd have to pay.
- With the people that end up buying these domain names
in the auctions,
do they typically just try to flip 'em and sell 'em again?
Or are these people that actually want the domain names
for their business or their brand?
- There's a lot of a mix of who buys the names.
We have a lot of investors that come to the auction
that are looking to get these names
at a wholesale price, right?
They expire, - Yeah.
- They're seeing, hey if I can get this name for $12 or $70
and I know that it has value,
I can resell that later on.
But there's also a lot of end users that'll come.
There's companies that are interested in names
that maybe they weren't able to reach the person
who owned the name, for whatever reason,
and they could never buy the name directly from them,
so they're watching it carefully when it expires.
Or they just figure that we should watch out.
There's companies like CSC that watch for corporate names.
And they say, "Oh this would be a really great benefit
"for Coca Cola, so let me get drink.com because that expired
"and I really wanna buy that for my customer
"and let them know."
So you don't have to wait for the name to actually expire.
One way to do that is to use a back order.
We have a back order and one thing that that does
besides just try and catch the name
after it goes through the auction is it includes a monitor,
and it'll tell you when there's changes on the WhoIs,
which is a public database,
kinda like a white pages for your phone number.
And that tells not only who owns the name,
but when it's gonna expire and if there's any changes.
So the name servers change
or the person who owns the name changes,
that monitor will kick in and send you an email
to let you know, hey somebody else owns this name now.
Maybe you can reach out to them and try and buy it instead.
And when it expires, it'll tell you,
"Hey, this name went to the auction."
And it'll give you a free auction credit,
it'll cover your renewal cost for the domain name,
and give you a $10 credit on GoDaddy.
If you're using a site like NameJet,
you can back order any name,
even if it's not gonna expire soon,
and it'll tell you if it's gonna hit
the auction that they have.
So a great way to get in front of that auction line
is to put a back order in,
either with us or NameJet,
and then you'll get alerted when there's changes
so you know that name's gonna expire.
- I hear a lot about people buying up different domain names
and just parking 'em and putting up ads on it.
Can you really just talk us through what that is?
- Yeah, that's a great option.
If you have a name like VideoCameras.com,
you can use a parking product, we have cash parking,
there's a lot of other free ones that are out there,
and what it does is it will put ads on the page.
So ads are served when people go to VideoCameras.com.
If they click those ads, you get a portion of that money.
The thing that's really valuable for me, if I use parking,
is to see the amount of traffic that comes to that name.
So you can see how many visitors come
and how many people click on ads.
And if you have a lot of visitors coming,
even if the ads don't pay that much money, you can say,
"Wow, this is a very popular name.
"Maybe I should re-look at what I wanna sell this for."
- Now that makes sense.
If it's getting a ton of traffic,
it just makes it more valuable to someone
that's wanting to buy it.
- Right, if I'm selling video cameras, as a store,
and I own VideoCameras.com
and I know there's a lotta traffic coming,
then I can say, "Wow,
"these, are all potential customers for me."
- [Nealey] Yup. - So, it's gonna
make that more valuable.
- I mean, great segway, 'cause my next question
is what makes a domain name valuable?
- Well there's a couple things high level
that are good to keep in mind.
The shorter the name, usually the more valuable it is
because it's more memorable.
It passes what we call the radio test,
where if I say it to somebody, it's easily spelled,
so there's not a lot of different various spelling.
So like color might be spelled one way in America
and another way in Great Britain.
So if it's got a short, easy to spell, memorable name,
that's gonna add value.
Usually the older the name is, the more valuable it is
because other people have seen value in that name
for a long time and it's been registered over time.
And also if there's not a lotta confusion,
like we talked about with the different spellings.
If you add a hyphen in a name,
- [Nealey] Yup. - there's numbers in a name,
you don't know if that's a spelled out number
or the actual number.
So, less things that can confuse people,
the more valuable it'll be.
- I'm sure many of the people watching are really interested
in possibly buying and selling domain names.
So, what advice do you have for them
of really how to get started
and get their feet wet with this?
- Oh, if you're just starting out,
the number one thing you can do is take it slow, right?
Watch videos like this,
try and learn as much as you can.
Buy a couple domain names and try and sell 'em.
See what the process is like.
Start calling people that think,
that might be interested in buying this name
and see what their feedback is.
The other thing that is really valuable
is to stick with the niche that you know.
So if you have a skateboard business
and you're buying and selling skateboards all the time,
you can go and look at domain names
that are related to skateboards
and figure out with pretty good accuracy
what that would do for your business.
- [Nealey] Yeah. - What kinda customers
would it bring in?
What kinda profit would it potentially bring to you?
And why would it be valuable for you to either own
or keep it out of the hands of your competitor?
And from there, you can gauge a good idea
of what the actual value is.
So stick with something you really know.
Start with those names first.
Try and sell 'em and see what the feedback is like
when you list them for sale.
And once you get a good feel for how that works,
then you can slowly expand to other markets.
- I know domain investing can almost become addictive,
right? - Mm-hmm.
I think it's funny because that's a great way to put it.
It can definitely get addictive,
especially after you make a sale.
And you run out and you think,
oh, I'm gonna get a bunch more and sell 'em.
- (laughs) Yeah. - But you have to be
very careful, especially when you start out.
Just start out slow to really understand
what names you can actually sell.
You don't wanna just rush out and spend a lotta money
on names that you might not ever make the money back on.
You don't wanna lose all your money.
- Yeah, 'cause I know renewals can get costly, right?
The more and more you add those $10, $15,
adds up when you have 10, 20, 30, 40, 50,
- Right. - and then you haven't
sold any, it gets tough.
- Yeah, and that's another reason why I said
that you should start slow.
The carrying costs of a big domain portfolio can get pricey.
Even if it's only $10, $11 domain name,
if you've got 1,000 domain names, that can add up.
And if you invest slowly
and you have $5,000, $10,000 to invest,
if you buy two or three names that are really good names
that you know that would add value to your company,
then next year, if you're still sitting on those names
and they didn't sell, it's $30 to renew
instead $10,000, $11,000 to renew.
- Well, thanks so much, Joe, for being on the show.
- Thanks for having me.
- Yeah, and if you got some value outta this video,
make sure you smash that Like button.
Add a comment below if you've ever bought an expired domain.
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This is "The Journey".
I'll see you next time.