How to prepare for a domain auction.

Whether you are in the market for a particular domain name, or looking to expand your domain portfolio, domain auctions offer a plethora of new investment opportunities worth exploring. Before you start purchasing domains, however, there a few steps you must take to properly prepare for your purchase and ensure that you’re making the most of your investment.

Know Your Budget

One of the greatest draws to a domain auction is the low prices. Whether the auction has low or no reserve prices, you have the chance to name your price and make an offer on a domain. But what happens when you find yourself in a bidding war? This is when knowing your budget is crucial. Your initial offer may be well under the amount you are willing to spend, but if the bidding continues to rise you must know your limit. Setting a budget for yourself, or for a particular domain, will help you to purchase a domain at the appropriate value.

Learn About Your Prospective Domain

Among the long list of domains available in an auction are expired domains, which for one reason or another, current owners have abandoned. While there’s nothing wrong with many expired domains, it is essential to obtain some background information on your prospective domain. Determining how old the domain is and its traffic potential are great starting points, but learning how the domain was originally used is also important. If the domain was used in an illegal manner, such as spamming, it will be difficult to recover its SEO potential should you choose to develop it after purchase.

Be Patient

In any transaction, both the buyer and the seller are anxious to complete the sale in a fast manner. However, this is normally not the case in a domain auction. Domain auctions often run for a specified period of time and each domain is open to any buyer throughout that time period. Unless there is a “Buy Now” option within the auction, you may be stuck watching for opposing bidders throughout the auction’s duration.

If you have considered selling your domain, you may have also thought about the possibility of domain leasing. While an outright sale might be your first choice, domain name leasing is an alternative that offers both advantages and disadvantages. Depending on the lease agreement, the leasee, and what you want out of the deal, leasing might be a viable avenue worth exploring in your quest to sell your domain name.

Pro: Leasing serves as a stepping stone for purchase.

As a seller, you want to make the highest possible profit on your domain sale. While it’s important to know the value of your domain and have an ideal selling price in mind, you’ll need to find a buyer who is willing and able to pay that price. By finding a buyer who equally values your domain, you’ll have the opportunity to make a great sale, but sometimes a few extras months to raise funds is necessary. So instead of walking away from purchase potential, allow the prospective buyers a lease to buy agreement that gives them time to come up with the appropriate amount of cash to buy the domain outright after the lease term.

Con: You cannot accept other offers for purchase.

Unless you’ve included clauses in the lease agreement that allow you to break the lease to sell to a higher bidder, you are stuck in your current lease situation. Even if a new buyer presents an offer you can’t refuse, you’ve already made a commitment to your leasee and if they have intent to purchase at the end of your leasing term you’re not missing out on a sale completely.

Pro: With new development, your domain gains more exposure.

While you remain the sole owner of your domain through the entire term of the lease, your leasee will have the rights to develop your domain in the way they choose. By correctly developing the site and working to draw traffic to it through SEO or PPC campaigns, your domain will gain more visibility and credibility. This will be especially beneficial should the leasee back out at any time, which will give you the opportunity to put it back on the market.

Con: Domain development may harm your domain’s value.

Domain development does offer the opportunity to increase visibility, but it also runs the risk of damaging your domain’s “reputation.” If your leasee develops the domain in an inappropriate manner, whether including illegal material or spam, your domain runs the risk of losing value. In order to avoid this, you should include a clause in the lease agreement that prevents the leasee from incorporating any damaging material on your domain.

Find your next buyer in two simple steps.

If you’re looking to complete a fast and profitable domain sale, you’ll need a proactive selling approach. Instead of sitting back and waiting for your next buyer to approach you with an offer, it’s beneficial for you to conduct a bit of your own research in order to locate potential prospects.

Research Who’s Paying for Rank

When it comes to gaining a positive search engine ranking, companies have two options available to them. They can choose to pursue an organic strategy, hoping that their SEO efforts will help them to rise naturally in the search rankings, or they may utilize a pay-per-click strategy that allows them to choose what keyword searches they would like to be visible for. Both approaches have their pros and cons, but most companies would probably prefer an organic approach if it were to work successfully.

Not every company is fortunate enough to earn high page rank and a great click through rate organically though, and this is where the PPC approach can come in and provide an alternative method of visibility. If the domain you are trying to sell fits a particular keyword, you should be searching that term to see what companies are using PPC for search placement. For example, if you own DogWalkers.com, you will want to Google “Dog Walkers” to determine what businesses are paying for ad space on that search query.

If these companies are willing to invest in a PPC advertising campaign, they might also be willing to make an investment in a keyword-rich domain that would benefit their organic approach.

Prospect on LinkedIn

This same search approach is beneficial on LinkedIn as well. Whether you focus on companies that incorporate your domain’s keyword in their company name, or in their description, you’ll want to add them to potential prospects.

Sticking with the earlier example of “Dog Walkers,” you have the same opportunity on LinkedIn to search for both companies and groups that match that term. Companies who incorporate “Dog Walkers” into their title will appear at the top of your search, where you can click to see more information and potentially find a contact worth following up with. You’ll also find groups that will include followers that are both in the “industry” or interested in the product or service.

Both of these outlets offer a perfect chance to find potential buyers that have a stronger buying potential than any random buyer that you might approach.

Make a profit by mastering the domain sale.

If selling was a one way street, completing a domain sale would be infinitely easier. Unfortunately, selling requires more than making the decision that you’re ready to sell one or more domains. Since buyers are crucial to a successful domain sale, taking their perspective into consideration can be a huge advantage in making a profit on the sale of your domains.

Target a Specific End User

While it’s tempting to try to attract any and all potential buyers, this approach will not be very effective in selling your domain in a quick and efficient manner. If you’re serious about selling your domain and making a profit when doing so, you’ll want to search for buyers who have a related need, which will mean targeting a specific end user. If your domain fits a particular industry or niche market, take the time to conduct your own research and find out which individuals could benefit the most from your domain.

Promote Where Buyers Are Looking

Of course you can post your domain everywhere, but it will only be helpful if it’s visible to buyers. If, for example, you post on your personal blog about your domain being for sale, but your blog is about pet care and the domain is targeted towards landscapers, chances are you are not reaching the right audience. A better resource to take advantage of would be a domainer’s blog. Someone in the domaining industry, that attracts the attention of both domain sellers and buyers, will have a better chance of spreading the word to the right people who actually have buying potential.

Another great promotional tool today is social media. The use of hashtags, such as “#domains,” provides you with the perfect opportunity to get your domain sale noticed in the right conversations and puts you in front of more promising buyers.

Utilize Domain Selling Tools

In addition to promoting your domain on your social networks, there are numerous buying and selling platforms online that provide a greater opportunity for your domain’s visibility. By listing your domain or domain portfolio on a domain marketplace site, such as Afternic, you can increase awareness about your domains for sale. You can also target specific end users, as mentioned earlier, by categorizing and pricing your domain so interested buyers can narrow results to exactly what they are looking for.