Bill Sweetman manages the Tucows YummyNames domain portfolio, and Tucows’ office is right down the street from mine. So after reading my articles on domain investing and Tucows, Bill suggested we meet for lunch. We hadn’t met in person until now even though we’ve been working in close proximity for awhile.

Over the course of our lunch we talked about managing aftermarket domain portfolios, and the higher margin business of selling domains to end-users at retail prices. When your cost basis is low (and in Tucows’ case it is basically the cost of wholesale registrar registration), it doesn’t take much to lock in healthy margins and decent profits.

5 key takeaways came out of our meeting, and Bill was good enough to expand on some of them via email later:

1. Whypark is a great way to develop names. not necessarily for bringing in more revenue than parking, but for getting the domain visible in search engines. It increases the chance of the domain “being found” and basically works as a lead generation mechanism. Bill elaborates:

yes, and “development” of domains in general, like ‘staging’ an
empty home that you have up for sale, helps stimulate interest in
buying the domain. My theory is this helps the buyer ‘visualize’ the
potential of the domain name. And for the SEO-savvy buyers, the fact
that domain is developed and ranking well in the Search Engines means
they have a headstart on getting organic traffic.

2. Get your inventory listed in the marketplaces and networks: sedo, fabulous, buydomains,etc. The increased dealflow offsets the commissions you’ll have to payout. Also:

although technically there are marketplaces (Afternic, Sedo,
Fabulous, NameDrive) and — the holy grail — distribution networks
(DDN, AfternicDLS, Sedo MLS). Ideally you want to be doing both, but
you should at least start with the marketplace part. Big win.

3. Set “buy now” prices on your domains. To which Bill hastens to add:
   

   yes, and preferably realistic ones! ;+) Price them to sell!

   Which, as I always say, is a lot easier to do when your cost basis is low. Not so much if you’re already paying inflated prices for your inventory on the aftermarket.

4. Set a minimum price for all your domains. Bill has found that having a price lower than $499 doesn’t increase the odds of a sale, so may as well set your minimum pricing on your domains to $499 or so.
5. And straight from Bill via email:
   

   I forgot to mention another ‘best practice’ for selling your domains which is to include a “for sale” message in the WHOIS, which is something we do and some other portfolio holders do

A couple other takeaways that came out of our lunch are that we both think that eventually there will be a “bull market” in the .CA aftermarket and if you scour through the volume, you can still pickup some good deals on buying domains via ebay or some of the auction places.

It’s not every day I get to sit down with the manager of one of the largest domain portfolios in the world, so I enjoyed the opportunity immensely.