How to Build a Domain Name Portfolio

Many of our corporate and domain investor clients come to us for help in building their domain portfolios. Following is a brief discussion of key threshold questions we ask them to consider before they begin purchasing domains in bulk.

New vs. Premium Aftermarket

As a domain buyer, you have two options: buying new domain names from a registrar like our own Website Registry or purchasing previously registered domains either from Website Registry's premium domain portfolio, in the aftermarket at sites like Sedo, Domain Name Sales or Flippa, or directly from a private seller. The costs involved in these two types of transactions are very different.

New: Depending on the registrar and domain extension annual costs for new names can range from $8-$100.  Premium Aftermarket: Since premium domains have already been registered, prices for quality names in the aftermarket can range from $10 to over $1 million with most quality names selling for between $1,500 and $5,000.  As with the sale of physical real estate, there can be additional costs involved in the sale of previously owned domains. These costs can total as much as 15-20% of the purchase price and include such things as brokerage fees, escrow fees, wire transfer fees, legal fees and any other miscellaneous fees involved in the transaction. When you search for a domain at Website Registry, we also provide you with a list of premium names to choose from, many of which are offered at reasonable prices.

If preliminary research suggests that there are still several quality domain names available to purchase new, we recommend that you focus your energy and your budget on new names to ensure that you secure these names before someone else does. Once you secure this portfolio of new names, you can assess your budget and determine if there are specific premium names you want to target. Direct Navigation (Lawyers.com) vs. Brand Names (Lexis.com)

For several reasons, we often recommend that you focus first on registering direct navigation (also called "generic") names. First, there are often a finite number of strong, direct navigation names in a particular niche area and an infinite number of brand name possibilities. Next, direct navigation names are often the best for search engine optimization since direct navigation terms are the most frequently searched keywords. Finally, because of their limited supply and their value in search engine optimization, direct navigation names are top targets for domain name speculators.

Registration Terms

Domain names can be registered in one-year increments for any length of time. To ensure that names are not dropped and to minimize administration time, many domain owners register their key domains for multiple-year periods (i.e. 5 or 10 years). However, if you have a limited budget and if several premium names are available, we recommend that you build a larger portfolio of names and register them for one year. This will limit your upfront cost freeing you to secure more domain names. Also, you will want to review your portfolio on a regular basis (at least annually), to determine which names to renew, drop or add. When you decide to develop one of your domains, it may be advantageous to renew that name for multiple years as recent patent filings from Google suggest that domain name age and registration period may be relevant factors in its website ranking algorithms.

Summary

Following is a summary of the proposed strategy. While much of it is general in nature, it establishes a context from which to work:

  • Focus first on building a portfolio of new, direct navigation domain names with a registration term of one year;
  • Based on budget, determine if any premium names are worth pursuing;
  • Review portfolio on periodic basis to determine which domains to renew, drop or add.

Website Registry is the official source for domain name registration, turnkey websites, website hosting, SSL certificates, search engine optimization and more.