Tax Deductions for Domainers

As March approaches, it is time for most of us (especially those of us in the United States) to turn our focus to taxes.  For domainers there are a number of deductions you can claim on your taxes, and Domain Name Wire recently published a helpful list of tax deductions for domainers.

Here are the 12 included (click over to get the full descriptions):

  1. Domain conferences
  2. Annual domain registrations
  3. Internet access
  4. Home office
  5. Mobile phone
  6. Domain software
  7. Domain services
  8. Web hosting
  9. Advertising
  10. Meals and Entertainment
  11. Legal expenses
  12. Office supplies

Please remember to consult an accountant before filing your taxes.

How Resellable Is That Domain Name?

Lately Rick Latona has been giving you some great things on his blog to think about before making a significant purchase on a domain name.   Today I wanted to add something to the list that I spend a lot of time considering before buying domain names. 

Have you ever seen a domain name for sale that is accompanied by an incredibly long description or explanation of why you should purchase it?   Things like what it means in another language, what it is a misspelling of, or a full paragraph about how incredibly valuable it will be someday.  If its going to be so valuable, why are you selling it?!?

Before buying a domain, I always take the possible requirement of a explanation into account.  Generally if it requires explanation, I don’t buy it.  The two exceptions to this rule are when people provide related domain sales values and when details are provided for geo domains.  If you’re try to sell me a geo domain, let me know the population, tourism information, and any other information that might be useful.   I will of course verify that information prior to purchasing, but it gives me a snapshot and grabs my attention.  

If a domain is going to be truly valuable (non-geo), it should really sell itself just by typing the domain name.  If an explanation is needed, it probably isn’t worth nearly what you think it is.

Excuse Me? Your Registered That Domain Name?

Hopefully anyone who reads this post will take it with a grain of salt as I will be venting a little bit, but has anyone else noticed the really poor choice of domains registered lately?  Check out any of For Sale sections of the domain forums and you are in for a real treat.  

I’m sure we’ve all had those “What was I thinking?” moments on ocassion, but many of these domains are really bad.   I mean really really bad.  In many cases, they are so bad that I wouldn’t take them off their hands for free because it would just clog up my accounts.  Do these people just have unlimited money to waste?  Do they even try?  Is any research completed prior to the domain purchase?

Unfortunately, domainer ettiquette requires me to refrain from posting a “WTF?” type of response to their posts, so I figured I would put it here.   I would really like to know what some of these people were thinking when they register their domain names.  Has anyone else noticed this trend getting much worse over the past few months?

As a quick footnote, I thought it would be fun to mention our worst domains ever registered.  It is never a good idea to register a domain just because it sounds cool, but I was guilty of that when I registered ShadowOrb.com.   Yikes!   What was the worst domain you ever registered?

Domaining in a Recession

With the current recession in the United States (despite what people say, I live here, and it is), domainers have started to place a lot of attention to their portfolios and many are trimming them down as much as possible prior to renewal to save some cash.   I know this because I am one of those domainers. 

My approach was to re-evaluate my portfolio about a month ago and figure out which domains I do not plan to renew, then go out and try to get whatever I can for them.  $7.00, $5.00, $3.00?   It is all better than just letting them expire and getting nothing out of them.   I’ve still got a few names left that I’d like to move, but I must say that I’m pretty happy with what remains of my portfolio and I’ve now got a little money to play around with in the aftermarket. 

So, what other factors should domainers consider when investing during a recession?  

  1. Renewal Prices – Domain renewal rates appear to be going up about 7% a year, and this will likely continue for the immediate future.    Keep an eye on registrar rates and don’t be afraid to transfer your domains to a more affordable registrar when that domain comes up for renewal.   This does not mean go to 1and1 of course, but there are always domain coupons to consider and special offers that you take advantage advantage of with the main 7 registrars. 
  2. Look for Deals – The domain message boards are filled with all sorts of great domains going for next to nothing.  Monitor this area and get some steals from struggling domainers. 
  3. Develop Domains – As I trim my portfolio, I’ve been digging through my names to see which ones I could easily develop.  This is generally a smart method to protect your investment for a domainer anyway, but with parking income down lately, it has almost become essential.  I use a few techniques including keyword sniping (form of niche blogging) and BANS to easily monetize these sites and produce a steady income.   My goal is to find methods that require a minimal amount of upkeep, but will generate comparable or additional income vs parking the domains.

What methods are you using right to continue to grow your domain portfolio?

Developing Your Domain Into An Online Brand or Identity

While doing my daily crawl through Namepros today, I noticed an interesting thread that really caught my eye.   The post is a poll inquiring about how many people own the domain of their message board name. 

Upon follow up a couple hours later, I was surprised to see how many people answered no.  In my opinion, they are missing a great opportunity.  Not all domainers maintain a weblog, but most have an established online identity in some form that they should want to promote. 

When I decided I wanted to start domaining as a hobby, the first thing I did was purchase this domain name to start establishing my “domainer identity.”  On all domaining forums that I visit, you can find me as “Slick Domains” or “SlickDomains”.   When I leave comments on other blogs, I use that name.  My hope was that it would become a trusted identity over time for people asking questions about domaining, or when decided whether to buy from me/sell to me.   If I registered at the forums with the name “Kyle” that would be pretty difficult to do.    

Out of curiousity, how many of you have taken steps to develop your identity?   Do you use different names at different boards?   Do you do anything to promote yourself? 

Protect Your Domain Investment by Knowing Domain Law

For all of you active domainers out there that try to keep an eye on the industry, you’ve probably been spammed with blog posts and even e-mails recently regarding the Snowe bill, which is a bill that could have very negative implications on domainers world-wide.   Basically this bill, if passed, would give businesses with trademarks more access to domains than they currently have, costing many domainers thousands if not millions of dollars in losses due to being forced to turn over their domains.

The Snowe bill is obviously the biggest threat to our industry, but there are several things that a domainer needs to be conscious of in general when determining whether to invest into a particular domain name.   Over the past decade, there has been a lot of presidence established that helps guide internet law and provides you with general guidelines to follow.  

If you are interested in doing what you can to protect your investment, you first need to understand how things work from a legal perspective.  Domain Bits has taken the time to collect a bunch of things you need to know when it comes to Domain Law.   Here are the subjects covered:

  1. The Contract Rules
  2. Your Domain Can Be Shut Down
  3. No Such Thing As Domain Ownership
  4. US Law Overreaches International Boundaries
  5. Generics Can Be Trademarks
  6. Registrars Will Park Your Domains
  7. Record Keeping
  8. Private Whois
  9. Accurate Whois
  10. Front Running
  11. Hijacking
  12. Most Registrars Aren’t Helpful
  13. Not Much Legal Protection

Click over to get full explanations of each option and make sure you are doing whatever you can to protect your investments!

Is WWW Dead?

While going through all of my sites yesterday and performing maintenance/upgrading WordPress, I noticed a trend that I adopted without even knowing it.   All of my existing websites (20+) have been setup without the www prefix in front of them. 

Like I said above, I wasn’t even really conscious of my decision to change, but at some point in the last few years I quit using www.   So why did I change?  Well, why not?  The internet is always evolving and I do my best to evolve with it.   Whether it is trends in domaining, website development, or whatever else I’m working on, I always try to make adjustments.

In looking around at some of my favorite websites/blogs, it looks like many people have evolved with me by dropping the www from their domain names.   Are you still using the www?  If so, is it personal preference or another reason?

Strategy When Investing in LLLLL.com Domains

With the LLLL.com domains long gone, it is domainer nature to move on to the “next big thing”.  Each domainer may have a different opinion of what exactly that is, but it seems many are moving on to LLLLL.com domains, with CVCVC.com domains getting most of the focus.   Without checking, I’m pretty sure that many of these domains are already gone! 

One term that has become popular on the domain forums is the word pronouncable when advertising these domains.  It is the same tactic that was used with LLLL.com domains.  Pronouncing many of these domains is quite a stretch, and the ones that are pronouncable in type, may not be when verbally spoken. 

One thing people need to ask themselves before investing in one of these types of domains for a potential end-user sale is whether or not it can be spelled multiple ways when pronounced verbally.  The goal of having a brandable domain is to associate the name with the product or service, and this includes verbal association.

When spoken, if saying the domain name results in several possible spellings, then it isn’t a brandable domain name in my opinion.   One example would be Colo.com.  When pronounced, it could sound like it would be spelled Solo.com or Kolo.com.   What about Pedi.com.   Is that spelled Pede.com?  Or Pedy.com?  Or even PD.com?  This is something to keep in mind when investing in this market.

With that said, there are many great brandable domains in this market, includes established sites like Sedo.com, Bido.com, etc.  I love domains ending in “o” and think they are brilliant.  But there are other CVCV.com domains that would work great as well.

What do you look for when investing in LLLL.com or LLLLL.com domains?

Domain Name Age and the Google Sandbox

In the past we’ve talked a little bit about domain name ages and helping your website to avoid the Google sandbox.  The basic idea is that Google has a natural penalty called the Google sandbox for all domain names that have been registered for a short period of time.  The exact time frame is unknown, but is believed to be between 6 months and 18 months, with the majority of people thinking it is closer to 6 months.  This was added as a way to fight off spammers who register a domain, use it for 3 months, then move to a new domain for another 3 months, etc.

Unfortunately, this causes a penalty for websites/blogs that are launching a legitimate site, causing many serious developers that know about the sandbox effect will pursue aged domains when setting up a new site, especially ones that come with Google PageRank.   This is good for us because it creates a potential end-user sale for a domainer.

I’ve noticed many domainers seem to forget to factor in things such as PageRank and domain age when determining the value of the domain name they are selling.  These are very important and can add a lot of value to your domain.  If you want to read more about domain ages, there is a great write up over at URL Academy called The Age of a Domain Name.  The post includes some great tips for avoiding the Google sandbox!

Tips For Contacting Domain Name End-Users

The way the world of domain names has been going, if you aren’t one of the top dogs who started grabbing names a decade ago, you probably either need to start developing your domain names or starting pursuing end-users for your domain names.

There are a variety of ways to go about this, but I’ve always felt it was best to examine Google’s search results for your keyword domains and attempt to contact various sites that are competing under those keywords. You may also want to pay attention to what sites are paying to advertise under those keywords, as they might be the most likely to have interest in the domains.

Before contacting end-users, you’ll probably want to spend some time working on drafting up a generic e-mail where you can just fill in the blanks with the companies information. Here is an example of an e-mail I’ve used in the past:

Hello, My name is <<Your Name>> and I am the owner of the domain name <<Domain Name to Sell>>.  I am currently in the process of selling this great domain name and thought you might be interested. You have a very impressive site and I’m sure that you can see the value in having a premium domain name when competing for the best search results, especially in the competitive <<keyword>> industry.

If your company is interested in bidding on this domain name, please feel free to contact me with any questions or for any additional details.

Thank you for your time and consideration,
<<Name>>
<<E-mail Address>>
<<Phone Number>>

How do you go about approaching end-users?