I blogged about some of my successful site and domain purchases and sales before, but this time I’m going to tell you about a rather different story. As is known failures are a part of any business and if you don’t fail you simply don’t try hard enough. However I try to see failures as merely temporary setbacks and don’t let them stop me, but rather try to learn the lessons and make the necessary adjustments to prevent them further along the way.
One of the first domains I purchased with the sole purpose of reselling it for more about 4 years ago was a 2 word .com generic. It had many good results in Google, quite a few advertisers in adwords. Was a solid 2 word generic and registered since 1998. Many potential end users and even the previous owner was an end user, however I got lucky (or so I thought..) as he didn’t have any further need in the domain since he was retiring from his business.
I was researching keywords manually and emailing .com domain owners to see if they might sell the domain cheap, a long and tedious job, but it is how most domainers who didn’t have the privilege of registering the top generics back in the late 90’s make their money. So I emailed this domain owner and he replied that he’s retiring from his business and willing to part with the domain. I offered $5k and he rather quickly accepted. The deal went through escrow and a few days later I was a proud owner of a 2 word .com generic domain.
There was a lot of excitement at first. I collected a large list of potential end users from Google results and ads and similar domains in other tlds and emailed them all. Several replied asking for price, but none seemed to be much interested after receiving my overly optimistic price tag of around $30k. I also tried selling it on the forums and auctions with no results. Then I decided to put it on ebay. The auction ended at only around $500. That’s when it hit me – I seriously overpaid for the domain!
So what went wrong? The domain was indeed a 2 word .com registered since 1998 and with a decent amount of google results, but it had a negative connotation – which is a very bad sign for a domain. There weren’t many searches on the main keyword and all the end users couldn’t afford to pay much for it. The advertisers on google were either low budget local companies, or even non profit organizations. I was totally wrong in my initial evaluation.
I tried to sell the domain several times after that but never got any significant offers to at least get back half the costs I paid for it. I still own the domain and it serves as a good reminder to be careful and do more and extra research and all the proper due diligence when buying. It’s a constant reminder not to be overly excited about any new domain purchase and keep a healthy dose of realism in my evaluations.
Do I still see it as a failure? Not at all, I’ve learned many lessons on this one and they have paid off many times over since I applied them to my other purchases. I did lose quite a bit of money on that first one – especially considering that I didn’t have much cash to invest in domains back when I was just starting with it – but it taught me some invaluable lessons which has proven to be a good trade off! Don’t get discouraged from your mistakes, but rather absorb the lessons and move on!