Build a Side Business on the Internet

[ 🆕 updated Sept 2023; added GName.com domain backordering ]

aka. Part 2 – Want to Build a Side Business? Just Buy a Great Domain Name

Previously, we suggested the idea of acquiring an expired domain name as the impetus for building a side business. No idea required. The domain will be your inspiration. And you’ll leverage the unique advantage a keyword descriptive domain provides as you build a legit product or service. All while holding down a full-time job.

As we finished that article, we decided to pause before covering how to identify & acquire an expired domain, as the topic is quite lengthy. Well, we paused & we’re now ready to dive in.

So – expired domain names – they can be finicky, fair warning. But not so daunting that you can’t grasp the process (don’t forget, I’m a mental moron, and I figured it out). You just gotta understand the shortcuts.

Before we truly dive in, just remember two things – The Drop & Exclusive Inventory.

We’re ready Sweet Pete! Let’s get it on!

K’ugh.. you’re back.. ok. Wasn’t sure if you were returning from the last article. Apparently you are.

Yup…

Glad to have you.. Let’s get back on topic.

The domains we’re targeting have just completed the expiration process – meaning, someone abandoned them, and they’re headed back to the general registration pool. As they head through this process, lots of folks (like me) are inspecting ’em, proddin’ ’em, researching to determine whether they might possess any inherent value. And if they do, we utilize software services to increase our chances of sniping a domain the milli-second it becomes available. The moment when large blocks of previously registered domains become available for general registration is more commonly known as ‘The Drop’.

The Drop

When an expired domain name truly drops (ie. enters general registration from an expired status), there are a multitude of events occurring behind the scenes, mainly involving hordes of custom-built software systems submitting registration requests for domains of value (typically keyword descriptive or short in length, etc.). And not just a few registration requests – a tidal wave of registration requests. So many that it’s near impossible for a human being to manually beat them to names that are dropping into general registration. Like zombie fans at a sporting event clawing each other for t-shirts propelled from plastic cannons, these software systems are clawing each other with the hope of wrapping their digital fingers around a coveted domain name. And only one ‘drop-catching’ software system will succeed in that effort.

So who are these domain grabby-snatchy
companies? And are these services that I can use?

Ahh, perfect segue…

First, let’s cover how to view lists of domains headed to the Drop, and then we’ll cover the companies that provide drop-catching services.

Expiring Domains

So, everyday, roughly 100,000 domain names expire. If you’re curious to see what a list looks like, click here and view any txt file under the ‘Pending Delete’ heading.

About 99.9% of those domains are garbage. Probably more, actually.

But every now and then, nested within a daily drop, are diamonds in the rough. Great domains to cherry-pick and use as the foundation of a side business.

But how the do I sift through 100k domain names to find interesting ones, Pete ‘n Repete?

The easiest way is, you don’t.

Most drop-catching companies will show you the most popular expired domains that are dropping each day/week. No need to sift. No need to go cross-eyed. Just shop out of someone else’s shopping cart.

To start, you’ll need to know the drop-catching companies. Then I’ll give you a few pointers to get you on your way.

Drop Catching Companies

These are the ‘grabby-snatchy’ companies. They’re the ones with the sophisticated software you can leverage. They’re where you go to place your backorders. All these providers are competing in the attempt to grab a ‘dropping’ domain. [these providers are up-to-date as of 2023, and will be updated continually in the future should a new provider arise]

• NameJet
• Snapnames
• Dropcatch
• Dynadot
• Namecheap Auctions
• Sav.com Backordering
• Gname

Using the providers above will give you the best statistical chance of successfully entering an auction for an expiring domain name. (And yes, for the experienced domainers out there, we realize that unique providers like Dropcatch don’t require a backorder to participate in an auction, and that NameJet/Snapnames have a partnership, but for the sake of simplicity, we’re gonna recommend a backorder on all providers, to keep things simple.)

You said I could view popular expiring domain names – where do I do that, SweetnSalty Pete?

Two places are an easy start: NameJet & Snapnames.

NameJet will show you on their homepage. Look here:

Those suckers are headed for the Drop. And those domains already have backorders placed against them, indicating their popularity.

And here at Snapnames..

Same deal. A curated list of domains for you to peruse.

Find a domain you like on one of those lists, place a minimum $ backorder for it on all those providers above.

But Peetey, what happens after I backorder, and the auction begins?

Then you truly get your ducks in a row and really determine if this is a business you wanna enter. Run the numbers, guesstimate how much profit you could generate after your first or second year. Use that framework to identify a comfortable bid price for your domain.. Cause if you win, they’ll ping your credit card and push the domain under your control. (Most places require a wire transfer for bids over $5k, fyi). The auction period usually runs 3 days so you have some time for analysis.

Here – I’ll provide the methodology & napkin math I used before acquiring DudeRanch.com (which dropped & was caught by Snapnames):

Prior to acquisition, I looked at the competitive landscape online. There seemed to be opportunity within the directory/marketplace niche, and since that model is somewhat straightforward, I could develop the website in-house and save a bundle on development costs. So in this business model, my customer would be the dude rancher, and I would effectively charge them a flat yearly rate for inclusion, and it’d be my responsibility to drive them bookings throughout the year. From a numbers standpoint, if I charged them $300/year, and was able to sign up 100 dude ranchers, that’d equate to $30,000 a year in gross revenue.

So that’s what I used as my rough ceiling when that auction began. I ended up winning the domain for roughly $18k (although I woulda bid up to $50-75k cause I adore adventure travel). I used credit cards to cover that cost, and paid it off in 6 months from the salary of my 9-5 job.

Got it, although I might start with a little lower budget than that, NeatPete

Totally fine – whatever is most comfortable. By the time I bought DudeRanch.com, I had been buying/selling expired domains for 3 years, so that type of investment was easier for me to justify.

Now, remember at the beginning of this article, I told you to remember two things? The Drop, and Exclusive Inventory? Well, we’ve covered The Drop.. time for Exclusive Inventory.

Exclusive Inventory, aka. Pre-Release

So the drop is the drop – a free-for-all of systems fighting for a soon-to-be-available name. Sometimes, though, prior to the drop, a registrar partner will attempt to auction off soon-to-expire names as ‘Exclusive Inventory’, potentially skipping the entire drop process.

Sorta like when Target releases their own custom Shopkin toy. Sure, there are Shopkins for sale at most toy stores, but if you want this specific Shopkin with the *purple* briefcase, you’re gonna have to hit Target, and only Target, to buy it.

Registrar partners operate in a similar fashion – they’ll attempt pre-auction names they have exclusive access to through their relationship with the originating registrar. If they don’t receive any nibbles (ie backorders), they’ll release the name into true expiration where it heads to the Drop.

So, in many ways, Exclusive Inventory is as important as The Drop. And the good thing for you? Most drop catching services will showcase the most popular ‘Exclusive Inventory’ domains as well.

Like NameJet here:

And Snapnames here:

If you find a domain you like, place a backorder on that sole provider. No need to place one anywhere else – again – they’re exclusive inventory only available on that platform.

The lone wolf nested within Exclusive inventory is GoDaddy Auctions. They’re unique, in that, instead of leveraging a 3rd party to auction their exclusive inventory, they simply built their own auction platform to perform this precise function. And it’s a marketplace you can’t ignore, cause they’re the largest registrar and control the most inventory headed into expiry status.

To see their exclusive expiring domains, just visit the link above, click ‘Advanced Search > Type > Expiring Auctions’.

(The ‘traffic’ column is unique to GoDaddy auctions. This extra data point is helpful, but don’t treat it as gospel. The numbers have been known to be inflated, so proceed with caution there.)

Ok, ReetiePete, so this is where I start to browse, right? Start scanning these names looking for one that strikes my fancy and might have a baked-in business model? Sí ?

You got it dear reader. Just scan these list looking names that strike an interest and represent an interesting niche/category. And yes, you’ll see some smut names here and there, so wear your PG-13 hat and you’ll be fine.

Keep an open mind as you browse. Opportunities come in all shapes and sizes. If you woulda asked me 10 years ago if I was interested in starting a Dude Ranch vacation marketplace and Vidalia Onion eCommerce business, I’d have asked you to repeat the question, and when you did, I’d have asked you to repeat it again. But when DudeRanch.com & VidaliaOnions.com expired, the opportunity to acquire them, leverage their tailwind, and build services that address pain points in their industries was too great. And most importantly, sounded like a lot of fun.

This is your sandbox. Take your time. I’m usually drawn to domains that represent niche categories (like CharterYachts.com and BirthdayParties.com), but that’s just me. Ftr, both of those names were won at auction as well – within GoDaddy Auctions to be specific.

My personal tips:

• Buy only .COM domains
• Try your best to stick with 1 or 2 words. 3 word domains tend to get a bit clunky
• No dashes in your domains, ie. sweet-pete.com
• Don’t mix numbers with words, ie. sweet-pete4prez.com

This is your entry point. The more you monkey around in these platforms, the more ways you’ll find to slice & dice the inventory. This rabbit hole runs deep. Buckle up. Thanks for reading. This is the second longest article I’ve ever written.

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[updated April, 2022]

So you wanna start a side business while holding down a full-time job. Kool. Dang smart move – that’s the same route I took – ten years ago now.

Self-funded, no VC to appease, no angel investor to update. Just you, and your sandbox of ambition.

Hmm, but where to start? Which idea to pick?

HERE’S A SUGGESTION

Now, before you go off and attempt to create the next Uber (and fail spectacularly), would you allow me a moment to introduce a friendly alternative? A shortcut towards a market you might not be familiar with. A market that’s dern amicable to aspiring entrepreneurs and can help remedy ideation roadblocks. A market that’s been around for years and most folks utilize without a thought. A market where you, as a solo founder, can instantly create an unfair advantage.

The reveal (or not, cause it’s in the title):

DOMAIN NAMES

Well Peter, you idiot, I know about domain names – they’re those things you buy after you devise a concept or idea in order to build a website. Big whoop dude. This article sucks.

Eeeassy. I get it. I’m not talking about domain names in reference to the idea you came up with (Fwackoo, right?).
I’m talking about viewing domain names as an asset. As your inspiration.

Let me take a step back & paint a picture for you.

Here’s the scene: you’re planning a neat bike tour vacation across Spain. It’s your first time considering this type of trip, so you’re interested in gathering a little info on the industry before ultimately booking a vacation.

Cool. Now, let me present a choice to you. A binary option where you determine which website you’ll visit to research, plan, and book your trip. But you’ll base your initial decision solely off the domain name itself.

Two options. Both sites provide similar information and booking options. One choice, take your pick:

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BikeTours.com

or

GoSojourn.com

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You chose BikeTours.com didn’t you? You better have. If you didn’t, you can close this browser tab and go back to scrolling Facebook.

But honestly, look at those options again. Those are both legit bike tour vacation providers. For me, it’s almost instinctual. I immediately gravitate towards the keyword descriptive dotCOM. It instantly exudes trust & authority (even though we haven’t even visited the site yet). It seems to self-select itself.

These types of thoughts & feelings also impact whether a link is clicked within search engine results as well. But furthermore, those same thoughts & feelings are triggered when a cold-call is made and the founder is juggling whether to answer or not. Those thoughts and feelings are impacted when someone decides whether to approach a new vendor booth at a conference. Do you seem like an authority? Do they trust you at first glance?

[[We trust descriptive dotCOMs.. especially dotCOMs that represent a niche or category.]]

BINGO

That’s what I’m trying to introduce – that domains can be viewed as a trustworthy asset. A resource you can harness to develop a side-business as you hold down a full-time job.

I’m trying to introduce that domain names aren’t impossible to acquire – and that they provide built-in business opportunities.

By thinking of them this way, you put the cart before the horse. Acquire the domain name first, then create a business around it. Then utilize the tailwind that descriptive dotCOM domains provide.

And not harness it for nefarious reasons, but to wedge yourself into an industry, absorb its nuances, identify its pain points, and develop a remedy that’s baked within your cute little wittle dotCOM baby.

These types of domains aren’t impossible to acquire. You don’t have to have a business idea first. You can start with a domain, and then craft a hyper-specific product or service within your little piece of property.

Ok Peter – I’m intrigued. Here’s the prob: all the good domain names were snatched up years ago by these scumbag squatters.

Shhhhh shhhh. It’s ok. Sure, some domains were. And the buyers aren’t scumbags. If someone buys real estate dirt and won’t sell to you for pennies 10 years later, do you suck thumb and whine? Nah. Same deal here. While you were binge watching Walker, Texas Ranger in 1995, these folks were spending hours faxing through domain name orders & risking their own cash on a new thing called the Internet. They’re just investors, and smart ones at that.

And yes, you can approach them to purchase names they grabbed years ago, but that can get pricey.

Wanna know another place to get premium descriptive domain names, for a whole lot less?

During expiration.

Sa’wha?

EXPIRED DOMAINS

Yeah, so, every day, roughly 100,000 domain names expire. Those 100k were bought years ago, and folks either did something, or did nothing with them, then ultimately decided not to renew ’em another year. In these cases, domain name registrars (GoDaddy, Network Solutions, etc) will place them up for auction. (If no one bids, they simply get released into the general registration ‘pool’)

If this industry is somewhat appealing to you, that’s where your sniping arse can park – in the domain name auction universe.

You can sit there and study names that come across the board. You can run mini-business models in your mind. You can run instant gut-checks to see if a niche is one you’re interested in entering. And you’re simply gonna concentrate on generic word dotCOM domains that don’t infringe ANY trademark.

It’s a wonderfully fun position to be in – sorta like real-world Monopoly. Buying up online assets before someone else does. It hooked me 10 years ago, and I still haven’t shaken it.

Here – let me give you a few example domain auctions that I’ve participated in over the years (since 2006), just to show you the possibilities that pop-up when you’re paying attention. I’ll also throw in the business ideas that flew through my head. (note: I own none of these – although I did buy one – Ziplines.com – and subsequently sold it)

• ComputerCamp.com – Sold at auction for $15,500
  (Start a computer camp; create a directory/marketplace of computer camps)
• ShippingSupply.com – Sold at auction for $7,155
  (Sell shipping supplies [that’s exactly what this buyer did])
• KobeBeef.com – Sold at auction for $5,725
  (Become the leading kobe beef seller on the internet. Find the best supplier & partner with them)
• CameraBag.com – Sold at auction for $15,300
  (Curate & sell the absolute best camera bags in the industry. When you generate enough revenue, re-invest in the biz and design the best dang camera bag the world’s ever seen.)
• Pacifiers.com – Sold at auction for $5,600
  (Amazon-style site for hard-to-find pacifiers. Baby boutique website. Forum for new Moms. And on and on.)
• ZoysiaGrass.com – Sold at auction for $2,395
  (Same as above – partner with Zoysia grass distributor and sell a ton of Zoysia on the web)
• SouthernCookbook.com – Sold at auction for $354
  (Make a southern cookbook & sell it, c’mon. Fried okra. Grits. Vidalia onions)
• Ziplines.com – Sold at auction for $3,433
  (Sell a zipline kit for backyards; create a directory of zipline courses across world)
• CannedHam.com – Sold at auction for $129
  (Sell the heck out of some canned ham on the web. Sell your own or others)
• SexyBastard.com – Sold at auction for $61
  (This one wasn’t for business. My wife always calls me this. That isn’t true. She doesn’t. But I coulda bought this and forced her to send emails to me at [email protected]. That’s worth $61 in my book)

Those are just a few. Some of those names have clearly larger markets than others, which’ll impact your overall revenue. So that’s something to keep in mind as you window shop.

Your first name doesn’t have to be a homerun, either – a solid single or double generating $10k-$25k/yr in revenue is a killer start. And the fact that you don’t have to come up with ‘an idea’ removes a lot of pressure, as the domain typically guides you towards several avenues.

Ok, I’m following you now, Sweet Pete. But here’s another problem – I have no experience in these niches.

Please don’t call me Sweet Pete. Actually, you can if you want. I don’t care.

Secondly, IT DOESN’T MATTER IF YOU HAVE NO EXPERIENCE. Just become – or partner with – a subject matter expert after you purchase.

Read this story about Warren Royal of Bobbleheads.com:

http://www.huffingtonpost.com/2012/06/12/warren-royal-bobbleheadscom_n_1571356.html

From the article: “Royal bought the domain name for Bobbleheads.com at an auction, though his previous experience with the iconic toys consisted of him owning a few and thinking they were ‘cool’.”

In other words, he had zero experience producing and/or selling bobbleheads. Wasn’t born into bobblehead royalty. He didn’t wake up one morning with a bobblehead business epiphany. He was simply aware of the domain auction process. He also had a heavy dose of curiosity, was willing to learn a new industry, and he firmly understood the value of an exact match dotCOM. (And before you think there’s no money in Bobbleheads, he employs around 13 people at his headquarters near Atlanta these days, and continues to grow every year)

And what about coding? I’m a novice or have limited exposure …

You really don’t need coding experience – we can thank Matt Mullenweg for that. Push a button (literally) and a fully functioning WordPress-backed website is functional in a span of 10 seconds or so. Sure, basic coding skills are helpful – mainly HTML & CSS. Knowledge of search engine optimization is handy as well. If you aren’t exposed to those, get exposed to them. It ain’t that hard. I taught myself, and I’m a moron. Educational sites I’ve used before are Treehouse and/or Udemy. (not affiliate links, ftr).

If there’s one thing you’ve got, it’s TIME. You ain’t racing against someone else. There’s no deadline. Go as fast or slow as you want. Just make sure you’re moving, learning. Baby steps are all you need.

RECAP

So, we’ve covered a lot – let’s recap some stuff:

1. You wanna start a side business while holding down a full-time job.
2. Building a niche operation on a generic dotCOM is an amazing option to consider.
3. You can cherry-pick an interesting (& relatively affordable) domain name through the expiration process.
4. You don’t need to be an expert on a topic – you can learn to become one.
5. You really don’t need coding skills, but they’re helpful. HTML + CSS and SEO would be beneficial starting points.

Good stuff. All caught up.

If this is an avenue you’d like to consider, awesome, cause I love exposing folks to this trade.

But please understand, this’ll take some time & effort. Don’t pressure yourself to find one immediately. And like any business, it’ll require an upfront investment in order to acquire the domain. You can determine your own limits. The good thing is you’re holding down a job, so cut out some vices and divert that cash to a domain name. Try $5k as a starting number. Or less. Your call.

The next big step is combing through the 100k domains that expire every day. And creating a process to scan and filter so you don’t go cross-eyed.

I know. That’s a lot of domains. There are shortcuts, don’t worry. I’ll share my favorites in the next post [live now]. Until then, go sign up for a free domain auction account here, here, here, and here. (Namejet, Snapnames, Dropcatch, and Dynadot respectively). You can also sign up for GoDaddy Domain Auctions, but it ain’t free – costs around $5/year. Pheenix is another, but I can’t recommend them due to issues rewarding won domains.

This is the longest article I’ve ever written.

You don't really need a business idea. All you really need is a great domain name. The domain can be your business inspiration.

— Peter Askew (@searchbound) December 2, 2017

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UPDATE:
I’ve now written the follow-up.. link below:
https://www.deepsouthventures.com/window-shopping-expired-domain-names/

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And for the record, no outbound links on this site will ever be affiliate. I ain’t doing this for profit. I’m doing this cause other folks helped me along the way, and I simply wanna pay it forward. Sounds boring & cliche, but it’s true. Thanks again for reading.

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You’ll either step forward into growth, or step back into safety – Abraham Maslow

If you want to be a crappy little company forever dont buy a premium .Com domain brand.

— Mike Mann (@mikemanndotcom) September 5, 2016

Preach, Mike, Preach!

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