Need some tips on buying traffic domains with PPC income

[Jarmusch]

Hi all,

I'm considering parting with some of my savings to invest in type-in parked domains. I need to have some idea of what's a fair price to offer so that I can manage my budget correctly and start off in the right foot. So say, if I'm interested in buying a domain making $100.00 a month from type-in traffic, what's a reasonable number of months of projected income that I should offer to buy that domain for? 8 moths? 10 months? Or are we talking about years here? (2-3)

I also would like to know at over wich $$$ amount should I avoid using PayPal and move to an Escrow service.

Hope someone finds some time in their busy schedule to give me some guidance.

Thanks,
Jarmusch

 

[NameYourself]

I'm considering parting with some of my savings to invest in type-in parked domains. I need to have some idea of what's a fair price to offer so that I can manage my budget correctly and start off in the right foot. So say, if I'm interested in buying a domain making $100.00 a month from type-in traffic, what's a reasonable number of months of projected income that I should offer to buy that domain for? 8 moths? 10 months? Or are we talking about years here? (2-3)

Depends on the source of the traffic and the quality of the name.

Are you looking at a TM term? maybe 12-15 months.
Are you just looking at a typo? Maybe 2-3 years or so.
Are you looking at a true generic type-in name? In this case 2-3 years is a real bargain, Should be at least 4-5 years but probably more along the lines of 6-7 before anyone would want to sell these kind.

I also would like to know at over wich $$$ amount should I avoid using PayPal and move to an Escrow service.

My personal rule of thumb is anything over $500 I use escrow.

 

[DNjet]

It all depends on each domain itself , if it is a pure type-in domain , meaning it is spelled correctly and is .com and directly related to a service or product , then the domain may bring up to 5 years revenue. If its a typo in .com extension WITHOUT trademark issues then expect to pay around 2 years revenue, if its a typo with potential TM issues then expect to pay 1 year revenue, if its a linkpop domain (formerly developed) , then it depends on how good the links are , where they are located etc....but this traffic won't go on forever so you might be looking at maybe paying 1 year revenue there depending on how good the domain is, this is all just my opinion of course , good luck!

 

[Jarmusch]

Thank you for the input NameYourself and Searchsix. You both seem to agree that 5 years worth of income is a realistic value to expect from a true generic type-in domain. I wasn't aware it would take that long to get a return of investment. 5 years sure seems like an eternity in this fast paced business. :worried:

 

[Monsieur]

better time than with most offline investments

 

[NameYourself]

Thank you for the input NameYourself and Searchsix. You both seem to agree that 5 years worth of income is a realistic value to expect from a true generic type-in domain. I wasn't aware it would take that long to get a return of investment. 5 years sure seems like an eternity in this fast paced business. :worried:

If it's a true generic, it may payout every year for the rest of your life. There aren't very many investments out there that payout like this. Real estate is probably the closest example only it still requires maintenance. You may also receive exceptional offers over the course of that time as well. If you're confident in the name, go for it.

 

[mike031]

very few generic domains are selling for 5x, 10x or even 20x their income this days.... there is a certain formula to calculate this stuff but each domain is too unique to generalize...the name itself is worth way more. ie; developmental potential, branding, etc.

 

[dotNetKing]

If I ever stop acquiring new domains and don't have a better plan for making money, I don't think I would want to sell any non-TM generic-type domains for less than 10x the annual income.

At the moment I probably would sell for less than 10x income, as I could reinvest the sales money in more domains and make 20% plus in a year.

 

[dodo1]

It all depends on the quality and potential of the domain name. Low quality
domains may sell for less than one to two times their annual revenue, domains
of average quality usually sell for two to five times annual revenue and high
quality domains only sell for 5+ years of income. Many people have recognized
the great value of type-in and traffic domains, so it's quite difficult to acquire
new domains nowadays, because people want to keep their investment unless
they can sell it for much money. Bargains have become rare.