If you’ve ever visited auction sites like Sedo and Flippa and witnessed domain names, with or without websites, selling for hundreds of pounds, and sometimes hundreds of thousands of pounds, then you’ve probably been tempted to buy a few yourself… as alternative investments… then you wait and wait… and find yourself paying £10-20 apiece every year to keep your names active until someone with a big enough chequebook comes to buy them.

I’ve been there, done that, have the T-shirt… I also have almost 200 domain names that cost me £15 each every year to renew and some of which are contributing zilch to their upkeep.

Am I downhearted? No.

Why?

The truth about unregistered domain names:

Well, I know that previously unregistered domain names are being snapped up at the rate of hundreds of thousands a day, and the better ones are becoming quite rare… are growing in value daily and will soon exceed most business budgets. So before too long the average website owner and investor will have to content themselves with longer, less desirable domain names, the kind you and I probably have and which will also become steadily more valuable.

So, like many of our readers, I’m hanging on to my domain names to see how quickly they grow in value and until they repay their investment, and a bit extra, I’m forever seeking ways to maximise their value when time comes to sell.

And that is why today we are looking at selling domain names with and without their own websites, and checking how and why some amazing prices are paid for sometimes rather mundane-looking offerings.

Two main things to know about investing in domain names and websites:

i) For the most part, domains names on their own are valued for their word content and to help whatever website comes later to feature high in search engine returns. The ideal is to have a domain name that exactly matches terms people commonly search for online, and for a site to be built around that URL which provides good quality content for search engine customers.

So, for example, the URL www.bagssoldindurham.com (hopefully fictitious) should feature high in search engine returns every time someone keys “bags sold in Durham” into Google and rival companies.

When people key “get rid of dog fleas” into Google and Co., then www.getridofdogfleas.whateversuffix” with a host of great articles showing how to achieve that objective should also rank high in search engine returns.

ii) The longer a domain name and its website exist online, the more they’re likely to be worth, mainly because search engines like Google generally give preference to older sites over new ones in their search engine returns. The reasoning is if a domain name has been online for several years it’s likely to contain more valuable information than a domain registered a few weeks ago with its website still under construction.

And being ranked high in search engine returns is the main reason domains, and their respective sites, sometimes fetch unexpected high prices. So, properly done, the few pounds you spend on a domain name, the few days it takes to create a half decent website around that name, and the longer you hang on to both, the more money you should ultimately make for yourself when you sell them on auction sites, like Sedo and Flippa. Or on eBay of course!

If you’re sceptical, as I was until today, then go check out appraisal services designed to value existing sites, as well as offering tips for growing the value of a domain name, with or without a website attached.

Just as I did, for example, at www.urlappraisal.net, where I keyed in several of my own domain names, aged eight years or more, and found all valued $3,000 to $15,000 dollars. And some of those sites are tatty with heavily duplicated content, but still they’re valued much higher than they have or ever will cost me.

And because a non-techie like me can buy domain names and create websites with high profit potential, it’s time to reveal ways for you also to grow value in domain names you have lying around dormant.

First of all, let’s see how this valuation process works, regardless of whether there’s a website attached. Notice I’m not suggesting you go buy new domain names, although you can if you want to, I’m purely suggesting ideas for recouping your investment – and then some – from whatever domain names you already have.

These are the places to value your URLs (with or without their own websites):

– http://www.adminstool.com/domain-value

– http://www.mywebsitevalue.info/index.php

– http://www.urlappraisal.net

These sites valued one of my domain names at $3,330.00 (about £2,071.00), $2,270.00 (about £1,412.00) and $13,532.23 (about £8,417.00) respectively, so the domain name concerned must be worth at least £1,000, even at the lowest end of the valuation scale.

That site took about three days to create and it’s cost me about £120 in renewal fees so far. So there’s £700 or so I might realistically have made by holding on to domain name and site for a couple of years.

But that same site has also earned more than £1,500 in commissions since I joined Google’s AdSense program in 2004, roughly about £250 a year. And with proven moneymaking potential that’s another few thousand pounds my site is sure to be worth.

But as I said, the site is tatty, very unprofessional, and there are several things I can do to grow its value before time comes to sell it at auction.

Such as:

#1 – Improve the site’s Google Page Rank. Here’s a definition of Google Page Rank, being:

“A measure of the relative popularity of a site, ranging from a rank of zero (you have insufficient inbound links or are too new to have a rank) to a rank of 10 (which means you’re one of the dozen top sites on the entire network).” Source

As you see, Page Rank is normally determined according to number of links leading back to your site – hence “backlinks” – from other sites, preferably high Google page ranking sites themselves. So you grow your own page ranking by getting your site featured across the Internet, in as many places as possible, such as in articles on major article directories, in blog postings, in your eBay ‘About Me’ pages, in forums, and so on. Also try asking other webmasters to feature your site’s URL on their sites, while you do the same for theirs. That way, the more links you obtain, the higher your page should rank during Google’s next updating exercise, usually every three to six months.

#2 – Increase the site’s age! The older the site is, the more it’s likely to be worth, but of course there’s nothing you can do to make your site older than it really is. Unless you consider holding onto your domain names a few more years or you begin investing in soon-to-expire domain names with a long pedigree. Firms like Sedo and GoDaddy provide auctions for domain names due to expire soon, including older URLs. So your job is to look for domain names with a bit of age attached, then you add a site and wait for the value to grow even higher.

#3 – Improve the site’s ranking at Alexa.com. Alexa gives statistics relating to traffic levels to specific sites, including number of pages viewed and how long visitors typically remain at a site, and ranking high on Alexa can add significantly to resale values. By implication, the more people who visit, the more pages they access and the longer people spend at the site, the more important and interesting the site is judged to be, and the higher Google and their counterparts will place the site in search engine returns. So your job is to increase visitor numbers and get people to stay longer and study more pages at your site. You do that by adding interesting content to your site – articles and information – and by promoting your site on and off the Internet, in print publications, for example, or online through article directories, blog postings, and so on.

Let me give you a really useful tip for getting people to study more of your website pages and to stay longer at your site… you do it by writing or getting someone else to write a few long articles for your site each month, about 2,000 to 3,000 words each will do nicely, which you divide into five or six parts and create a separate web page for each part. At the top and bottom of every page, you create active clickable links to previous and future pages in the sequence. Make your links keyword-rich, with page titles rather than page numbers. The reason is words, not numbers, are likely to match whatever words people key into search engines and that will help your site rank higher in search engine returns.

#4 – Buy high value domain names in the first place… but remember value changes with time. As I said, I don’t want you – necessarily – to go buy new domain names, although you can if you like taking the odd risk and it doesn’t mean parting with the week’s housekeeping money. But put a little thought into what you are buying by focusing on currently the best domain names for investment potential, being those with high quality extensions such as .com, org, .net.

So domains ending in .com, .org and .net are likely to be worth more a few years from now than similar word combinations ending .info. or .mobi.

Additionally, the shorter the domain name the greater its ultimate value will be. But remember, fewer one and two-word, domains on the market is the reason we are now finding three and even four-word combinations fetching significant prices at auction.

Finally, the more closely words featured in the domain name match specific high frequency words keyed into search engines, again the more the domain should ultimately be worth.

#5 – Remember there’s still time for you to register world record price breaking domain names. Some people might disagree, but personally I think there’s still time to register domain names with high profit potential, for these main reasons:

– Soon, like their one word counterparts, most two and three-word domain names will already be registered, to actual end users and more likely domain-name investors. And that means four and five or even higher word combinations will become more popular and begin attracting higher prices at auction. So if you can find multiple-word domain names, preferably short words, you could find them returning your investment in just a few years.

– Some high price domain names will feature words that are new to the dictionary and as long as you’re not breaking copyright and trademark rules you should get in fast and register a top level domain – .com, .org, .net – for those words. Keep your ears open for unusual words coming into everyday speech, and once you know they’re likely to remain part of our language, go register them for yourself.

– Another idea: when you see a new blockbuster book or Hollywood film looming on the horizon, rush in to register its domain name on the best extension available. Again, avoid breaching copyright and trademark laws and you could end up selling your domain names fast to film companies and book publishers.

– You can cash in by studying word combinations achieving high prices for one extension, such as .com and then look for available domains featuring other extensions, preferably .org and .net. But be aware that before too long even today’s most undesirable extensions will be gone, and that means other extensions will come to the fore and begin attracting higher prices. So don’t discount buying .co.uk or other extensions for word combinations currently attracting high prices for .com and .org and other currently most popular extensions.

– You might check out high price multiple-word domain names and consider leaving one or two words in place and replacing others. As an example, last month carpetcompany.com fetched $16,500, so you could try replacing “carpet” with chair, or computer, or bag, or any other popular product and checking their availability as “chaircompany.com” and so on. Alternatively, leave the product in place and try replacing “company” to come up with “carpetfirm.com”, “carpetshop.com”, etc. Yes, you’ll probably find those specific combinations have already been taken, but not always, and whatever time you invest in finding suitable domains will almost always be worthwhile.

Even if you have to wait a couple of years!

Here are a few recent high price multiple-word domain names to get you thinking:

gamesforgirls.com – $500,000

socialmusic.com – $60,558

parkcityrealestate.com – $60,000

chinastock.com – $50,000

discountbags.com – $50,000

sketchbook.com – $50,000

mlkonline.com – $42,000

emailsignature.com – $25,000

teethgrindingcure.com – $25,200

carpetcompany.com – $16,500

computercrash.com – $15,000

gotocanada.com – £13,500

installprinter.com – $12,500