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In the last article on "Buying Domains" we discussed the importance of developing a good reputation in the domaining community. Domainers conduct business incredibly fast, often doing hundreds of thousands of dollar deals on the basis of an instant message "nod" and the persons reputation. If you get a bad reputation in this industry then you'll never do business in it again, so be careful.
 So what are some of the other questions that I ask myself when purchasing a domain name? After "Is the traffic going to continue?" the next most important would have to be, "Where is the traffic coming from?"
The where could relate to links as previously discussed in article 3 but it also can be what country. The country is very important because it will often indicate whether you can actually monetize the traffic. It can also suggest further "fraud" investigation work if the traffic is largely originating from a third world country or places like Turkey.
I really feel sorry for any legitimate Turkish domainers because like or not they are all tagged with the same brush of artificially inflating traffic numbers and increasing revenues via click fraud. If you're from Turkey, know some of these fraudsters and you're a good domainer then you need to report them as it will be the fastest way that I know of for you to be able to increase the value of your portfolio.
Let me provide an example of where I forgot to answer the "Where is the traffic coming from?" question. I'd purchased my first domain and it began to make money. Sure it was only about fifty cents per day but it was fifty cents more than yesterday. I was so cocky and confident that I didn't do a rigorous check on my second purchase. It turned out to be a Russian mp3 website and the traffic died after about 6 months. I ended up re-registering that name every year for about 3 years just to remind me to always ask the "Where is the traffic coming from?" question.
A few flags should have gone off in my head. The biggest one of which is "beware Russian mp3 traffic!" There's always another deal but it's really hard to get your cash back when it's gone. Thank goodness that it was only a few hundred dollars.
For any domains that I'm looking at buying from a complete stranger (which is not often) that are valued over a couple of thousand dollars I always ask to do a traffic test. I of course offer to pay for the test. A traffic test will often show up information on the domain that is not available by looking at the statistics alone.
For example, when I ask for the domain to be pointed to my own nameservers I can check the actual web logs for the domain to see if any repeat IP addresses are evident. I can easily see what country the traffic is coming from and also if the traffic is largely link based rather than type-in. All of this information is really valuable in making an informed purchasing decision and in assisting you in working out a potential return on your investment given a particular offer you may be contemplating.
In the next article I'm going to unpack Earnings Per Click, click through rate and parking companies.
Related Articles:
Domaining 101 - Part 1 - What's your business model?
Domaining 101 - Part 2 - Buying domains
Domaining 101 - Part 3 - Buying Traffic Domains
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