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I am ranked about 10th on more general keywords
Ex "Bait Shop Some City Some Town" "Bait Shops Nowhereville"
I have purchased the domain names "BaitSomeCitySomeTown.com" and "BaitShopsNowhereville.com"
They are currently using 301 redirects to bobssuperbaitshop.#*$!.
I have not submitted these new 301 redirect domains to google.
My rank has not increased for these other keywords yet.
Would it be better to develop these new domains into a single page site with a link to bobssuperbaitshop.#*$!?
"Keyword rich domains" probably don't have a lot of value in and of themselves anymore. All things being equal (age, relevance, inbounds, etc.) a keyword rich domain "might" get the nod.
If you have the time and resources, developing each domain into a decent site linking to your main site would probably be the best strategy. For myself, I find improving a single site to be a better use of time and resources, but your mileage may vary.
then make sure there is VERY prominent linkage to your main site to make sure the conversion rate to your main site is kept high
The vast majority of people who take that path end up spending more time working to get that traffic (and those sales) to their site than if they just spent the time on their own site to make it rank for the keywords included in the new domain names. I mean, if you can't get your main site to rank for "bait shop city town" or "bait shop town" it's likely your time and money would be more wisely spent picking up some SEO knowledge. Do yourself a favor: forget about those domain names you just bought and let their registration lapse when they come up for renewal next year.