Some of you may have heard of domain flipping. Domain flipping was once a crazily lucrative way to make money, especially in the early age of the internet (the Late 90s to early 2000) and there have been huge jackpots that broke out pretty some times since then.
- Insure.com was sold for $16 million
- 360.com went for $17 million
- Insurance.com was turned over to a whopping $35.6 million
Domain flipping is the process of buying a domain name for a low price and then reselling it for a higher price for profit. In fact, the domain name market can be volatile in 2022, but it “is” still possible to make money online with domain flipping.
Just the things are that you would have to know how it works and what contributes to your successful domain flipping business. You would have to go through some learning curves at first. Most importantly, estimating the right price gap for profit is the first and foremost thing you must make sure of.
How to estimate the value of a domain name
Domain purchase is not as easy as just snapping random names and hoping they all go up. In short, there is a subtle art, as well as a bit of science behind the madness.
Seasoned domain flippers put a lot of thought and mechanism into their purchase decisions. And these are the basics that may contribute to the price labeled on a domain.
Domain Extension
The domain name extension is one of the most crucial factors to determine the price of a domain.
The most valuable one among hundreds of different domain extensions is the.COM top-level domain. (TLD) .Com-based domain names are most popular for domain buyers and it makes them sell easier and at a higher price than all the other TLD types.
Besides, the.COM extension, several other TLDs can be highly valued, such as. IO, ORG, CO. The.IO extension is especially popular for software or tech startups to offer their software services based on.
The length of the name
Although ThisSpaceForSale.com may sound like a good idea for a domain name, the rule of thumb in the game is that a shorter domain is considered highly valuable.
For instance, Voice.com which was sold for $ 30 million in 2019 is a one-word domain and it was expected to hit an amazing price spot anywhere near it.
The composition of the domain name
Similar in concept to the length of the name, as spoken above, having a domain name that does not include a hyphen(s) or numeric values can lead to a more successful domain sale.
The domains that are not neatly named, for example, sales1293.com or 28domain77.com, or make-money-online.com, are often considered spammy domains. In fact, such domain types aren’t attractive options for serious businesses unless they buy them for spam activities based on, or building a PBN network which is a black hat marketing practice.
Niche In Mind
In addition to how catchy the domain name sounds, one more thing to gear your consideration toward is “how the sound of the domain name indicates the area of its service.
Many business owners want their domain name to represent what they do /offer so that the attention of their potential customers will be easily drawn to the business website.
It’s a great strategy to take a specific niche into account and focus on it for your domain inventory. For example, Finance, Marketing, IT, Automobiles and there are plenty of fields you can specialize in, to laser-target a specific prospect group.
As for choosing a niche, you will have an additional boon when you target an area that you know well about or are experienced enough with all INs and OUTs. That definitely helps you.
SEO (Search Engine Optimization) Metrics
If you are buying expired domains or second-hand domains, the previous estimation of the domain matters.
Investors often consider its SEO metrics such as the backlink profile, inbound traffic, Google index status, topical vertical, and domain authority that have been previously established.
It’s safe to examine the domain status from the aspect of SEO before your purchase. Indeed, you would regret jumping to purchasing one that is banned by Google. Needless to say, it’s almost a zero value then.
Brandable Name ( e.g. Pizzazz, or Nike)
A domain name that sounds catchy, or fun always draws the attention of the crowd. Not only that, actually a cleverly named brandable domain can be as valued as multi-million dollars when it’s sold to the right business that desperately needs the name.
Below are some high records of brandable domain name sales:
- tesla.com was sold for $11,000,000 in December 6, 2018
- youxi.com was sold for $2,430,000 in March 12, 2014
- vivo.com was sold for $2,100,000 in September 2, 2016
High valued brandable domains have one, or multiple common traits as below:
- Short and no longer than 6 letters in its name
- Creatively made-up name and not necessarily based on existing words (e.g. Grammar”LY” or Tumblr)
- Memorable and unique
- Fun unlike the boring sounds of descriptive domain names
- Or having a catchy rhyme
It isn’t a Make-Money-Quick scheme
I don’t doubt that there are people out there who succeed to make a substantial profit from domain flipping. But if you think of this as your way to make a ton of money overnight by the inspiration of the mega sales of domain names in history, it’s a very unrealistic thing to happen.
Hitting the jackpot of a multi-million-dollar sale isn’t a thing to happens every day. It’s more like lifetime luck that unlikely comes during your life like winning the lottery. But what will only work is your attractive domain portfolio with a batch of niche-focused or industry-targetted great brandable names and go steady pace over time without rushing into a high ticket sale.
Warming Up For Domain Flipping
For buying and selling domain names, there are many good domain marketplaces on the internet. Likely, to everyone, GoDaddy would be the one that pops out the first. Godaddy is a great place to do the domain flipping business where you can not only trade in domain names but also park ones until they are sold to somebody.
Domain flipping business is a repetitive process and things are done based on this simple cycle — buy-park-sell.
These are the step-by-step process below.
1. How to buy domain names
To buy a domain name, 2 different ways are broken down:
- Register a brand new domain – Cost Estimation: $10 – less than $50 per one depending on TLD
- Buy a used domain – Cost Estimation: $10 – unlimited prices depending on the value of a domain and the sale prices of domain sellers.
It could be phenomenal if you can achieve as many wonderful domain names as you wish through the new registration. But in reality, the chances are extremely slim since the most of good domains are already taken up.
Alternatively, the other way you can turn around to buy a good domain name is by buying a used domain. Most likely from a domain marketplace.
Certainly, it needs your effort and time to invest to find profitable domains to buy. As in, there are always chances to get underestimated domains in price if you are persistently in search for them.
2. How to sell domain names
Similarly, where you can sell domains can be where you bought your domains. It’s because it’s a flipping business with the same items, but with different price tags on it.
But, to break down the ways to sell domains a bit further, it can be as follows:
- Direct Approach: Fees can be saved (about 20% of the domain price), yet your own hard work on promotion is needed to find a prospect and close a deal.
- Domain Marketplaces: Traffic and sales exposure to prospects are guaranteed, but you can’t avoid paying the fee of a high portion based on the sale price.
Just like when you sell your used car, domain names can be sold directly to somebody that wants it. For that, you have to have your own sales channels (e.g. your website, forums or social media, etc) to accelerate your promotion.
If you succeed to sell a domain in your direct approach, it’s a great way to cut all the service fees collected by the 3rd party domain marketplace.
Despite that, domain marketplaces ensure some great benefits to sellers on the other hand, like easier exposure to potential buyers and the automated domain transfer process done by the system.
Certainly, there are pros and cons. And it’s wise to make use of the benefits of each side based on your circumstances.
Top 5 Domain Marketplaces To Buy and Sell Domains
Whilst you can explore your way into a more variety, there are several big names here in terms of buy-sell domains. They are picked out on the list considering their marketplace reliability and brand reputation.
1. GoDaddy
It’s needless to say Godaddy is notably at the top-notch in the domain marketplace industry. Most likely, you couldn’t live without GoDaddy while you’re doing the domain business. It’s the broadest and hugest marketplace for buying and selling domains. Godaddy has its sister site that services the same thing — called “Afternic”.
2. Flippa
It’s another big name as famous as GoDaddy. In Flippa, you can even buy and sell websites, blogs, and other types of digital properties as well as domain names.
3. Domain.Com
Domain.com has been founded in 1999, been around for over 2 decades. It’s famous for the cream of the crop – amazingly high-end domains you can discover, that are greatly profitable. It’s a favorite digital hangout for hungry domain-hunters watching out for a chance to capture fantastic domains.
4. Sedo
Sedo is one of the largest marketplaces for domains. They offer a strong domain search function and filters. The idea of suggesting all the domains containing relevant and target keywords is why a lot of domain-hunters love Sedo; this makes their job tremendously easier to find their target domains.
5. NameCheap
Last but not least, we can’t talk about domain registrars and marketplaces without mentioning NameCheap. NameCheap is a great place to buy and sell domain names, boasting its huge market capacity.
What’s great about NameCheap especially is their wide range of domain prices for those who aren’t very budget-free. Their easy-to-use interface and domain search functionality are another huge plus to find great domain deals for domain dealers.
Conclusion
Domain flipping for profit can be done by anyone who wants to try it out. It can sound tricky and like a few work jargons that might sound difficult for you; not really. It’s all about buying cheap and selling high just like merchandise reselling. But only the difference is it’s done in the digital landscape and that is all.
In this article, I tried to instill the most basic guidelines in the domain flipping business and how to buy and sell domains for profit. By learning the key takeaways, it wouldn’t be too difficult for you to get started venturing out on your journey in the business.
