Buy and Sell Domains for Profit – Is It a Viable Online Business

Unknown to many users, there’s a virtual activity that takes place on the internet daily. The nature of the trading is not the easiest to understand, but a small percentage of people have mastered and even make a good living out of it. In order to buy and sell domains for profit, you need to be aware of how the whole process works before putting all your feet into it.

How Money Is Made

Flipping domain, another term that is commonly used, is the process of buying domains at low prices and selling them for higher prices. The main reason for buying these domains is because they have commercial values for businesses to propagate in the online space.

On the other hand, the reason for selling could vary. Maybe a company/organization is no longer operating or maybe the domain isn’t being used for a very long time. Either way, an entrepreneur would see this as a trading opportunity. That’s why there are people who go around collecting attractive domain names and then resell them at astonishing prices.

How Much Can It Fetch

Many sell for hundreds, some for thousands and rarely, for five figures. Buying domains (from registrars) are easy, but selling them is clearly not as straightforward AND as lucrative as you hope. A lot of factors weigh into the pricing structure, on top of which, you also need to know how to attract the right buyer and when to sell.

What Makes a Domain Name Valuable

The first thing to understand here is that domain prices are perceived differently by different people. What you think as profitable, may not be the case in the actual market and what appears as ordinary names, could potentially sell for a lot of profit.

Unearthing the real values of domains is not always easy, but we can make a few educated guesses based on what has worked so far.

1. Selection of words – Domains after all, are a string of words and what you put into it matters. Generic, brandable and even alphanumeric words can be used, but they have to be relevant to niches that you’ve researched or familiar about. Those that sell fast are usually words that trigger interest.
2. Length and number – The shorter the words in the least amount generally cost more because they are easy to spell and remember. However, this opportunity can be rare nowadays, as the one or two-word combination are pretty much taken up and convincing the owners to sell them can be quite difficult. Find out more about how you can use Jaaxy keyword tool to easily brainstorm for new domain names.
3. Age of the domain – Naturally, the older the domains, the more valuable they are. If they run with well maintained websites, they are likely to rank better on the search engines and hence, more sought after by the buyers.
4. Domain extension – Anything within the top level domains can potentially fetch better prices than newer domain extensions. However, the .com, has proven to be the most favorable as it carries more commercial values.

Therefore, if you are able to get the formula right, you are this much closer to offering a  valuable domain instead of just simply buying one that is fancy looking. This will allow you to gauge the selling price based on its worth and put you in a better position to negotiate with potential buyers.  

Typically, there are two types of pricing options;

• Fixed price, whereby the selling price is already made final by the seller. Also known as  premium domains, they sell faster because the process doesn’t involve any haggling.
• Offers price is the price proposed by the buyers to the sellers. The selling price is what both parties agree after the negotiation.
• Auction price is when sellers wait for buyers to make offers during a period of time and then sell the domain to the highest bidder.

Here’s an interesting video that shows what type of domains have been sold in the past and how much profit they rake. Some of them will make your jaw drop 🙂

Ways To Sell Domains

Finding a valuable name is just one part of the battle won. The next step is to figure out how to sell these domains. Each method has its pros and cons so make sure you know the ins and outs before embarking onto the process.

1 – Park on Registrars

Parking is a term used for placing a domain temporarily on a landing page without associating to any website hosting and many registrars provide this service. Some buyers search for domains through the search engines and this could lead them to the landing pages if you’ve set them up.

That way, people will know if it is for sale or not. In addition, the page can be used to display advertisements, so that when it is clicked by users, ad revenues are generated.

Domain registrars like Namecheap and GoDaddy offer an easy way to park domains for free in return for a commission when a sale is made.

2 – Park on Marketplaces

The advantage of using marketplaces is to get more exposure. Often times, they also provide many in-house tools that can quickly set up the landing pages, get the domains listed for public viewing and secure payment (escrow) for transactions.  

However, like most marketplaces especially in the domain industry, you are entering a very competitive trading territory. Many people will sell for as high as they could, while buyers will seek for the best bargains.

Here’s a list of marketplaces to explore, most of which are free to use, but will charge varying commissions depending on how the domains are sold.    

• Flippa
• Sedo
• Afternic
• eBay
• BrandBucket
• Undeveloped
• SnapNames

3 – Park on Your Own Site

If you subscribed to hosting packages that provide generous amounts OR unlimited website hosting, then you can actually park those domains on personal webpages. This gives you full control of the content and maximize ad revenues if you choose to use them.

It does require a bit of work like setting up the webpage and tweaking some SEO features, but the cost of hosting is measly if you maximize the usage of the account. Find out how you can host up to 25 domains on this powerful WordPress hosting.

4 – Build a Website

As mentioned earlier, one way to really boost the value of a domain is to create a website around it. It’s similar to building a property on a land and resell it at a higher price. In this case, you will sell the domain AND the website portfolio along with it.

The only set back is that website building is time consuming and requires a lot of SEO work in order to achieve good rankings that affect the domain values. It’s definitely something that you want to take on as a team, instead of doing it alone.

5 – Engage a Domain Broker

If you prefer not to deal with all the troubles of listing and negotiating, engage a broker service to do the work for you. Let the professionals handle the necessary procedure and find the right buyer tailored to your expectations.

Just remember that you need to pay contract and commission fees upon successful deals.

How to Prepare Yourself as a Seller

Now that you get the big picture of what domain flipping is about, here’s a few more questions to ask yourself before investing in a domain.

• What’s your budget like? If you want to go out there and trade, you’ll need more than one domain so your assets could range between 10 to 100 of domains plus the annual renewal fees. Keep in mind that it will take time to sell them – some wait for months, some years and in worst case scenarios, some will never attract potential buyers. That’s cold hard fact number one.
• Are you familiar with niche markets and keyword research? If you don’t know what they are, then it’s time to open the books (or Google) and start learning about trends and industry behaviors that are happening around us every single day. Analyze what could change in consumerism in the months and years to come, locally and globally. Talk to experts if you must, to get better insights. All this information can point you to profitable niches and most importantly, the right domain names to use.
• Do a thorough research on the best practice to approach this form of online trading without overspending. Keep and open mind, but beware of self-proclaimed gurus and defaulters too.

So, Is Domain Flipping A Viable Business

It sure is, but it’s a learned skill, one that will require time, money and maybe a few costly mistakes along the way. The market is there and as long as the internet continues to expand for commercial purposes, there’s always opportunities to buy and sell domains for profit.

The success story that you read about someone selling a domain for thousands of dollars is all based on years of hard work. It’s not magic, but that doesn’t mean it’s impossible for you. Who knows what can be achieved with that talent of yours, right?

If you are still interested in this business model, you can test the water with a few domains and see how it goes. Here’s a good training platform to assist you in domain selection, understanding niches as well as keyword research. Give it a go and feel free to get in touch with me for more information.

Question – What’s your experience or opinions about flipping domains? Let us know in the comment section below.