It seems like anything can be flipped for money these days – properties, cars, digital pictures of apes – and believe it or not, the domain name market is alive and thriving.
This makes sense if you think about it; it’s much more valuable for your brand to have a .com web address than a .co.uk, for example, so the right domain name can be worth a lot of money.
But what is domain flipping, and how do you get started? Let’s take a tour through the world wide web of domain flipping, and find out.
What is Domain Flipping?
Most people are aware of domain names and how they work – they’re the web addresses that you type into your browser to visit a website. For example, Google’s domain name is google.com. Pretty simple, right?
When you get into the competitive world of business, it’s not quite so straightforward. Brands want their own unique domain name that’s short, snappy, and easy to remember. The problem is, most of the good ones have already been taken… and that’s where domain flipping comes in.
Domain flipping is the process of buying an existing domain name and then selling it for a profit. It’s a bit like property development, but for web addresses! And just like with properties, there can be a lot of money to be made – but also a lot of risks.
Like shares, some people buy domain names and hold on to them for years, waiting for the right buyer to come along. Others buy and sell domain names regularly, flipping them like hotcakes. It’s up to you how you approach it.
Domain flipping isn’t anything new; it’s been around since the early days of the internet (practically ancient) and people have been making a killing from it ever since. It’s only thanks to the recent eCommerce bloom that it’s become such a popular topic.
Why Do People Spend So Much Money on Domain Names?
Guess how much money a domain name is typically flipped for. Ten bucks? A neat hundred? Try millions.
Yes, that’s right – there have been some domain name sales that have made the news for their astronomical prices. In fact, the Voice.com domain name sold for a record-breaking $30 million in cash, making it one of the most expensive domain names ever sold.
So, why pay through-the-roof prices for a web address? The answer is simple: because it’s worth it.
Brandable domain names can boost a business through the roof. It’s the first thing that potential customers will see, and if it’s not memorable or easy to spell, they’re likely to click away and never come back.
A great domain name, on the other hand, will stay in people’s minds and be easy for them to type into their browser – meaning more traffic (and more customers) for your website.
When you think about it, a domain name is like a piece of property; it can be bought, sold, or leased. And just like with any other piece of property, the value of a domain name can fluctuate. The key to making money in domain flipping is to buy domains when they are undervalued and sell domains when they are overvalued.
Of course, it’s not always that simple. You need to have an eye for a good domain name, and you also need to be patient; sometimes it can take years to sell a domain name for a profit.
Why Pay the Big Bucks?
If a domain name is going to cost you in the thousands, hundreds of thousands, or even millions of dollars, what makes it worth the higher price? There are a few main reasons:
To build a stronger brand
After spending any amount of time on the internet, you’ll know that the most iconic companies have the simplest domain names. And that’s not a coincidence – these companies understand that a great domain name is essential for building a strong brand.
Why? Well… no one wants to type in a long and complicated web address (if they even remember you enough to attempt it), and no one wants to see a long and complicated web address that fills up half your business card.
Beyond that, a short and snappy business name is simply a rite of passage to becoming a business success. Want credibility? You’d better pay up!
To get more traffic
It might seem silly or presumptuous to say that your domain name has a direct impact on the amount of traffic your website gets, but here’s the thing: it seriously does.
Typing straight into the URL bar is a lot faster than going via Google, and if you’ve got a short and simple domain name – preferably the exact name of your business – then people are more likely to remember it and type it in next time they want to visit your website.
To improve search engine optimization (SEO)
Heard of keywords? They’re basically the words and phrases that people type into Google and other search engines when they’re looking for something.
If your domain name includes keywords relevant to your business, then you’re already ahead of the SEO game. That’s because Google puts more weight on keywords in domains than just about anywhere else.
Good SEO benefits your online presence, while a bad SEO value can pull you into obscurity. So if you want to rank higher in search results – and who doesn’t? – it’s worth shelling out for a valuable domain name.
To avoid cybersquatters
You might not have heard of cybersquatting, but it’s a real problem that lots of businesses face. Cybersquatters are people who buy up profitable domain names with the intention of selling them back to the rightful owner for a serious profit.
It’s not just businesses that are at risk, either; cybersquatters have also been known to swoop in and snatch up domains associated with famous people, events, or even entire countries!
Why Flip Domain Names?
So, you know where the demand for domains comes from – and it’s pretty easy to connect the dots from there. Here’s why people choose to flip domains:
💵To make a quick buck. And fair enough, too; if you manage to sell domains for even a few hundred dollars, that’s a serious return on investment.
✍️To build up a portfolio. Some people have a property portfolio, others have a stock portfolio… and some people have both, plus a domain portfolio on the side!
🤩Protect your brand. You might not be ready to launch your business just yet, but if you’ve got a great domain name in mind, it’s worth snatching it up before someone else does.
🤔To speculate. Like any investment, there’s always an element of speculation involved in domain investing. But if you choose your domains wisely, you could see some serious profits down the line.
How To Get Started With Domain Flipping
Domain flipping is one of those ‘passive income’ streams that actually comes close to being passive. All you really need to do is list the domain in directories and wait for someone to bite. Pretty sweet, huh?
If you’re so interested, let’s get down to the details. What do you need to do to get started flipping domains?
1. Find a Domain
A logical first step, you’ll need to find a domain to flip! There are a few things to keep in mind when you’re choosing a domain name:
🤔What are you buying it for? If it’s to protect your current (or future) company, you’ll of course be looking for a very specific domain name. If you’re just looking to make a quick buck, any old domain will do – so long as it’s short, sweet, catchy, and relevant to a current trend.
💸How much are you willing to pay? You can find domains for as little as a few dollars, but if you’re looking for something more high-end, you could be spending hundreds or even thousands. Top-level domains are a market unto themselves.
👍Is the domain available? Once you’ve found the perfect domain, you’ll need to check its domain availability. If it’s already taken, you could try to contact the owner and see if they’re willing to sell… but they might not be, so don’t get your hopes up too high.
👌What makes a good domain name? Remember that the domain you choose should be memorable, valuable, and preferably made credible through backlinks.
Selecting a domain name doesn’t need to be difficult; you can find domain names at directories like GoDaddy or Namecheap, and you can even visit domain auctions to snag one that someone else is giving up.
If there’s a domain you like that’s taken, you can also skip the struggle of haggling with the owner and instead leave it in the hands of a broker who’s better at negotiations.
2. Evaluate the Domain
Got your domain? Great – but you’re not ready to list it just yet. First, you need to evaluate it to make sure it’s actually worth flipping.
Here are a few factors you’ll want to consider when finding the perfect domain:
🧾The name. A domain with a short, memorable name is going to be worth more than a long, difficult-to-spell one. Single-word domains, like Voice.com and Cars.com, are often the most valuable.
⌛The age of the domain. Generally speaking, the older the domain, the more valuable it is. That being said, there are some exceptions; if a domain is associated with a negative event (like a scandal), it might not age so well.
💻The extension. Dot com domains are always in demand, but other domain extensions (like .io or .tv) can also be valuable, depending on the industry.
🔛The traffic. How much traffic is the domain getting? If it’s a popular site, that’s obviously a good sign. But even if it’s not, you might be able to increase its value by developing it into a functioning website.
🔦The backlinks. Does the domain have any backlinks or referral links? You can use a tool like Ahrefs to find out. If so, that’s another good sign – it means the domain is considered valuable by other people on the internet.
This kind of research can be time-consuming at first, but it’s totally necessary if you want to see a good sale down the line. Pick a domain name that stands out in all of the above areas for the best chance of success.
What is the Backlink Profile Worth?
Before we move on to step three, there’s one more thing we need to touch on: backlink profiles.
Every domain name has a backlink profile, which is basically a record of all the other websites that link to it. The more high-quality websites that link to yours, the better. See, Google (and other search engines) use backlinks as a ranking factor, so a domain with a good backlink profile will rank higher in search results.
Seriously; one of the top two factors taken into account by Google’s page ranking algorithm is links. And that means domains with good backlink profiles are more likely to be seen – and clicked on – by people who are looking for what you have to offer. Of course, these domains would rank even higher if they contain relevant content.
You also have the option to purchase aged or expired domains with great backlink profiles on websites like Odys.global. Brokers like this not only provide you a domain that gives you a headstart on the competition but also offer services to rebuild your website on such a domain.
3. Purchase the Domain
You’ve found the domain, and you’ve assessed it for value. Now it’s time to make the purchase. You can usually do this right from the registrar’s website.
To transfer the domain over to your name, all you’ll need is an account with the registrar. If you don’t have one already, it’s easy enough to create one; the best registrars are websites like GoDaddy, Bluehost, Namecheap, and even Google.
Then just follow the instructions on the registrar’s website; they’ll walk you through the process step by step.
It’s important to note that domains are usually registered for a year at a time. So when you’re making your purchase, you’ll need to specify how many years you want to register the domain for. We recommend registering for at least two years, but more is always better. This is because it protects you from having to renew the domain every year, which can be a hassle, and sometimes even expensive.
4. Develop the Domain
This step is pretty flexible. Some people spend hours populating their domain with an attractive website or blog; people who plan on using it as a local domain for their business, obviously spend a fair amount of time on this step.
But you don’t necessarily need to do that. You could just put up a simple “coming soon” page, or even a promotional page that features stats about the domain and encourages people to buy it from you.
Most people who flip domains do not even bother developing them, so this step could place you ahead of the curve.
5. Promote the Domain
If you’ve been lucky enough to score a domain that’s high in demand, then you can probably just sit back and wait for people to start making offers. But if you’re not so lucky, don’t rely on word of mouth alone; you’ll need to put in a little more effort to get noticed.
There are a few ways you can do this:
- List it on broker sites like GoDaddy Auctions, Sedo or Flippa
- List it on specialized Facebook groups
- Reach out to people who might be interested in the domain via email or social media
- Advertise through Google Adwords or another form of online advertising
Once you’ve started getting some interest, it’s time to start negotiating.
6. Negotiate and Sell the Domain
You might have a few offers coming in straight away after you purchase your domain – but wait! That doesn’t mean you need to accept the first offer that comes your way. In fact, you should try to negotiate for a higher price.
Here are a few ways to find your ideal buyer:
It might seem strange, but there are indeed entire auction websites dedicated to domains. Sites like Flippa and GoDaddy Auctions are great places to start, but there are many others too; and hey! Why not try them all?
The reason auctions are so great is that they put the power in your hands. You get to set a reserve price (the minimum amount you’re willing to accept for the domain) and then people can start bidding. If the bids don’t meet your reserve, then you don’t have to sell; but if they do, then you’ve got a deal!
Forget the Saturday fruit markets; the real action is in the domain aftermarket! (Well, not really. They’re pretty boring unless you’re into that sort of thing. But they are a great place to sell your domains.)
The way it works is simple: you list your domain on an aftermarket website, set your price, and wait for someone to buy it. This method is particularly lucrative if you’ve got not one, but a whole portfolio of domains to sell. You can make aftermarket sales on websites like Sedo.com, or crowdsourcing marketplaces and forums like Squadhelp.com and NamePros.com.
This is probably the most common way to sell domains, and it’s also the easiest. You simply find a buyer who’s interested in your domain, agree on a price, and then transfer the domain to their name.
The great thing about private sales is that you can set your own price, communicate on your own terms, and you don’t have to share any of the profits with anyone else.
Of course, the downside is that it can be tough to find buyers for your domains; but if you’ve done your marketing right, then you shouldn’t have too much trouble.
7. Make the Sale
Let’s get to the good part, shall we? It’s time for the sale!
But of course, there are hurdles involved; scammers are everywhere, and you need to be careful about who you’re doing domain flipping business with.
Escrow service is a great way to ensure safety for both the buyer and the seller; we recommend using one of these services when selling a domain name. It works like this:
- The buyer contacts the seller (you) and expresses interest in purchasing the domain.
- The buyer and seller agree on a price, and the buyer pays the agreed amount into an escrow account.
- The seller then transfers the domain to the buyer’s domain registrar.
- Once the domain has been transferred, the buyer receives the domain and the escrow service releases the funds to the seller.
And that’s it! Of course, there are variations in this process (such as using a broker instead of an escrow service), but this is a general idea.
What are the Risks of Domain Flipping?
Speaking of scams, those aren’t the only risks to watch out for when domain flipping. Every business venture comes packaged with its own lovely set of risks; domain flipping is certainly no exception.
Some of the risks you need to watch out for include:
- The domain you’re interested in might not actually be valuable. Of course, this is one of the lesser risks since you can assess the value of a domain pretty easily. But it’s still something to keep in mind.
- You might not be able to find a buyer for your domain, even if it is valuable. This is more of a risk if you’re relying on private sales, but it can happen with other methods as well.
- The value might drop suddenly after you’ve purchased the domain. But that’s investing, right? Gotta play to win!
- The domain you’re flipping might infringe on someone’s trademark. If that happens, you could be sued; and even if you win, the legal fees would probably eat up any profits you made from the sale.
Something else to look out for once you’ve owned a domain for a while are the people who sit on the sidelines, waiting for your domain registration to run out. We mentioned them earlier – they’re called domain squatters, and they might try to extort you for the domain once it’s up for grabs again. This is known as ‘domain catching’.
Of course, these risks are mostly manageable with a bit of common sense and due diligence. As long as you’re careful about what domains you purchase and take steps to protect yourself, you should be able to avoid most of the risks associated with domain flipping.
How to Maximize Your Earnings
When you get it right, domain flipping truly has the potential to be a lucrative endeavor. But like any business venture, there are certain things you can do to increase your chances of success. Here are a few tips:
Evaluate, research, and evaluate some more
We really can’t overstate this – research your domain before paying the big bucks! Make sure it has commercial value and that there’s actually a market for it. Or else… you’ll quickly find yourself in the red.
Don’t get too attached to your domains
It’s easy to get emotionally attached to a domain, especially if it’s something you came up with yourself. But at the end of the day, it’s just a business transaction; and if someone offers you a good price for it, you should sell. (Unless it’s your business, of course, in which case you might want to hold on to it for a little while longer.)
Keep an eye on the market
The domain-flipping industry is always changing, so it’s important to stay up-to-date on the latest trends. If you’re not sure where to start, there are plenty of blogs and forums out there that can help you stay in the loop.
Resist the overspend
It’s easy to get swept up in the excitement of domain flipping and spend more money than you intended. But resist the urge! Remember, this is a business. So be smart about your spending, and don’t overdo it.
Have a solid plan in place
Make sure you have a solid plan in place before you start buying domains. Decide how much you’re willing to spend, what types of domains you’re interested in, and how you’ll go about selling them. Having a plan will help keep you focused and increase your chances of success.
Check for blacklisting
Yes, it’s true – domains can get blacklisted. It’s probably a good thing, too, since websites can play host to all sorts of unsavory content. But it’s something to keep in mind when domain flipping, since a blacklisted domain will be much harder to sell. Always remember to check the domain history.
Domain flipping is not a get-rich-quick scheme; it takes time, effort, and patience to succeed. So don’t get discouraged if you don’t see results right away. Just keep at it, and eventually you’ll start to see some profits rolling in.
In Summary: Are Domains a Good Investment?
Over the course of this article, we’ve discussed a few important things to keep in mind if you’re thinking about domain flipping. And while it’s certainly not a guaranteed path to easy money, it’s a pretty darned good way to make some extra cash – if you do it right.
Here’s a more accurate way to put it: valuable domains are a good investment. Short and sweet domains are a great investment. Long, convoluted strings of letters and numbers? Not so much.
Of course, it’s not always easy to tell which domains will be valuable and which ones won’t. But if you do your research, stay up-to-date on industry trends, and resist the urge to overspend, you’ll be well on your way to domain-flipping success.
We hope you enjoyed these domain name tips and tricks! Check out our domain name generator to make your own.