Do you want to start a domain name trading business online? If YES, here’s a complete guide on how to buy and sell domain names for profit with NO money / experience.
The names associated with a domain are valued highly in our present tech- centric universe. For instance, in 2009, a sale of 16 million dollars was made by insure.com to QuinStreet. This purchase set a world record then, but presently, longer domain names are acquired for much more.
Also inspiring is the number of future investors who are interested in acquiring domain names solely for profit making. Now consider the following:
- In November 2010, Clover Holdings Limited acquired the domain “com” for $13,000,000
- In September 2001, Hotels.com GP LLC acquired the domain name “com” for $11,000,000
- In March 2008, Gentile Philip acquired “com” for $9,999,950
- In May 2007, Moniker privacy services acquired “com” for $9,500,000
- In September 2010, Facebook acquired the domain name “com” for $8,500,000
- In May 2008, ATTN Diamond acquired “com” for $7,500,000
Those are the top six biggest public domain sales ever (as of the time of this writing). Those mouth-watering figures are enough to drive home the point that you can become stinking rich by selling just one domain name!
Table of Content
What is a Domain Name?
Names associated with domains are used in securing different IP address. Microsoft.com is one of the many IP addresses related to a domain. URLs use domain names especially in some pages on the web. Another important thing to note is that each domain comes with a suffix which is attached to the top level domain (TLD). The domains related to these are very scarce. Below are examples:
- edu – Educational institutions
- com – commercial business
- gov – Government agencies
- ca – Canada
- net – Network organizations
- org – Organizations (non profit)
- mil – Military
- th– Thailand
The internet is not based on domain names, but on IP addresses, the web server needs the Domain Name System (DNS) server in order to transmit IP addresses into domain names.
How to Buy Domain Names Profitably
It is not strange for resellers to acquire domain names in bulk in the domain name market. The reason behind this is the ease in acquiring such a huge investment. This will also require capital investment from the buyer. It is more beneficial for new investors to begin with a small number of reliable domains as this will help to increase their profile.
You have to note that a huge amount of time is usually spent in acquiring a reliable profile. One helpful factor is to invest in reliable and already established domain names. However, if you do not mind taking risks, you may try your luck by acquiring unpopular domain names.
The best decision may be to first buy already established domain names and keep a positive spirit that the investment will yield profit.
4 Types of Domains to Consider as a Beginner
- Timely Names
These are names created using a specific occasion. The 2014worldCup.com is a perfect example. This is because it applies to using a time factored occasion for the name.
- Business Names
This is meant for developing a universal name. Names regarding a profession, such as a Doctor or a Dentist are a good fit. Acquiring a geographical name in addition to the general Business Name may be a positive decision for a successful investment.
- Geographical Names
Names gotten from cities or countries are regarded as geographical names. New, exciting and fresh cities or countries are a very good investment choice. New customers will definitely emerge from these places. Community-based portals and designs will be useful to those in the community.
- Generic Names
This is regarded as a service or product. Advanced and developing products may be a huge investment if it is gotten quickly before it becomes rampant. However, you have to be very careful about getting muddled up in copyright or trademark problems. This is to prevent your recent investment from being suspended.
3 Places to Acquire Cheap Domains
The good news is that buying cheap domains are easy. For example, there are direct buys, auctions, expired domains, registering of recent domains, etc. In addition, there are sites such as GoDaddy.com, which guarantees options to negotiate domains.
Below are some listed examples with explanations:
- Buy Domains from Registrars
Domain registrar is a good place to acquire a domain name. When registering domains that are free and accessible, these are possible domain registrars for consideration:
- NameCheap (from $3.99 per domain)
2. Buy Domains at Online Auctions
Acquiring expired or deleted domain names is a very good choice when you are considering domain flipping. The reason is because the owners of these domain names consider them not useful. The domain registrars sell it to other buyers through auction. It is possible to get incredible deals through this auction process.
Listed below is the perfect place to get these auctioned domains:
- GoDaddy Auction
- SnapNames Auction
- NameJet Auction
- Pool Marketplace Domains
3. Acquiring Directly From Domain Owners
In situations where you are interested in a particular domain but it is not available on auction sites, do not fret for there is a possible solution. Simply contact the owner of the domain name and make an offer. This may not be welcomed by some owners, while others may not mind. Do the needful and make the offer.
The exciting discovery is that a large percentage of webmasters may not know what their domains cost and will voluntarily give it up for a fair price.
How to Sell Domain Names for Profit
a. Fix Your Price-: Do not forget to set a particular price for your domain name, especially in cases where the need to sell is not paramount. Many domain sellers adopt this approach.
b. Auction-: The best decision for a huge investment, especially when there are different interests in your domain, will be to release it for auction. This will help in generating huge income due to individual interest in the name.
c. Make an Offer-: In cases where the domain name is hollow, it may not give room for successful investment; therefore you may have to auction it as there is little or no useful advice needed in making sure it yields profit.
The Best Places to Sell Your Domain Names Fast
There are different places to sell your domains. To acquire the right value, you may have to sell at the right place. Listed below are the most popular places to gain market value when selling your domains:
- Brand Bucket
- Your personal website
- Hunting Moon
3 Major Risks in Buying and Selling Domain Names
Just like every other business, there are risks inherent when investing in domains. Legality, subjectivity and liquidity are major risks in buying and selling domain names for profit.
Another major area is incorrect appraisals or misunderstood payment structure. This can pose a very serious threat to the investment.
Also, bear in mind the possibility of losing. This is as a result of some domains not yielding the necessary profit and may sell for less than what is was acquired. Proper research is needed whenever you decide to purchase any domain.
You can count on reliable brokers to aid your transactions. Bonds and stocks are traded on fairly liquid markets, but trading in domain names is different. They may require a longer duration to sell, probably months or even years. This can be between the period you put it up for sale and when you see a committed buyer.
ii. Legal Necessities-: There are rules and regulations following the legalization of domain names. Also, it is impossible to ask a company to secure a domain name belonging to them, that will be regarded as stealing, which is considered illegal.
iii. Subjectivity-: Domain names have proven to be relatively subjective and problematic. This is opposed to stocks and bonds in which transactions follow a certain process and have successive investment rates.
Just like the normal day to day business, buying and selling of domains for profit making have its own pros and cons. There are particular business risks involved in getting a domain name. You need to calculate your profit and loss before investing.
Investing in acquiring domains is a good investment which has the capacity to bring you a lot of returns when it is properly carried out. So once you understand the possible difficulties associated with buying and selling domain names, it can fetch you a lot of profit.