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We all know about registering domains, but have you ever thought of buying an existing one from someone else, and then selling it to someone else?
Domain flipping is like flipping a house without renovating it. You buy the domain, put it up for sale, and then sell it for more than you paid.
Last year, the domain voice.com sold for $30 million, while others have sold for well over $5 million: CarInsurance.com went for nearly $50 million, VacationRentals.com for $35 million, and Internet.com for $18 million. The most expensive domain value ever is cars.com, valued by the U.S. government at a whopping $872,320,000. That’s nearly $900 million. Impressive.
Domain flipping is risky and is equivalent to trading on the stock market. It’s rare to find that gem of a domain for $10 that resells for millions of dollars. Realistically, you’ll probably buy one for hundreds of dollars and resell it for thousands or tens of thousands of dollars. Do it enough times, and you’ll create a business that brings in enough revenue to live on.
Here’s how newbie domain flippers can get involved and earn money off of buying and selling domains.
What’s a Domain Name?
Before diving into the details of flipping, let’s start at the very beginning. A domain, or domain name, is the name of a website, and they have an extension like .com, .net, or something else. For example, this website’s domain is dotcomonly.com, while for Google, it’s google.com.
There are a variety of domain extensions available today, including .com, .net, .tv, .info, and more. Based on your extension, a domain name falls into one of three categories:
- Top-level domain names (TLDs): These names are considered to be at the top of the domain structure, or layout, of domains which includes HTTP and the domain name. Examples include .com., net., .info. and newer ones like .pizza or .technology.
- Country code top-level domain names (ccTLD): These are country-specific domains that use a country code in the extension. Typically, they can only be purchased by residents of a country or companies with locations in those countries. Examples include, .ca for Canada, .co.uk for the United Kingdom, and .jp for Japan
- Sponsored top-level domain names (sTLDs): These are specialized domain extensions sponsored by specific communities. Examples include .gc.ca for the Canadian federal government, .gov for the U.S. federal government, and .edu for educational institutions.
Is a Domain the Same as a Website?
In a word, no. A website has content, traffic, and often, revenue. They’re hosted on a web host and are searchable and visitable online. When you buy and sell a website, the domain is worth less than the rest of the site. You’re buying it for the content, traffic, revenue, history, reputation, and growth opportunities.
That’s what Neil Patel did a few years ago when he bought KissMetrics.com and Ubersuggest.com. He bought KissMetrics for the traffic and Ubersuggest for the tool and traffic. With a few tweaks to the content and integration with his site, both purchases increased the number of qualified leads to his consulting business by over 50%.
When you buy a domain, you’re purchasing Kissmetrics.com and not the content from the website (to use the previous example.)
Is Domain Flipping Risky?
Some people make a living buying and selling domains. However, they do it because they’re willing to accept the risks. Like those that play the stock market, they’re hoping to buy low and sell high. You might be enticed by selling a domain for millions, but those are the exceptions. Most domains that change hands go for significantly smaller sums, so don’t expect to make your fortune off a single purchase and sale.
That’s why it’s essential to have the right mindset about domain flipping. Start slowly by purchasing cheap, high-potential domains and selling them for modest gains first. You’ll gain experience, learn what to look for, and decide when to take a bigger plunge.
Okay, now that you know what domain names are, how they’re different from websites, and the risk involved, it’s time to look at the steps you can take to start flipping domains.
Getting Started with Domain Flipping (Checklist)
Here’s a checklist on how to get started with buying and selling domains today.
1. Decide on Your Starting Budget
Many domain flipping experts advise starting with $500 as a budget, but you should only start with what you’re comfortable losing. As you gain experience and industry expertise and get some sales under your belt, you’ll want to start slowly and grow from there.
2. Learn to Valuate Domain Names
Learning whether a domain is under or overvalued is a crucial skill to develop to flip domains. Otherwise, you’ll never make any money.
To learn the skill of calculating domain name values, look at a website like NameBio. They have a database of more than 800,000 historical domain sales you should study. Filter the list by price range, keywords, and more to get a sense of what domains are sold for. Sift through this list regularly, and you’ll develop a valuation instinct you can use going forward.
Flippa’s Recently Sold search tool and GoDaddy’s GoValue tool are two other useful ways to develop your valuation skills. Practice with these tools before you make your first purchase, and you’ll give yourself a good foundation for domain name flipping.
3. Find Good Domain Names
Researching and finding good domain names to buy is the longest part of the domain flipping process. For good reason. You want to spend as much time as you need to thoroughly investigate a domain before you buy so you know whether it’s worth it, and then decide what to buy it for. There are many different approaches and strategies for this, so here are a few general guidelines to keep in mind:
- Domain length: Generally speaking, value increases as the length decreases. So, the shorter the domain, the more it’ll cost. Even a single character can affect it, as a 3-character domain will cost significantly more than a 4-character one. Yet the difference between a 7- and 8- character domain is relatively small.
- Ease of use: This refers to whether the domain is a dictionary word, is easy to say or type, is memorable, or brandable. If the domain ranks high in any of these categories, it’ll be expensive to buy.
- History: A second-hand or expired domain is more valuable than a new one because of its history. It has good traffic and SEO metrics, which increases its value.
- Domain extension: The extension plays a significant role in a domain’s value. The highest valued ones are .com, followed by .net, and .org. Buyers will want the .com of any domain name because of the instant recognition and familiarity with internet users. With over 1,000 extensions available right now and more being added all the time, keep an eye out for those that might get hot. Some are becoming more familiar with users and may increase in value as time passes.
Four Ways to Find Good Domain Names
To find valuable domain names to buy, you could:
- Browse domains currently up for sale on domain marketplaces and directories like Sedo, Flippa, and NameBio. These are a combination of expired, dropped, or newly registered domains, so be sure to filter through them appropriately.
- Look for expired or dropped domains on websites like ExpiredDomains.net and JustDropped.com. An expired domain could be valuable because of its age and history, but they’re not always the bargain you might think they are. You may get into a bidding war on an expired domain auction site and overpay. You may also not realize the full history of the domain and end up with one with a criminal or unsavory past that will turn off future buyers.
- Analyze market trends and search queries to find potential domains that are likely to increase in value.
- Search out local domain names as they have high value for local businesses, such as [yourcity]pizzeria.com or [neighborhood name]bookstore.com.
Warning: Stay away from domains with brand names in them, even if they’re available. Not all brands have registered all domain extensions available to them, so they won’t want to buy it from you. Worse, you could get into legal trouble due to trademarks and other legal issues.
If you’re not sure about a domain name, check out the U.S. Patent and Trademark Office website to verify you haven’t stumbled across something that’s already taken.
4. In-Depth Research on Your Targeted Domains
Once you’ve identified target domains, it’s time to do your due diligence on them. You’ll want to:
- Check the domain’s backlink profile: Look at the backlinks for the domain to see where they come from. Many websites use shady SEO tactics for backlinks, which could affect the value and your ability to resell the domain. Use a tool like Ahrefs or SEMRush to investigate whether the backlinks are legit or not.
- Check email spam databases: Look for the domain in spam blocklist databases to see if the domain was used by spammers or spambots. Try tools like the Spamhaus Block List, Spamcop, MXToolBox, and SURBL.
- Review older versions of the website: Reviewing previous versions of your domain show you whether it was an active website or just a parked domain. It can give you an idea of potential buyers and also signal if it was used for anything criminal in the past. Options include the Wayback Machine, UKWA for U.K.-based domains, and TimeTravel.
- Review the Domain Authority (DA) and Page Authority (PA) of the domain: While DA and PA might be older metrics that don’t play as big a role in today’s SEO, they are a good indicator of a domain’s history. They’re a good indication of how the domain was ranked by search engines, which can affect the valuation.
5. Prepare to Buy the Domain
Once you’ve found a good domain, it’s time to get ready to buy it. You can purchase new domains from your favorite registrar and an expired one from an auction or other marketplace like Sedo, GreatDomains, and Bido.
Some registrars also sell expired or dropped domains, so be sure to check out your favorite one to see if you can. Typically, you’d enter the name of the expired domain into your favorite registrar’s site, and it’ll tell you if it’s available for purchase.
6. Buy and Transfer the Domain
If the domain is new, you can skip this step. If you’ve purchased a previously registered domain, you’ll need to transfer it to your preferred registrar. Popular registrars include GoDaddy, Namecheap, and Domain.com. There will be a fee to transfer the domain to your registrar, but it’s usually cost-effective no matter which registrar you use.
7. Post-Sale Set Up for Your Domain
Once you’ve transferred the domain, there are a few more things to do to ensure others know the domain is for sale.
- Custom landing page: Set up a custom landing page advertising that the domain is for sale. This custom page accomplishes two things for you: it’s more attractive than a simple parking page, can increase conversions, and allows you to receive direct offers for the domain, saving you any fees you’d pay if it were sold through an auction site.
- Redirection: If you put the domain up for sale on a marketplace or auction site, you can set up a redirection on the domain. Drive users directly to the listing and maximize its visibility.
- Parking: You could put up a generic parking page that most registrars make available. Domain parking sets up automated advertising on the domain to earn money every time someone views or clicks on an ad. It’s especially helpful if it’s an expired domain that already had some traffic to it.
- Publish Whois: You want to be reachable when you’ve got a domain for sale. Consider making your domain’s whois information public instead of private, so that buyers can find you with a quick whois search.
Now that you’re all set keep reading to see what you have to do once your domain is sold.
8. Selling Your Domain
Ideally, you’ll sell your domain quickly after buying it, but in reality, you’ll probably hold onto it for a while. And that’s perfectly normal. If you’ve done your research well, you’ve got a domain that someone else will want to buy.
Just like anything else for sale, a little marketing of your domain can go a long way. Here are a few common approaches you can take to market your domain and increase your chances of selling.
- Reach out to buyers directly: If your domain applies to a specific industry, location, or trend, you could try reaching out to someone in those areas to see if they’d be interested in your domain.
- Simplify the inquiry process: As mentioned earlier, make it easy for potential buyers to find you by publishing your contact information on the website and making your whois profile public. Anything that simplifies the inquiry process could be beneficial to you as it encourages direct offers.
- List it on domain marketplaces: This is the most common route to selling domains. Look at each site’s policies and fees before signing up, as you may be in for a rude surprise when you sell. Some marketplaces take flat fees, while others have a sliding scale based on the purchase price.
Many domain owners (or domainers, as they’re also known) are patient. They know it might take years for their domains to increase in value, so be ready to wait before selling.
We hope you enjoyed this lesson on how to buy and sell domains online. Domain flipping can be an exciting and lucrative business to get into, whether it’s a full-time job or a side hustle. Follow these instructions to get started and create a domain investment portfolio that grows and changes over time.