Domain flipping can generate substantial income through purchasing inexpensive domains and reselling them for high profits. An example of this is the purchase of business.com for $7.5 million in 1999, which was later sold for $350 million after 8 years. Whether pursued as a primary source of income or as a secondary venture, domain flipping offers the potential to earn thousands or even millions of dollars online.
Beginners are likely to be unfamiliar with domain valuation and domain investing, but to succeed in the domain flipping industry, you must develop an understanding of these concepts.
Domain Flipping
The act of buying and selling domain names for a profit is known as domain flipping. This process includes conducting research to find affordable domain names, purchasing them, and later reselling them at a higher price. The objective is to recognize domain names that have considerable value and offer them to buyers who require them.
Types of Domains Are Best for Flipping
Regrettably, there is currently no magical formula available that can guarantee you a perfect domain for flipping. However, there are certain types of domains that have a higher likelihood of selling well compared to others. Therefore, it is advisable to be vigilant for the following types of domain names when searching for ones to flip.
Expired Domains
Expired domains are currently not being used by their owners and are available for purchase. What makes them appealing is a number of factors.
- They are cheaper than other domains out there.
- They already have some DA or PA.
- They come with their own traffic (since they were used at one point or another).
It goes without saying that expired names are extremely popular among domain flippers.
However, before purchasing an expired domain that you believe has potential, it is essential to thoroughly examine its history, ranking, backlinks, traffic, and other significant factors. This is crucial because the domain’s expiration may be attributed to reasons such as illegal activities or being blacklisted by search engines for spamming.
If you’re searching for expired domain names that you can potentially sell at a profit, the NameSilo Marketplace is an excellent place to begin. You’ll have access to ongoing auctions where you can easily place bids on the names that catch your attention.
Short Domains
If you are knowledgeable about purchasing and/or selling domain names, you may be aware that shorter names have greater value. Short domains are more convenient to type, easier to remember, and better for branding, which is why they are highly sought after by domain flippers globally.
If you have a limited budget, it is advisable not to pursue shorter domain names due to their popularity and higher cost.
Local Domains
In addition to expired and short domain names, locally specific domains (those with extensions like .UK, .DE, etc.) can offer lucrative opportunities for flipping that you wouldn’t want to overlook.
Websites targeting specific countries not only have enough value to be sold for a decent amount of money, but they also offer the advantage of avoiding excessive competition and attracting a large number of prospective buyers.
New Domains
It may be surprising, but you can also profit from new domain names. By seizing an opportunity to acquire a name for a recently introduced product or service before anyone else does, you can subsequently sell that domain for a significant sum of money. The objective is to identify the value of the domain early on, purchase it at a low cost, and then later resell it at a higher profit.
Steps to Flipping a Domain Name
Find an Available Domain Worth Buying
To be able to resell a domain, it is necessary to first acquire one. Nevertheless, your aim is not to acquire any domain; instead, you desire a domain that is reasonably priced yet has potential to be sold at a significantly higher price in the future.
There are a few methods available to you to accomplish this task.
- Head over to a directory or a marketplace (such as NameSilo) to check out the domains that are currently on sale or have recently been sold.
- Use those same websites to search for expired domain names.
- Use Google Trends to analyze market trends and find potential domain names that have higher chances of being valuable in the future.
If you think you’ll find great domain names immediately, think again. It will require thorough and effective research, which can take several days, to find domains that are worth buying. Besides, many of them may not even be available for purchase.
Evaluate the Domain You Want to Flip
After finding a domain that you like and is available for purchase, you should assess its worth before buying. Various factors influence the value of domains.
- Length—If it’s short, it’s more valuable. As simple as that.
- Brandability—If it can be branded easily, then it will carry more value. In addition to being short, brandable names are always unique and memorable.
- Extensions—If it ends with .COM (or with a local TLD), it will be more relevant.
- Keywords—Broad, commonly used keywords give additional value to domain names.
Register Your New Domain Name
If your research indicates that your domain is valuable and has a clean history, you can proceed to register it with a domain provider. Registering the domain is typically a straightforward process that doesn’t require much time.
Make sure that the domain registrar you choose is reliable and trustworthy. At NameSilo, we can assist you in easily registering your domain and later selling it if desired.
After registering your domain, you can either choose to park it and earn some extra money until you find the suitable buyer, or you can begin the process of contacting the right individual to sell the domain to.
Find a Buyer for the Domain
This is the point that becomes slightly challenging. As stated earlier, you must search for someone who is willing to pay a higher price for the same domain as what you initially paid. When it comes to locating a buyer for your domain names, you have a few options available.
- Create a landing page—Let everyone know that you’re selling, include your basic contact information on the page (this can be obtained from WHOIS), and wait for people to come to you. This might take a bit longer than you’d like, but it’s the best option if you don’t want to face your buyers head-on.
- List your domain on a marketplace—This is the most common route that almost all domainers take. Before deciding which marketplace you’d like to work with, be sure to go through their policies and fees, as there might be some details that could complicate things and that’s not something you want in the long run.
- Make your WHOIS information public—In most cases, hiding your contact information from the online WHOIS database is highly recommended, but if you want to find buyers for your domain, you’ll need to disable WHOIS privacy and make your information available to everyone.
- Reach out to your buyers directly—If you have a domain related to e.g. cooking, then it will make sense for you to try and sell it to restaurant owners. The same goes for any niche that you’re in. You can even use different directories, such as YellowPages, to narrow down your search and get in touch with your potential buyers.
Sell Your Domain to the New Buyer
If you require extra security, you have the option to use an escrow service when selling the domain you originally purchased as the final step in domain flipping. Alternatively, you can choose to complete the sale through a domain registrar like NameSilo.
By following a sequential thought process, rephrase the given text while preserving its meaning. Ensure that no new information is added or removed. Once you have completed these steps, you simply need to transfer the domain’s ownership to the buyer, and presto, you will have successfully flipped your initial domain.
Domain Flipping Advantages
Here are a few reasons why domain flipping has become an appealing option for online hustlers:
Start-up costs are low.
To start flipping domains, you only require minimal funds. Other than these costs, all you need are a computer and a reliable internet connection, which makes domain flipping an easily accessible and low-risk business opportunity.
No Skills Are Required
Succeeding in the domain flipping business does not require a strong educational background or professional experience. Purchasing domain names is just as simple, quick, and safe as any other online transaction.
To expand your knowledge, begin by acquiring the necessary skills such as domain research, domain valuation, negotiation, and networking. Initiate your learning process by enrolling in online courses offered on platforms like Udemy or Skillshare. Additionally, you can hone your domain selling abilities by engaging with various marketplaces.
In order to gain knowledge about domain flipping from experts, it is advisable to consider participating in a domain workshop or seminar. Such events can provide networking opportunities with like-minded individuals interested in domains.
High Demand for Domains
Since the beginning of the commercial internet, there has been a steady increase in the demand for domain names. Additionally, the domain industry has witnessed growth due to the global pandemic, which has compelled individuals to embrace online activities.
In the second quarter of 2022, Verisign reported that there were more than 351 million domain name registrations across all extensions. Additionally, there is an increasing inclination towards top-level domains, which include country-code top-level domains (ccTLDs) and new generic top-level domains (gTLDs).
In Europe, ccTLDs make up 61% of the entire domain market share, and newer gTLDs such as .xyz have seen substantial growth, accumulating more than 5 million domain registrations.
The information presented above indicates that businesses of varying sizes are starting to formulate a robust domain strategy and seek out domain names that can be easily associated with their brand. This indicates that domain flipping is a thriving and profitable business endeavor.
Risks of Domain Flipping
Some of the risks that domain flippers commonly face are the downsides that come along with the numerous advantages of flipping domains.
Be Aware of Trademarks
While it is legal to register and sell domain names, concerns may arise regarding their ownership, such as being falsely accused of cybersquatting if you purchase domains that violate another business’s trademark.
Prior to purchasing or selling domain names, it is necessary to verify the uniqueness of your desired domain name by conducting a search on the database of the United States Patent and Trademark Office (USPTO). Additionally, it is important to check for existing commercial names and domain blocklists to ensure that no copyright issues arise.
Profitability Is Not Guaranteed
There is no guarantee that the price of a domain will exceed the buying price, like any investment. While it is possible to sell some domains within a few weeks, others may take months or even years of listing before a sale is made.
When compared to stocks or foreign exchange markets, predicting the value of a domain name is considerably more subjective and can pose a considerable challenge. If you are new to domain flipping, it is advisable to start with a small budget initially and gradually expand it as you get accustomed to the procedure.
Earnings Will Be Taxed
Additionally, it is worth noting that the income earned from flipping domain names is subject to taxation. It is essential to meticulously document both your domain sales and profits in order to accurately report them when filing your taxes. To ensure more prudent investment decisions, it may be beneficial to seek guidance from a certified financial advisor.
Side notes
It is possible to make money online by flipping domains, which is a cost-effective and adaptable method. This option is perfect for individuals searching for a part-time money-making opportunity that requires minimal investment and no previous knowledge. However, it is important to be aware of the associated risks, including uncertain financial gains, potential copyright complications, and the necessity of fulfilling tax requirements, before entering the domain flipping industry.
If you adhere to the recommended methods for discovering valuable domain names, assessing their worth, and effectively selling them, it becomes effortless to generate a respectable income by flipping domain names.
