There are countless ways to make money on the internet, and today we'll look at domain flipping or domain investing. Domain flipping is the process of buying domain names and selling them again for a higher value. It's a great way to earn some money on the side if done correctly.
There quite a few gotchas that you have to consider before starting with domain investing. In this article, we will try to help you get started with the basics.
So let's dive into it. How does the whole process work? First, you'll have to find a domain name that you think has some value. You can register it with your favorite domain registrar. Once you have registered your domain, you can list it on one or more domain marketplaces and set up a landing page indicating that your domain is for sale.
Now you can wait until a buyer finds you on one of the marketplaces or can reach out to potential buyers you think are interested in the domain. Once you have a buyer lined up, the recommended way to transfer it is using an escrow service; this guarantees that you get paid, and the buyer is guaranteed to receive the domain name.
With the basics explained, let's look at all steps of the process in detail.
Finding great domain names
Finding great domain names is pretty subjective on one side, and on the other side, it's usually pretty clear what is a bad domain name. Domain names can be categorized into several classes: Premium: single word .com domains are often sold for hundreds of thousands. High value: anywhere between 1000 and 10.000 dollar Low-value domains are worth less than 1000 dollars. When you are starting as a domain investor, it makes sense to aim for high-value domains. Premium domains are usually too expensive to acquire. But there are a lot of opportunities in the high-value category!
There are two paths to follow when finding domain names; you can get creative and register a new domain name that you have come up with by yourself. The other path is browsing through lists of expired domains and see if any gems have recently become available.
Determining if your domain name is valuable
Once you have come up with a domain name, you will have to determine if it's valuable. Now obviously, the value of a domain is very subjective. The best way to decide if a domain is worthwhile is to think of a use case. The domain name either has to be brandable or has a use case. Otherwise, it's going to be a hard sell.
There are a few domain valuation tools out there, but you should take the valuations with a grain of salt. The tools might indicate that your domain names are valuable, even though that might not be the case (the other way around can also be the case, of course). There is a use for these tools, but they shouldn't be your primary way of determining if a domain name has value.
An excellent way to see if domains have value is by looking at sales prices of previously sold similar domains. A good resource for that is NameBio. Registering domains Once you have found a name, it's time to register it at one of the many domain registrars available online. NameCheap is a pretty decent registrar with reasonable pricing that I usually use for most of my domains.
You can use their tool to check which domain names are free. Registering .com domains usually cost under 10$ USD. The prices vary per domain extension; some domain extensions can cost hundreds of dollars per year in registration fees. Listing your domains on marketplaces So you have just registered your first domain; the next step is to set up a landing page on your domain. The easiest way to do so is to create an account with dan.com.
Apart from listing your domain on the most popular marketplaces, you can also pursue active sales.; this can lead to selling your domain name quicker; however, many people do not appreciate it when you reach out to them. This is understandable; when you have registered some domains, you'll start to notice emails coming in with domain offers.
Closing the sale
You got lucky and, you found a buyer for one of your domains. So what's next? That depends on if the buyer made an offer on a marketplace or approached you directly. Marketplaces offer a convenient escrow service and take a percentage in commission for that. When the buyer approached you directly, it's still recommended to close the sale on one of the marketplaces so that you can use their escrow service. Most buyers will want to use some form of escrow, to begin with.
Buyers will deposit money into the escrow account, after which you transfer the domain name to them. The escrow service verifies the domain was transferred and releases the funds to you.