July 8, 2014
The buying and selling of domains is big business. You only need to Google ‘domaining’ to see a tsunami of information about the subject.
So why is domaining so popular? You’ve probably heard stories about people selling domain names for big dollars. Some of those stories are true.
Here are a few of the more high profile recorded domain sales from the past decade:
- Insurance.com – an insurance quotation site – sold for $35.6 million in 2010.
- PrivateJet.com – a private jet booking service – sold for $30.1 million in 2012.
- Hotels.com – a hotel deals site – sold for $11 million in 2001.
- FB.com – sold (to Facebook) for $8.5 million in 2010.
- Beer.com – (now parked and unused!) sold for $7 million in 2004.
- iCloud.com sold (to Apple) for $6 million in 2011.
- IG.com – a stock trading site – sold for $4.7 million in 2013.
- Whisky.com – an information site – sold for $3.1 million in 2014.
Now take a look at some statistics from Flippa.com, one of the most popular domain auction websites:
- More than 400,000 users have registered on Flippa to buy or sell domains.
- A bid is placed on a Flippa auction every minute.
- There have been $711,532 in domain sales over the last 7 days.
- Flippa has sold $122,039,671 in domains since launch in 2009. That’s right — a whopping $122 million US has changed hands in domain sales on this one auction site in the past five years.
So is it possible to make a living from simply buying and selling domains? It is indeed and there are plenty of people doing just that.
Types of Domainers
There are generally two types of domainers in the industry:
- Those who purchase domains with the intention of onselling them immediately for a profit.
- Those who purchase domains with the intention of developing them and THEN onselling them for a profit (domain flipping).
As an Internet marketer, I have amassed quite a large collection of domains over the years, (currently numbering around 50 active domains), almost all of them relating to new business ideas or for branding or marketing of existing businesses. However, most of these purchased domains sit unused and unloved in registrar limbo, while I try to find the time to do something with them. Most of them are on auto-renew, but sometimes I’ll simply lose interest or forget and let the domain quietly expire.
Unfortunately, this approach is never going to be profitable. If I was ever going to make a living from domaining, I would have to shift gears and embrace one of the domainer categories above. For me, domain flipping would be the obvious choice.
To be successful at domain flipping, you have to be both opportunistic and tenacious. You need to be able to spot domains that have high resell potential and will give you a good return on investment.
According to Flippa, domain sales in the fields of finance, business, home, entertainment/gaming, social media and family related niches seem to out-perform the rest of the market. In terms of domain niches, forums sell well, but struggle to make traffic and conversions, while review sites, gaming, business, hobbies and tech are consistently popular. Internet Marketing sites tend to be short-term earners, with low sale prices, but often high turnover.
BUT — and it’s a big but — it’s unlikely you’ll make a profit from simply purchasing domain names in bulk and re-selling them.
Sure, domainers in Category 1 above will get the occasional quick turnaround, but ask a domainer which sales have been the most profitable and he/she will tell you it’s the developed domains that draw the big bucks.
Just like an unfurnished or unrenovated house, an undeveloped domain makes it difficult for buyers to imagine what it would be like to use it themselves. As with flipping houses, to achieve a good price for your domain, you need to invest the time to renovate the property. That includes developing it to the point where it has:
- reliable hosting
- analytics tracking
- attractive design
- quality content
- good search engine placement
- consistent traffic
- trusted link profile
- revenue generation if possible (e.g. via Google AdSense)
Although building them into your domain will take time, all these factors will make the domain appeal more to potential purchasers and help you achieve the best possible return on your original investment. What you’re essentially doing here is flipping a domain name with potential into a viable business model.
Apart from the domain gold rush, you may have also heard stories about big brands losing their domains to squatters and ransomists. This is also true. The domain industry is ripe with opportunity for the tenacious Web-savvy amongst us. Unfortunately, it is also a murky, shark-infested sea and you can drown or be drowned if you’re not careful.
So just how do you get started in this tricky business?
Domain Resources to Get You Started
Below are some useful domain-related resources if you are interested in dipping your toe into domaining:
- Flippa’s Domain Selling Guide (PDF)
- Flippa’s Domain Buying Guide (PDF)
Domain Auction Sites / After-markets:
Sites / Blogs About Domaining:
Still keen to become a domainer? I’ll leave the final words on the subject to a couple of anonymous domain flipper friends of mine:
“Make sure your price expectations are realistic”
“Don’t release the money until your new domain has been moved to your hosting account”
“If you haven’t developed it within 6 months, offload it”
“Always use a broker!”
Article by Kalena Jordan, one of the first search engine optimization experts in Australia, who is well known and respected in the industry, particularly in the U.S. As well as running a daily Search Engine Advice Column, Kalena manages Search Engine College — an online training institution offering instructor-led short courses and downloadable self-study courses in search engine optimization and other search engine marketing subjects.