Buying and selling of domains are volatile in nature yet it is a huge business in the marketplace. You will only need Google to dig deep into information of ‘domaining’ to view a sea of information on the subject.
So what’s the deal with domaining? Why is it so popular? You have probably heard stories about people selling domain names for thousands of dollars. Some of these stories are true.
Here are few high profiles 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
We have jotted down some statistics from one of the most popular auction website called Flippa
- 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 now you can understand how domainers live their lives. Buying and selling domains for their livelihood has been many roles of many domainers.
Type of Domainers
There are two types of domainers in the industry –
- People who purchase domains with the intention of on-selling them immediately for profits.
- People who purchase domains with the intention of developing them and then onselling them for profits. Generally known as Domain Flipping.
Kalena Jordan, one of the well known first search engine optimization expert in Australia says “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 in the domain flipping business you should be opportunistic and persistent. You need to have the ability to spot a high resell potential and which will also give you 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 outperform 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 as we have always told, it is highly unlikely you will make a profit from simply purchasing domain names in bulk and reselling them.
Sure, domainers in Type 1 from above will occasionally make a quick turnaround. But when you ask a domainer as to which sales have been the most profitable and hence he or she will tell you it is the developed domain that acquires high value.
An undeveloped domain is similar to any unrenovated or unfurnished house. Because it is difficult for buyers to comprehend what it would be like to use it for themselves. To achieve a good buy on your domain, you need to invest the time in revamping. It should include 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 integrating all these in your domain is a cumbersome process, but all these factors will certainly make your domain appealing to potential purchasers and help you achieve on best return on your original investment. This is where the concept of domain flipping is getting used. What you are doing is essentially flipping a domain name with the potential into the viable business model.
Apart from these gold rush hours, you would have also heard stories about big brands losing their domains to squatters or random people. The domain business goes both the ways. It is useful for the persistent web-savvy individual and also the otherwise. It becomes very difficult once you get drowned in this infested marketplace.
How Do You Get Started with This Tricky Business?
Useful Domain-Related Resources
Domain Auction Sites/After-markets:
Sites/Blogs About Domaining:
What do you think? Do you think you want to be a domainer? Here we have listed few final words about domaining business by anonymous people.
- “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!”