This article is for anyone just entering the exciting world of domaining – Buying domain names and then reselling them for profit. Investing in domain names is a relatively simple concept, but there’s much more going on then many people think. Domain investors search for domains that meet certain criteria, register them, and then sell the domains to other investors or people who want to use them for a website.
Before you can begin to sell domains, you need to build an inventory of them. In order to build an inventory of good domains, investors turn to a number of different sources.
Expired domains – One of the biggest sources for building domain inventory is expired domains. Every single month, millions of domains expire when their owners fail to renew them. These domains then become available for anyone to register. Most decent domains are registered the second they expire via domain backorder companies or drop catching software like DesktopCatcher. If you want to be successful building a portfolio with expired domains, you’ll want to become more familiar with DesktopCatcher and the different backorder companies out there.
Direct purchases – Another method for expanding your domain portfolio is buying the domains directly from their owner. This process can be time consuming, but can also bring some of the best opportunities to grab a name at a great price. To accomplish this, you’ll need to reach out to the owner of a domain and ask if they would be willing to sell it. If so, you then need to negotiate a price and use Escrow to complete the sale. The best way of finding out who owns a domain name is to use a WhoIs database.
Marketplace purchases – Millions of domain names are listed on marketplaces like Sedo and Afternic. Domain investors will search these marketplaces for domains they like and then submit offers to buy them, or simply buy them instantly if the seller is using the Buy Now option.
Live domain auctions – One of the most exciting ways you can acquire a new domain name is to bid on them in a live auction. Like expired domain auctions, there’s a lot of attention on these auctions making them a difficult place to find a good deal.
Hand registration – The cheapest way to build an inventory of domain names is to hand register them. Domainers use the term hand registration to refer to registering a domain name that isn’t currently registered. All you have to do is go to a domain registrar like DynaDot to register the domain at normal pricing.
Types of Domains
Descriptive – Descriptive domains describe a product or service. For example, ChicagoPlumbing.com describes a service of plumbing in Chicago. BlueWidgets.com describes a company that sells blue widgets.
Brandable – A brandable domain is one that can be marketed to stand for something other than the dictionary definition of the word. A good example of this would be Apple or Amazon. Apple makes computers and smartphones, not the fruit. Amazon doesn’t sell jungles or rivers like the name suggests, either. Amazon is a brand rather than descriptive of what the company actually sells.
Short domains – In recent years a whole market has developed specifically for short domains. These include domain names that have just a few numbers or letters in them. These are popular because there are limited quantities of them available. For example, there are only so many possible 4 letter combinations out there. That creates some demand for any domain that is only four letters long.
After building an inventory it’s time to start selling your domains. Many real estate and equity investors are happy to get 10% or 20% return on their investment. 100% is incredible, but not in the domaining world. Domainers can typically expect 10 times or more on their original purchase price. Below are the three main ways most domainers go about selling their names.