You’ve probably heard people say, “What’s in a name?” Well, when it comes to domain investing, the names can mean big money for the entrepreneur.
Being a domainer takes skill, persistence, and flexibility. But investing in domains can be lucrative when done right. This article shares the essential steps you need to know to get started in domain investing:
- How to buy domains?
- What domains to purchase?
- How to sell domains?
How To Buy Domains
If you were investing in real estate, you’d begin by buying properties. Similarly, when investing in domains, you need to start by buying domain names. These are the online properties you aim to sell for more than you paid.
But how exactly do you buy domains? Here are the main options.
Domain auctions Similar to an auction on eBay, you’ll place a bid on available domain names. As people make their bids, the price goes up. The players in a domain name auction tend to be other investors, companies no longer using that domain, or companies with expiring domain names.
Buying expiring domains There will always be domain names expiring. The person or business doesn’t want the name anymore or doesn’t realize it has lapsed. After a certain amount of time, the domain name registrar puts the domain up for sale again.
Competition is fierce for decent domain names that expire. So this can be a challenging area for the entry-level domainer. However, some companies can help you get into this “drop catching” approach to domain investing.
Direct purchase If you can track down the actual owner of the domain name, you can avoid paying service fees. It may take more time, but you could end up getting a better price.
Hand registration This is when you come up with a domain name no one has registered before. You’re not going to be the first to register cookies.com. But you might be able to register MammasMintCookies.com. Of course, you then have to find a “Mamma with Mint Cookies” that wants that business website.
Marketplace purchase There are so many people in the domain investing business that there are sites devoted to buying and selling domain names. You could do a domain name search and make offers on the ones that you like.
What Domains To Invest In
Now that you know how to buy domains, you’re going to need some input on deciding which domains to purchase.
Let’s keep the real estate comparison alive. If you’ve watched any HGTV, you know that house flippers don’t buy just any property. They are selected based on location, house structure, price, resale value, market trends, and more. You need to be picky when it comes to buying domain names too. There are some key things to consider before purchasing.
Short domain names One word domain names are primo properties for domain investing. Yet, that .com boom has already pretty much run its course. In fact, short letter or number combinations are now a big seller. In 2014, for instance, 37.com was sold for $1.9 million!
Brandable domain names By researching market trends and taking a creative approach, you might anticipate potential domain names. However, if you’re too original, the name may not be viable. You might check out our Brainstorming a Domain Name for help.
Memorable domain names The more descriptive and easy to remember the domain name, the more likely it will have traction. A domain name that is difficult to spell or read is not a good candidate. Plus, you want to avoid hyphens. According to moz.com, hyphen use “strongly correlates with spammy behavior and decreases domain name readability and memorability.”
As society moves to do more and more of its life online, we’re running out of .com properties. Now, you can also purchase other suffixes. However, one domain name investor advises, “don’t even think about flipping .org, .net, etc. until you have bought and sold a few .com names.”
How To Sell Domains
When getting started, you may want to buy only a few domains. Your annual registration fee will run roughly $7-15/year, but you may pay much more for the domain name itself. Try to flip them for a high-profit margin. In domaining, a 10% profit is small potatoes. People are looking for at least 50% profit. Of course, the big dream is the kind of profit margin involved with owning domain names such as sex.com or diamond.com.
You’re going to need a platform for registering multiple domains and one dashboard to manage them. Keep in mind that there are fees involved in registering the domain name and promoting it or putting it up for auction.
Before selling your domain name or even purchasing it, you will want to have a good idea of the name’s value. There are estimator sites online, but experienced domainers caution that they aren’t always reliable. You can also research using namebio.com, a historical domain name sales database containing more than $1 billion in sales.
Then, once you have valued your domain names, you’re going to be on the other side of the table of some of our buying options. You can try to sell domains directly (saves you money), sell domains at auction (could get a higher price), or list your inventory on a domain name sales site.
Adding a “for sale” sign to a landing page at your domain name website can help drive sales too. It allows visitors who search that domain name know to inquire. That way, someone looking to start a business and checking out their domain options comes right to you (e.g., Mamma with her cookies).
You can also reach out directly to companies that you think would want your domain name. This will require you to do market research and find a target buyer. Or you could always sell to another domain investor, but you’re less likely to profit.
If the domain doesn’t sell as quickly as you’d like, you may need to park a domain for advertising purposes. This lets you generate additional ad revenue.
The more than 100 million websites on the Internet represent a whole lot of domain investing opportunities. Before going all-in on a domain name investment company, you might want to start small. Fortunately, there is a domain investing community online that can help. Plus, we have two more articles about it in this domaining series to help you out!
Are you ready to become a domainer? Registering domains is a simple process with Yahoo Domains! We also offer a free business website and personalized business email address, which will help advertise your registered domains. Get started today!