In today’s post, you will learn how to make money by trading domain names.
You read that right.
You can make money selling domain names.
And not in the way you are thinking about it, though it is the most common one. Anyways, I will discuss both (2 ways to make money selling domains).
Before we get there though, covering the basics won’t hurt. In fact, it will help you see the bigger picture more clearly.
To bring you up to speed on what a domain name is,
A domain name is a web address used to access a specific website.
Just to take you down this rabbit hole for a minute, a domain name is used to identify a specific website.
When you host a site on a server, you get a special series of numbers to identify the location of your files. These series of numbers are what “you” geeks called IP addresses.
They (the IPs” look something like this “123.34.345.2.”
Just a simple question before we continue, can you memorize that?
Can you memorize a dozen of such IPs?
I’d love to see you try.
Here is the thing:
IPs are perfect for computers.
Your computers use IP addresses all the time to communicate with each other.
While we humans identify each other as John and Kenn, computers introduce themselves in respective IP addresses.
But someone has to operate the computers, right?
Well, that is where the domain name comes into play.
When you register a domain name, the registrar associates the name you picked with the IP where your site files are stored on the server.
That explains why no two websites have the same domain name. And that is where the gold mine lies.
As you will learn today, it is about the rarity of the domain names that makes it sell for thousands of dollars.
How to make money trading domain names
The BIG question, these domain names, can you really make anything selling them? After all, they are just names people type into browsers to read the news, blogs, and articles, right?
That is where you are wrong.
You may be seeing ‘just a name’ with your earthling’s eyes but wait until I open your ‘third’ eye.
You will be amazed at how easy it is to make money trading domain names.
As promised, there are two ways to make money selling domain names in Kenya.
Way #1: reselling domains
Reselling means that you buy domain names in bulk and resell them to consumers at a profit.
This is the common way most of you folks know. I guess because it is what everyone is doing and you can see it everywhere.
To get started, you first identify a web hosting company offering a reselling package.
In most cases, they offer two: 1) domain reselling and 2) reseller hosting.
But since you are interested in the first option that is what we are going to talk about.
All you have to do is approach a hosting company near you and ask them about their domain reselling package. I am pretty sure they have something, and in most cases come in form of packages.
Each package comes with additional features and resources that will make your work easier.
Pick one you can afford, and since you are starting out, I’d recommend you start with the lowest once.
Market the crap out of it.
Only consider upgrading if the business is booming.
Ideally, you are starting a domain selling company. But because it is a white label model, you bring a customer, they think they are dealing with your company, but in the real sense, it is the other company doing all the registration.
But who cares, you are making money.
That said, being a domain reseller is the first step on how to make money trading domain names.
The next one is my favorite.
As you will learn, it is the most lucrative way of making money selling domains in the whole world.
In fact, it is a little known way, only know to a few, and they are killing it.
When I say they are killing it, I am talking of upwards of six figures just from trading domains.
Way #2: flipping domain names
First things first, what is flipping?
According to Wikipedia, Flipping is the process of purchasing a revenue-generating asset and quickly selling it for profit.
There are two things I want you to pay attention to here: purchasing, and quickly.
These two sets this strategy apart from reselling domains though both involve buying domains.
See, in domain reselling, you have to have bulk (inventory), then resell it for profit. On the other hand, flipping only involves one domain at a time (in most cases).
Additionally, with domain reselling, you have no intention of retaining the domain for longer periods.
On the flip side, flipping domains can sometimes involve holding onto a domain for quite a long time, up to years, waiting for that deal to come.
Now that you understand what the two stand for, let me get you examples to prove this works.
Here are some domains that have sold for millions of dollars:
- Jade.com $1.25 million.
- Whisky.com $3.1 million.
- IG.com $4.7 million.
- Candy.com $3.0 million.
- Auction.com $1.7 million.
- Toys.com $5.1 million.
- Z.com $6.8 million.
- Vodka.com $3.0 million.
I mean, we can go on the whole day listing thousands of domains sold for a lot of money, but in the end, you will have to learn how to make money trading domain names. Or, isn’t that what you want to learn?
Just to recap, domain flipping is a money-making venture where you buy a domain name, then resell it for profit.
When I say buy, there are two ways you can do that:
- Register a brand new domain with your favorite registrar. Here, you search a domain name, if it’s available, go ahead and register it.
- Buy a domain from someone else, then resell it to another at a profit.
Throughout this article, the ‘buy domain’ will refer to any of these two methods.
One more thing, there is a rumor that Cars.com was purchased for $872 million. While you soaking in that, let’s learn what makes domain names profitable.
What makes domain names profitable?
A good question.
Look at the above domain names that sold for millions, what do you think makes them different from all of these other website names?
If there is something notable about them is that they either contain short words or short-lettered names.
Well, it turns out, this is the common character of valuable domains across all industries and niches.
Requirements for domains guaranteed to fetch huge profits
If you want a domain that will sell quickly and for more money, consider the following characteristics.
- Domain length – the name should be between 3 to 4 characters long. This makes such domains rare, thus impossible to register. Most of such domains make a perfect name for a brand or company. For example, Voice.com was bought by a blockchain company.
- Domain age and authority – the more old a domain is, the valuable it is, thanks to SEOs. I mean, tell an SEO you have a 3-year old domain and watch their eyes bulge in excitement. Why? It is assumed, old domains have the upper hand of ranking on search engines (higher domain authority) because of the more backlinks it has gained over the years.
- Brandable – can the domain be easily turned into a business? Random names like yrtrcy.com won’t amount to anything, because they mean nothing. I mean, look at a name like co.ke, PrivateJet.com, and CarInsurance.com, they all have the potential to build brands
- Domain extension – if you haven’t noticed, most of these domains are all .com extensions, because it is the most popular extension today. But .org, and .net is rising to the challenge. Alternatively, if you are targeting a specific country, say Kenya, use .co.ke, .co.in for India, .co.uk for the United Kingdom, and so forth.
Considering these factors will ensure that you have valuable domains. And you can flip them profitably.
If you take only one thing from this section, take this:
- Domains are considered valuable if they make an excellent name for a business, niche, or industry
- Or, they are rare and impossible to register again
Now, since you know what to look for to lay your hands on a valuable domain, where should you look?
That is our next step in learning how to make money trading domain names.
Also Read: – How to Make Money With Global Internet Fortunes
How to find domain names worth investing in
Just like any other business where you need the product to sell, domain flipping works the same way. You need domain names to be in business.
The question is, where will you get them?
For starters, be sure to use the characteristics I have given you previously to identify a valuable domain.
Armed with the checklist, here are common ways to get domains to sell.
Searching and registering unclaimed domains
Here, you embark on a ‘hunting’ mission to identify potential words that can make valuable domain names, check their availability.
If available, go ahead and register it, then wait for offers to come.
To start the search, use these tips:
- Analyze market trends to unearth trending and soon-to-trending topics. Get domain names based on such trends and register. Be careful here because it is a bet
- Use a dictionary to unearth words that are easily pronounceable, memorable, and Brandable. Look at names like Marketing.com, Cars.com, be inspired. Just make sure the word means something to someone
- Look for alternative extensions. For example, if a domain already got .com extension, how about .net, .org, etc.? There are over 1000 extensions as we speak, find one that means something. One problem, be careful here not to fall into trademark issues. You cannot buy sportpesa.org thinking the company will agree to buy it, after all, they already have other extensions and they have a lot of money. It can get messy really quickly.
2. Expired domains
If you don’t want to deal with the whole headache of searching for undiscovered names, this is for you.
Expired domains mean exactly what it sounds like; domains that have expired because the owner failed to renew them.
Here is an interesting fact, a certain guy ‘owned’ Google.com for a few minutes sometime back using this method.
Well, while browsing through Google Domains, a site for buying websites, he discovered that Google.com was available (unregistered). So he went ahead and purchased it, to his surprise, the transaction went through without a hitch.
To cut the story short, Google discovered the glitch and refunded the guy his $12. Anyways, he becomes the guy who owned Google for 3 minutes.
See, there is something to learn here. People are sometimes lazy or just ignorant, thus fail to renew their domains.
When you buy a domain from a registrar, you are required to renew it annually. If you fail, the domain enters a ‘grace’ period of about 90 days before it is completely out to the world for registration again.
That is where you can grab it. In most cases, after the 90-day grace period, the registrar put up the domain for auction. That is when you swoop in.
Here are some reasons why this works:
- Expired domain means that once, somebody valued it, making it more valuable as compared to an unregistered one.
- An expired domain has a history that’d be of interest to you. Think age, domain authority, and traffic. This makes it a goldmine as far as SEO is concerned. With an aged domain, it doesn’t matter whether its name is great or not, for example: if it was registered 7 years ago, it is more valuable than if it is brand new, hence no history
While these may make buying expired domains attractive and you want to jump in right now, hold your horses’ cowboy.
It is not always roses and unicorns when dealing with expired domains.
- A good expired domain may sell for at least $10. But since you are in an auction market, you run a risk of losing it, or overbidding, thanks to bidding wars. As such, it will be harder to flip it for profit.
- The fact that it is an expired domain, means that it’s been used before. The thing is, you don’t know exactly what it was used for. Maybe it’s been banned from Google AdSense or blacklisted on Google. You should therefore do a proper background check before investing in expired domains. Use tools such as Archives.org to help
That said, where will you get these expired domains?
Here is a list of sites you can check:
- DomCop – paid option
- com – has a newsletter giving curated information they deem valuable about domains
Once you have the domain, you should move it to your registrar. Check how to do that from online tutorials.
How to get domain customers
- Reach out directly to potential buyers
- Create a landing page with the words ‘domain for sale’ works like a charm. Include ways to contact you
- Sign up on the domain marketplaces like Flippa.com, GoDaddy, BrandBucket, etc.
Learning how to make money trading domain names is the most valuable skill you can get in 2022.
You don’t need any work or special knowledge to get started. All you need is an eye for undervalued domain and you are in business.