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6 Tips to Turn a Profit With Domain Flipping

Last updated: September 25, 2020
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The internet has become a new frontier for both businesses and individuals who are starting their own websites in hopes of fame, fortune, or something in between. But before these people can stake their claim on any piece of the World Wide Web, they need to purchase the perfect domain name. Through domain flipping, you can make a big profit out of this demand.

So, what is a domain exactly? It’s essentially an address that allows other people on the internet to locate your website. Some popular examples include “youtube.com” or “wordpress.org.” By typing this domain into the address bar, that website will pull up on users’ screens.

In order to capture the most visitors, most website owners want simple domains that are memorable and directly reflect their brand. But with over 350 million domain names already registered, they know they may not get to the perfect domain first, so they may be willing to pay good money to take it over if it’s up for sale.

This article will explain what domain flipping is and how you can turn it into your next high-profit, somewhat passive income opportunity.

What Is Domain Flipping?

Domain flipping is the practice of purchasing domain names and re-selling them at higher prices.

Of course, successful domain flippers don’t just purchase any available domains. Just as you would research location before making a real estate investment, domain investors consider how likely they are to find prospective buyers for each specific domain. Once they find a domain, they’ll make the purchase and put it up for sale in hopes of getting a lot of money in return.

How Much Are Domains Worth?

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The dollar value of domains can fall anywhere within a massive range. Some domains are free, some are worth a couple hundred dollars, and some are worth thousands or millions. The most valuable domain name of all time — Cars.com — was actually sold for $872 million, which soars over $800 million above the value of the next most expensive domains.

While landing a multi-million-dollar sale is every domain flipper’s goal, finding these extremely high-price domains can be a lot like finding a needle in the haystack. Even domains that can be sold in the six-figure range can be difficult to find, especially for a good buying price.

It’s hard to estimate the average earnings that can come out of flipping domains, so the most important takeaway is that it’s not an opportunity to get rich quick. While a domain flipping business can basically run itself once you have your domains purchased and posted, you may need some experience before the amount of money you earn allows you to quit your day job.

6 Tips for Choosing and Selling Domain Names

Understanding how to identify good domain names can be tricky, but with a great flipping strategy in place, you can maximize your profits from every sale. Here are our six best tips to help you sell domains for excellent prices.

1. Know Where to Go

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Before you get started with domain flipping, you need to know where you can buy and sell domains in the first place. Sites like Namecheap and GoDaddy are go-to domain marketplaces for plenty of investors, while others prefer to purchase from private sellers and then sell as a private seller on Flippa.

Many domain flippers avoid “hand-registering” domains. This refers to the practice of buying brand new domains or expired domains that are available just through a search. This is because the majority of great domains — especially .com domains — with lots of potential buyers are already snatched up.

2. Start Small

Before you start investing in domains that cost over $500 or more, get your feet wet. Just a little bit of experience can go a long way when you’re a domain flipping newbie, as it will help you learn how to calculate and predict value — an essential skill for any investor.

When you’re first starting out, create a budget for yourself to ensure you don’t overspend. Then, invest time into browsing through your options. Don’t immediately purchase the first domains that jump out at you, as you may have an emotional connection to a name that has little value at all.

To prevent rash decisions, create a list of potential purchases before taking any action. Ask yourself why each one can offer value to buyers and how many buyers would actually be interested. Taking a logical approach will ensure you buy domains that are truly worth your time.

3. Prioritize Memorable Domains

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As we mentioned previously, it’s easiest to sell domain names that are highly memorable and easy to type. Some of the best domains are short, actual words or common acronyms, and are .com domains.

Some domain flippers will even look at the level of traffic that a domain has had in the past, as this can easily increase the value of a seemingly random domain name. Domains that have a lot of backlinks from trusted sites can also be desirable, as this can give a business a head start with search engine optimization (SEO).

While you do want to buy brandable domains, it is important to avoid purchasing trademarks. The United States government protects trademarks, including names of both businesses and individuals, so your investment may end up being for nothing. It’s best to stick to common words or phrases (like “pizza.com” or “travelmore.net”) that can’t be trademarked.

4. Research Keywords

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When you know what consumers are searching for, you’ll be better equipped to make great domain purchase decisions. Google Keyword Planner is a great resource for anyone who wants to know the most popular keyword variations around.

You can also pair your keyword research with a domain name sales history tool like NameBio. NameBio allows you to input the keywords you find, discover related domains, and learn about their value over time.

As you’re doing your research, don’t overlook the value of local domains. Think about how many people are searching “NYC pizza” each day, and how valuable it could be for any local pizza shop to own “NYCpizza.com.” You may be surprised by the profit you earn from these often overlooked domain names.

5. Research Similar Names

While trademarks absolutely need to be avoided, you can consider purchasing non-trademarked domain names that are similar to a specific brand. After all, the American Farm Bureau Federation was able to sell “fb.com” to Facebook for $8.5 million, making it one of the most expensive domain sales to date.

If your day job involves owning a business, make sure you’re not purchasing a domain related to your competitor’s brand. This could be considered purchasing a domain in bad faith, which can get you into legal trouble.

6. Create a Landing Page

As a marketing tactic, some domain flippers choose to invest in hosting and make a landing page go live. On this landing page, you can advertise that your domain is up for sale and include details about how to contact you. This way, you may be able to get directly in touch with interested parties who are researching domain names, and be able to negotiate better prices.

If you need a good resource for creating your landing page, you can use Name.com’s one-page website builder for as little as 99 cents.

Frequently Asked Questions

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Once you make your first purchases and list them for sale, flipping domain names can be an effortless way to earn. To learn more about this potentially high-paying practice, read our answers to these frequently asked questions.

1. Isn’t domain flipping illegal?

While cybersquatting is illegal in the United States, domain flipping isn’t. These terms are often confused because the practices can be similar, the biggest distinction here is the fact that cybersquatting is done in bad faith. Domain flipping can become domain squatting when you’re trying to profit off of a trademark or a business competitor.

In order to prevent your domain flipping from crossing into illegal territory, make sure to always do your research before buying a domain. If you do accidentally purchase something that’s trademarked, never hold the domain name ransom.

2. Is domain flipping the same as website flipping?

No. While domain flipping is accessible to pretty much anyone, website flipping tends to come with far higher risk. In order to flip a website, you need to first purchase a complete site that already has plenty of content (preferably content that’s SEO-friendly) and a decent online reputation. This usually costs at least a few thousand dollars and can be likened to buying and selling a business.

3. Is there a way to tell when a domain is about to expire?

If there’s a domain you’re interested in, you can look it up on this Whois Lookup tool. The results will show when a domain is set to expire, as well as when it was last renewed. If a domain has a public tech contact listed, you may even be able to directly reach the domain owner and see if they’re up for an early sale.

Turn a Profit With Domains

Domain flipping can lead to enormous profit, with great domains always in high demand. Once you get some experience under your belt, you’ll be able to identify the domains that will get you the best earnings. While flipping domains won’t lead to million-dollar sales for the average investor, it can lead to plenty of extra money with minimal effort.

If you want to create landing pages to market the first domain names you put up for sale, learn about HostGator discount codes you can use to minimize your hosting investment.

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