Beginners’ Guide to Domaining – All you need to know about domain flipping

Domain Flipping is a silent, juicy investment option which comes at certain risks too. Many people even don’t know that there is a term called Domain Flipping. Domain flippers make anything from $0 to $Millions of dollars every month. However, there is no fixed and stable way of earning from domaining since it is an uncertain earning option.

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Domain Flipping | Domain Selling | Domain Investment | Domaining | Domain Trading | Make money from Domaining | Make money by selling Domains | How to Flip a Domain

What is Domain Flipping | Domaining | Domain Flipping Guide

You buy a domain, fresh or expired (refer article on domain buying for elaborate details), and then sell it for higher price. This is the concept of Domain Flipping. Domain Flipping, also called Domain Trading, is a way to change the ownership of a domain name. With the new owner, the existing expiry of the domain remains same unless renewed or the transfer process has a renewal price (mostly when it is transferred to different registrar with an Auth Code)

If your intention is to buy a domain and sell it at a later stage with higher price, it is also called “Domain Investing” or “Domain Investment”. With the term Domain Investment, you can relate it with any other investment where you invest money on any commodity/service/share or products and expect a return when the price of your selected instrument increases.

Domain Flipping can be of different types and can involve different scenarios. Some of the scenarios are depicted below for better understanding:

Example 1 : You buy a domain for your personal use. However, you change your mind that you are not going to use that and you sell it.

Example 2 : You buy a domain for your personal use. You continue to use it and suddenly you receive a query from someone that he/she is interested to buy your domain. You, as getting a handsome amount of money after negotiating, sell the domain.

Example 3 : You buy a domain, develop a website on it, keep working and increase DA, PA, SEO, ranking etc. and sell it as a website along with the domain name for a higher price.

Example 4 : You buy a domain with the intention of selling it later. And you sell it once you get your desired price.

And so on…

So, whatever the scenario it may be, when you buy a domain and sell it, it is called “Domain Selling” or “Domain Flipping” or “Domain Trading”.

Why Domain Flipping is a lucrative business option

Highly Rewarding

A fresh domain registration takes about $10. At some registrars, or during offers a domain registration cost goes as little as $0.99 or less for .COM domains. However, a valuable domain can be traded for millions of dollars. Selling price of a domain does not depend on its buying price, but it’s demand and other underlaying value. So, it is not tough to guess that investment of a mere $10 can bring hundreds of thousands of dollars to the wallet. Domain Flipping is a highly rewarding business.

Unconventional Career Option

Domain Trading does not require travel, office space, physical work or any kind of routine efforts that is required for most of the regular jobs.

Be your Own Boss

No Boss, no one to do micromanagement, no one to ask for clarification for what you do. You take your own decision, you have your freedom to work from anywhere, work anytime. No office politics, no delivery pressure or work load pressure. It is similar to your own business where you decide when to work and how much efforts to put to grow your business

Less Resource Required

You only need a computer or even a smartphone does it for you to read and research about domain, acquire them, list and sell them. Very small engagement is required if you start on small scale, hence no employee or their working set up cost required.

Anyone Can Do

No age restrictions (unless financial transaction requires age specific regulation for some countries). There is no retirement or job continuity worry. Differently abled, young, old…anyone can flip domain or pick domain trading as an earning option

Does not require Degree

This job does not require any formal education or university degrees. However, some knowledge of reading writing is required in order to research about your niche and other domain related study that can help investing on valuable domains and selling them to right audience.

Build second earning option

Since Domain Flipping does not take much regular time, you could have enough time to build a separate business or earning option. You may build a whole separate business on building website and flipping them or provide brand consultancy to your clients or whatever suits you to utilize your time better.

No obligation

For most of the other business, it may require after-sales support or service. However, domain selling does not require after-sales service or support. Hence once you make a sell, you can relax assuring yourself that there is no return or refund of your sold domain that may concern you. Once you complete the transaction and domain is transferred to the new owner, you don’t have any obligation.

What are some high value domain selling examples?

Domain name sold for highest price ever was Cars.com at a whopping $872 million. Well if you think that it is a typing error from us, be assured that it is not. Cars.com was priced at $872 million (verified from SEC filing, courtesy of the parent company, Gannet Co., Inc.).

Many domains are traded with NDA or the transactions are not reported publicly. However, there are many high value domain selling which are public. Some of them are below:

Domain NamesSelling Price
CarInsurance.com $49.7 million
Insurance.com $35.6 million
VacationRentals.com $35 million
PrivateJet.com $30.18 million
Voice.com $30 million
Internet.com $18 million
360.com $17 million
Insure.com $16 million
Fund.com £9.99 million
Sex.com $14 million
Info Source : GoDaddy

Remember, these are only from the information which are available openly, or the tip of the iceberg, if to be termed as. Bigger transactions are generally happen in closed door. Hence one can assume what amount of money a domain can bring in if the domain offers worth value to the buyer.

How the Domain Flipping works?

It may sound complicated, but selling or flipping a domain is the simplest work you have ever done. Rather than explaining with words, lets see the steps/flow that would be clearer to the new domainers.

Let’s assume the Domain selling is happening on a marketplace or a domain trading platform. We would term the facilitator or domain selling platform as “Platform”, Domain Buyer as “Buyer”, Domain Seller as “Seller”.

Buyer Lists the domain for sale > Seller Buys it (by negotiation, BIN or Auction – whatever it is. Will learn about these next) > Automated Agreements is generated between the Buyer and Seller via selling marketplace or Platform > Seller’s Money (that he paid while buying) stays with the Platform > Platform informs Buyer that his domain has been sold > Buyer transfers the domain to seller > Seller confirms the receipt of the domain ownership > Platform deducts its commission and transfers the remaining amount to the Buyer

Also Read  GoDaddy Domain Transfer - Easy Step by Step Guide

During this entire transaction, if done on any professional platform, the platform would coordinate with buyer & seller and help getting the entire transaction done smoothly.

If the domain is sold independently, the buyer and seller have to do everything themselves.

However, selling the domain independently is not advised unless the buyer and seller are known to each other and long-term partners. Domain trading is a good place for scammers and they can take your domain away without paying or they would never transfer the domain once you pay. Hence it is always suggested to use Escrow or any similar payment model to ensure buyer and seller both are protected

How to Sell Domains | How to Earn Money by Selling Domain?

Proactive Selling

Domains can be sold via multiple options. Most popular of them are set your domain to BIN price, Make Offer & List to Domain Auctions.

  • Set to BIN Price : You may set your domain to BIN or Buy It Now price where prospective buyers would have option to directly buy your domain at a set price. In this option, no negotiation or no communication is required if sold on professional platforms. This is the most popular option amongst tenure domain flippers as it is the simplest of all the different options.
  • Make Offer : Domain can be set at Make Offer price where prospective buyers can make offer and seller can accept or counter offer. Mainly high value domains are set to Make Offer price where the amount is expected more than $10,000 or so. This method needs tracking of offers, replying to customer (if applicable), make decision of accepting or making counter offer. This option is worth for high value domain as negotiation can fetch some extra amount of money. And for buyer, negotiation can get the domain at discounted price.

Often the agents or brokers from the respective selling platforms help negotiating between buyers and sellers. However, that is optional.

  • Auction Listing : In this option, domains are put at Auction with a minimum bid (depending on platform, buyer or other factors). If that minimum amount is offered by any client, the sellers auction is binding. That means the domain would consider sold at the offer price (unless higher offered received). Seller can not deny selling the domain in this scenario.

Auction listing has its pros and cons. Since auction listing needs to start with lower price to attract bidders, it is a risk that the domain must be sold at whatever price equal or more than the minimum price is offered by any bidder. So even if the maximum bid is not as per expectation but equal or more than the minimum (reserve price), seller has to complete the transaction.

Interestingly, a normal domain can fetch huge amount of money at auction as different bidders often fight for their ego to buy a domain that they bid. Since the current bid can not be less or equal to the last bid, the bidding amount always gets higher that pulls the value up.

Apart from these, there are many other ways that the domains can be sold proactively. Outbound calls can be made to prospective buyers, buyers can be contacted through their social media pages to pitch a sale, domains can be sold through private brokers or agents, domains can be listed for sale as a ready website etc.

Customer Approaching

Often the startups or new businesses look for suitable brand names and domain names. If they come up with a suitable name and finds that the domain is already registered, they try to buy the domain from the original owner. They themselves approach the owner via email or other contact medium.

A prospective buyer can find you from Whois details (if available) once they search for their domain names and find them already registered by you. They often can get details from your own listing of domains on social media or your personal websites that they find by searching with their domain name or keywords on Google or other search engine.

A brand building agency can approach the owner of a domain for their clients.

These options require negotiation with the buyer to complete a transaction.

Where to Sell your domain

Domains can be sold through several domain marketplaces such as Sedo, GoDaddy/Afternic, Flippa, Epik, Dan, Sav etc. These platforms accept domains registered at any registrars. However, there are marketplaces such as DynaDot, NameCheap etc. where they only accept domains that are registered with them.

Most of the domain flipping platforms allow free listing of domains, however some domain trading platforms takes charges for listing. GoDaddy charges for Auction Listing, Flippa charges for listing on their platforms, Sedo (though they have free listing) charges for premium listing or direct auction.

How to decide the BIN price or set a Domain value?

Generally common domains, at marketplace, sell for anything between $49 to $999. However, the value goes up at auction and for short, single word dictionary word, highly brandable and valuable domains.

There is no formula in the world that determines the price of a domain. Yes, there are appraisal tools available and methods available that gives a tentative value of a domain based on various factors and previously sold price for similar domains.

There is no central regulator body to determine price of reselling domains. Hence it is completely on seller as how much money he would set to sell his domain.

Many pro investors would say that a domain name value would depend on keywords, character length, TLDs, audio test, spelling, meaning, trend, previous history, niche etc. However, there are many examples of domains that does not follow any of the parameters, being sold with huge price tag.

Yes, these parameter makes a domain name appealing to some end users but it may not be appealing for you as an end user. We all prefer a short, pronounceable, self-explanatory name for the brand but that may not be relevant to one someone else’s business.

Let me bring more clarity. Let’s assume John Doe has a diamond business set up named “John Doe Diamonds LLC”. He has a billion-dollar business but doesn’t have a website. He would put thousands of dollars to buy a domain name to represent his business that relates to his business. Now would he buy a 4-letter premium domain Kitchen.com even if it comes for $299 or would he go for JohnDoeDiamonds.com or JDD.com or JDDiamonds.com or similar that most closely represents his business but comes with a price tag of $10,000? Obviously, an intelligent person would advise the second listing that relates to his business.

Similarly, someone with kitchen equipment or Kitchen help related business would buy Kitchen.com for $1000 and ignore JDDiamonds.com even it comes for $49. Two persons in the kitchen business may also have different value of Kitchen.com depending on their business scale or annual turnover. Someone with local kitchen shop would definitely not buy Kitchen.com for $1000 but one who has a kitchen related brand that needs wide representation would not mine shelling $1000 out for the domain.

Also Read  GoDaddy Domain Transfer - Easy Step by Step Guide

Domain price is variable and the value remains with the buyer or the end user. As investor or domain flipper, you can anticipate the market, used case scenario and previous selling history of similar domains. Based on these, you can set a price. A domain investor can never decide the exact or optimized price. Hence it is better to list your domains with little inflated price so that once interests or offers come, you have place to negotiate. You can decide price based on price history of similar domains from websites like NameBio.com which keeps a record of all domains that are sold on major platforms.

If you are not sure to decide a price, you may keep your domain on Make Offer and observe what kind of responses that it brings. Based on the responses you can set a price or counter offer.

However, it is also better to be realistic and practical while setting a price. You should not expect $5000 for all domains that you bought at $10 each. It is wise to keep the price fair. You can keep yourself at buyer’s place an assess what maximum price you can pay for the domain if you had to buy it. Put some additional percentage on your buying price (if you had to) and put it for sale.

Domain Selling Risks

There is no risk on Selling domain if we term it that way. Domain selling or domain trading or domain flipping itself does not carry any risk as long as you carry out a confirmed transaction. But the risk is in the business model. Let’s explore.

Does not assure returns

The biggest risk of Domain Flipping business that it does not guarantee a return. Even it, at times, gives huge returns, but that is never assured.

It is also not like stocks or equity shares that would remain with you as long as you wish to keep as you buy it once. Domains expire at the end of the contract period and that is the biggest pain.

If your domain is not sold before expiry, either you need to renew it for next year or you have to drop it. If you drop the domain, your entire investment to acquire the domain is a loss. If you renew for another year, you need good amount of money in case you have a domain portfolio. (Just to the context, domain renewal prices are generally high than fresh purchasing cost)

For all the domains that you renew for next year, don’t assure you of getting sold either. If they also are unsold next year and you give up, this investment is also hits your pocket.

Incorrect Investment

We often fail to assess the tentative value of a domain and invest blindly on it. And the domain ends up being unsold or sold at a lower price than the investment. This is because of most Domain Traders’ common psychology that they consider themselves as an expert in this and ignores the basic research. Many domains that sound attractive may not have any end use. Hence, they don’t find any buyers, resulting it expire without any acquisition.

And practically, there is no such documents or set of rules which would define the kind of domains to buy that would sell. So, it is tough to make correct investment all the time.

Domain Business Scams

Modern scammers invent new and innovative scams every day. The newest addition is the Domain Business Scams.

Scammers would lure individual sellers or investors to settle transaction out of a regulated platforms such as GoDaddy, Sedo, Dan etc. They would ask seller to transfer the domain and they assure that they would pay via PayPal or wire transfer the money, even some additional amount. Once the seller transfers the domain and the scammers get the ownership of the domain, they either don’t pay or often ask for chargeback or refund to PayPal raising a dispute. The buyer loses both the domains and the money.

For the buyers, they would be lured by scammers who would offer premium domains with comparatively cheaper price. However, they would insist a payment via BitCoin (or other alt coins for that matter) or a direct wire transfer. Once the money is transferred, the scammers never respond.

For both the scenario, scam stars may gain your access with small genuine transactions over a period of time. Once your trust is gained, they would play the bigger bait.

Huge Investment

Though a fresh domain comes for a very little price of about $10 or less, one can not rely on a single domain. For a serious investment, a domain investor makes a portfolio or different kind of domains. Investors keep anything from 100 to 100000 domains or more in their portfolio in order to ensure some sales as the portfolio covers different niches that caters to wide range of buyers.

It is said that only 1-2% of the quality domains sell. It means, if you are sure that your portfolio does have quality domain, still you can expect 1 or 2 domains out of a hundred may actually sell. For average domains it may be less than that.

So even if one domain can recover all your money, a serious investor makes sure that he has different kind of domains with him. And to acquire that it takes a lot of money. Both for purchase and a yearly renewal.

For one who starts with 5-10 domains, this section may be irrelevant for them.

Scalability Issue

Since domain trading business is not like any other business, it does not assure that having more domains would give you more business. If McDonald’s opens more outlets in different regions, it is expected that an accumulated turn over from all outlets would increase. However, for domain investing, even if you double or triple your portfolio, you still may have same or less sale at the end of the year. Hence it is quite tough to scale the business with additional money and employees.

Can Domain Flipping be a career option

Domain Flipping can be a career option as it is for many people who earns millions from it. However, the business itself does have a narrow avenue. Like everyone eats food or everyone has a mobile phone or a computer, we are not yet in an age where many of us consider buying a domain for self or business. So, the buyers and end users are limited compared to other business.

Though the domain registrations have increased exponentially since last decade, it is yet not a very common topic for everyone. One needs to be cautious before stepping full time into Domaining as it does not guarantee a return.

It can be a rewarding career if taken part-time as an investment. However, a stable income is necessary unless one has enough bank balance to survive regular expenses.

Similar to Domain selling, selling websites is also a good way to earn decent money. You may read our website flipping guide to have better clarity on this.

What is Domain Flipping?

In simple terms, buying domain names and selling for higher price is Domain Flipping. Domain flipping can be done directly with customer or can be done via Domain Flipping websites such as Dan, Sedo, GoDaddy, Flippa etc.

Flipping Expired Domains

Similar to normal Domain Flipping, Expired Domain Flipping is buying Expired domain and selling it for higher price. Flipping Expired domains can be a profitable business if good expired domains can be spotted and bought.
To find good expired domains, websites like Expireddomains.net, Justdropped.com etc.

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