The Lucrative Business of Flipping Domain Names

Thanks to the recent real estate bust, the term “flipping” conjures all sorts of images of plummeting profits, ruined investments, and dashed hopes.

In this article I’m going to tell you how you can make a fine profit from flipping. But instead of flipping houses, I’m going to tell you how to flip domain names. And how to do so for big money.

First off, what’s a domain name? Simple. It’s also known as a website address or URL, you know somethingsomething.com.

So How Do You Flip A Domain Name?

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There are two practical ways to flip domain names for profit:

1. Buy a domain name and sell it without developing the website, which I’ll tell you more about in just a moment.

2. Buy a domain name and build the website, place ads on it, practice good SEO by adding keyword-rich articles, videos, and other useful content, get it ranked on search engines like Google or Bing, and then sell it.

The first step to flipping a domain name like this for profit is to pick a niche that you are comfortable with. This could be a love of dogs, tennis, yoga, the sky’s the limit. The niche should also be something many other people are interested in and are buying online.

Naturally, since the second strategy involves much more work on your part, the profit potential is going to be much higher. In essence, you’ll be selling an established website – a full-fledged business really – with web development, SEO, content (which could include articles, podcasts, and videos) and a built-in audience. Yes, it’s more work, but it also means you can ask for much more money when you put it up for sale.

That’s why I suggest, if you decide to go the second route, that you build a website about something you already know about. Everybody has an interest or a hobby that gives them a leg up over others. If you can succeed in transitioning your particular skill set into a website, you’ll have no trouble selling it.

The first method of flipping a domain name without building a website is quicker, cheaper, and less labor-intensive. Basically, you’ll buy (or register) a domain name that people might want for their own website and then put it on the open market in hopes of selling it to them.

You may remember tales from the early days of the dot.com explosion where people were buying up all kinds of domain names like www.beatles.com or www.walmart.com, thinking that when the big companies got around to making their own websites, they’d have no choice but to fork over large chunks of cash to buy back the domain name somebody had already snatched up.

Unfortunately for these early domain flippers, federal courts have largely sided with the large corporations (big surprise, right?) in cases where a trademarked brand name was used and the pioneering domain-flippers were ordered to surrender the domain name for no monetary gain.

Luckily for you, however, those domain names are already established and any big company worth its salt already has its domain claimed. So we won’t be involved with going after trademarked or brand-name domain names at all.

But there are still ways you can buy a domain name and sell it without even building it into a website. There are three main ways to do this:

1. Sell to an End User – Marketing your domain name directly to an end user requires that your domain name be specific about a certain geographical area or a certain industry. Use domain name companies like GoDaddy.com to search for available domain names and find one that will be easily marketable.

An example would be to register the domain name CaribbeanCruiseDiscounts.com and then trying to find a company that offers Caribbean cruises that wants to buy that domain name.

The beauty of this method of flipping is that you don’t necessarily need to find a company that doesn’t have a website. Many companies have registered numerous domain names that all funnel to their central website.

2. Flip by Auction – Again, use a site like GoDaddy.com to register an available domain name that is specific to an industry or geographical location. Then, use a domain auction site like GoDaddy or Sedo to list it.

People who are actively looking for a domain name will browse the listings, find one they like, and place a bid. And your domain name goes to the highest bidder. Think Ebay, only you’re selling domain names. The auction sites take care of all the grunt work for a nominal fee.

3. Flip by Private Listing – This is an interesting avenue for someone looking to get into the domain flipping business more seriously. The first step is to start your own website – a website that will sell domain names. Then you start registering an array of domain names, categorized by industry, geographical location, profession, etc. and then listing those domain names that you have available for sale. I’ve seen some domain names go for over $50,000.

The beauty of this is you can name your price. If you snag a domain name that is simple, direct, and focused on a particular subject, chances are it will command a decent price. By flipping domain names by private listings, you will essentially be in the business of brokering domain names. And it can be a very lucrative business indeed.

You can also sell domains privately through forums and other online gathering places. Just make sure to have good contact info so potential customers can get in touch with you.

Hot Trends Are the Place to Be

A great way to find a good “vein” of domain names is by keeping up with current events and pop culture. Whenever a new gadget hits the market, a big-budget movie is rumored to be made, or the latest pop starlet makes a splash in the media, that’s where you come in. Keep your hand on the pulse, see what’s trending, and be always alert for the next big thing.

Then start snapping up domain names related to that trend. As your fellow online entrepreneurs recognize the money-making potential of the URLs you hold (for ad heavy websites and the like), they’ll be willing to pay you top dollar for the domain names.

Sure it may be $50… or $100… or $500 here and there. But considering you’ve bought the domain for just $10 in most cases – that’s a heckuva profit margin.

And if you think all the good domain names have long been snatched up, think again. The Internet is constantly evolving, growing, and sprouting new branches.

Again, that’s where you come in. Be ready to study the market and do a little prognostication. There’s an element of gambling in flipping domain names, but like any venture that involves gambling the payoffs can be huge, especially since the cost of buying domains is so low.

Let me tell you a little story to show you the potential of domain flipping…

Back in the early days of the Internet, a forward-thinking computer programmer bought the web address computer.com. His plan was to start his own business website but he never got around to it. Instead, after an initial investment of only $40, he sold the domain name to an entrepreneur for a profit of $500,000.

There’s another story of someone buying the domain name beer.com. The major beer makers didn’t take much notice – after all, marketing is all about brand recognition and what could be more general than beer.com? I mean, when you go into a bar, you don’t ask for a beer, you ask for a Budweiser or a Guinness, right?

Well, because of its simplicity, many people found their way to beer.com. That’s when the major brewers took notice and the beer enthusiast who had a simple website called beer.com made a small fortune.

That’s why it’s so important for you to stay up to date with popular culture.

A new fashion trend making the headlines? Grab CapriPantsSale.com (probably a bad example, but I don’t keep up with fashion – you get the idea). Sony coming out with a new video game console? Grab UltimateSonyPlaystation.com. Whatever you think will grab people’s attention has the possibility to make you big money.

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I wish you the best of luck!

John Hollister

P.S. I’ve just given you all the tips and techniques you need to successfully start flipping domain names. But here are a few resources to help you to the road to financial gain.

RESOURCES

Buying Domain Names

http://www.godaddy.com

Setting Up a Built-Out Site

http://www.wordpress.com

Tips for Flipping Domains

http://www.domainsuperstar.com/how-to-flip-domain-names

http://www.unixtips.org/flipping-domain-names-learn-how-to-flip-domain-names-and-profit/

http://www.dotweekly.com/domain-name-flipping-good-or-bad/

Domain Auction Sites

http://www.sedo.com

http://www.flippa.com

https://auctions.godaddy.com/

http://www.afternic.com

http://www.hybriddomainer.com/2011/07/beginners-guide-to-go-daddy-auctions.html

https://www.snapnames.com/

http://www.web-designers-directory.org/articles/10-top-domain-name-auction-sites-18.html


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