Buying and Selling Domain Names
As we mentioned in domain name squatting, nefarious people buy copyrighted domain names with the intention of selling them for profit later or to leverage a copyrighted brand (like OscarWinners2012.com as an example) to get traffic and make a quick buck from advertising. This is illegal in the US.
However, investing in domain names like you would property is totally fine and is known as “domaining.”
In the domain world, some domains are worth well more than others. It’s a lot like online real estate. Imagine how wealthy you would be if you registered onlinerealestate.com, sex.com, cellphones.com, ringtones.com, or blue.com back in the 1990′s or early 2000′s.
You would be a multi-millionaire.
What domain names sell in the first place?
Those were all classic examples of selling domains for a huge profit. But what about in today’s market? What exactly is realistic? I would group domain names into 6 main categories if you’re goal is to sell:
- Generic words
- Brandable (NOT copyrighted already obviously)
- Keyword rich
Investing in any of these domain names requires experience, knowledge and being able to identify trends. Investing in domains is about finding opportunities and proverbially buying in an up and coming area as opposed to buying in say a desert.
Once you understand what is selling in each category, you can invest and play the waiting game. Buying domain names that you identify as under market value to then later turn around and sell for a profit.
Generic domains mean domain names with no specific related product or service. Amazon.com is a perfect example. Here are some recent sales:
- Pedal.com – Bought in 2011 for $8,100 / sold in 2015 for $25,000
- Welcome.co.uk – Bought in 2011 for $2,500 / sold in 2016 for $11,700
- Nerd.org – Bought in Oct 2016 for $1,744 / Sold Dec 2016 for $8,999
Domains associated with a product or service I would describe as keyword domain names. Think books.com or BostonApartments.com as an example. You know exactly what you’re going to get when visiting these websites because they are so closely tied to a product or service. Here are some recent sales:
- LotterService.com – Bought in 2015 for $151 / sold in 2016 for $7,000
- ForexAccount.com – Bought in 2016 for $7,605 / solid in 2017 for $55,000
- LuxuryLodges.co.uk -Bought in August 2016 for $1,268 / Sold in September 206 for $8,956
Domains that could be turned into brand. NOT a copyrighted brand already. Don’t cybersquat. Here are some exampes:
- EarthHero.org – Bought in 2015 for $121 / sold in 2016 for $5,000
- NeverFail.com – Bought in 2015 for $2,900 / sold in 2016 for $150,000 (wow!)
A bunch of random letters together. The shorter, the better. Instead of websitecreativepro.com, I could get WCP.com. WCP.com by itself means nothing, but it has value to someone else. Same for international business machines (IBM.com). The advantage of acronyms is that thy’re short, easy to remember and easy to type into a web browser. Here are some examples:
- JT.tv – Bought in 2011 for $525 / sold in 2015 for $6,100
- TCP.com – Bought in 2011 for $18,500 / sold in 2016 for $133,000
- HB.de – Bought in 2011 for $5,100 / sold in 2012 for $34,320
Numerics are simply domain names that are made up of entirely numbers. One of the most popular examples of this is the Chinese site 360.cn.
- 1.gg – Bought in 2011 for$1,007 / sold in 2016 for $7,655
- 8878.net – Bought in 2014 for $1,075 / sold in 2016 for $14,926
- 9.pe – Bought in 2015 for $2,094 / sold in 2016 for $5,862
Domain names with mixed letters and numbers! This appears to be a growing vertical, but not quite as popular as numerics or acronyms. Here are some examples:
- k6.io – Bought in 2016 for $104 / sold in 2017 for $3,000
- hr4.com – Bought in 2015 for $780 / sold in 2016 for $5,400
- n1.de – Bought in 2011 for $2,900 / sold in 2011 for $12,330
How to sell your domain name
With selling your domain it will happen in one of two ways. The first way is that you will be contacted by a potential buyer for your domain name. The second way is to put your domain name up for sale in a marketplace and wait for a buyer.
If you intend on selling a domain name, make sure your whois contact information is correct and that it’s publicly available. Namecheap.com now provides it’s users with free “whois guard” but if you’re selling your domain name you want to make sure you turn this off so buyers can do a whois search on your domain and find a contact email address.
Apart from being contacted by a potential buyer or broker, you’ll need to put your domain name up for sale:
1 ) First figure out how much your domain name is potentially worth. You can put your domain up for sale at any price you wish but it’s best to get an idea for how much similar domain names are selling for. Checkout websites like Namebio.com and marketplaces to see what has sold.
2) Put your domain name up for sale somewhere! There are numerous popular market places you can do this. Here are the most popular:
You can also contact a domain broker to sell your domain on your behalf. Do your due diligence on anyone you work with. Again, you don’t need a broker, they can just help you sell a domain more quickly and easily. Once your domain is listed, make it as enticing as possible. Does it get traffic? Any direct searches? Who is the ideal buyer?
3) Use an escrow service to accept payment. Proper markeplaces like Flippa already have this built in, but if you’re using a site like ebay, escrow will help you avoid getting scammed.
4) You’ll then need to transfer the domain to the buyer so the domain name become part of their account at their domain name registrar.
Selling a domain name is not too complicated. It’s simply a matter of buying the right domain which is priced below market value and selling it at a higher price.