As promised last week, I’m going to be outlining in a series of posts how you can make money by buying and selling (flipping) domains. I’ll also be covering domain parking, development and Website flipping as the series progresses but we’re going to start with the basics.
Expectations:
Let’s get one thing clear from the start – domain flipping is almost certainly NOT going to earn you a fortune, but it can very easily (and at little financial risk) bring in a steady income stream. When you are starting out the trick is to think ‘little and often’ – i.e. buy low and sell on for a bit more, don’t hold out for huge sales (unless you’ve got yourself a killer domain). A few sales a month will bring in a steady income, a few sales a week will let you build up your funds and allow you to start aiming for bigger deals. Take it easy though, learn the ropes and get a feel for the market and ways to trade – you only need a few dollars to get started.
Yes, there are huge domain sales reported each week – but don’t go into this thinking that you’re going to stumble across a great domain name that no-one else has thought of and walk off with a fortune. That ain’t gonna happen for 99.9% of us. However, if you do make a million on your first sale, think of me when you’re banking that cheque.
Domains
What kind of domain names should you be dealing in? do you know about the major domain name extensions and the various country-specific extensions?
When starting domain speculation/flipping, stay with the major top-level domain extensions (i.e. .com, .net, .org, .info). These are the ones that are universally ‘accepted’, have a higher resell value (.com in particular) and aren’t as subject to the various rules and regulations assocaited with country specific domain extensions such as .co.uk, .com.au etc.
These top-level domains will be the easiest to deal in when you are starting out. Competition amongst the various registrars is also intense which is good for you as you can shop around for deals when registering new domains or transferring between registrars (more about that later).
- Price wise, new .coms can be picked up for as little as $6 (generally around the $7-$9 mark), .info’s can be purchased new for as little as $2, although they have a lower ‘resell’ value. They are renewable on an annual basis.
Your focus:
Are you going to be looking to deal in certain types of domain, those associated with a certain niche or subject that you are familiar with or are you going to be a general trader picking up or registering a domain regardless of its market?
- Bear in mind that domain names are subject to trademark infringement, your details (as a domain owner) CAN be found and you can be subject to legal action if you knowingly flout the law. Some level of research and common sense is required when buying and selling.
Register or Buy:
Think also about whether you want to register new domains from scratch or buy existing domain names that others have put up for sale. In all honesty, you will be doing a mixture of the two – about 80% of the domains I pick up are purchased on forums, the remaining 20% I’ll register myself, either from ‘drop lists’ or through my own research (more later).
Registrars:
Do you know about the large variations in pricing that the various domain registrars charge? were you aware that the major registrars often promote special deals or have coupons that can save you huge amounts on new registration?
There are many, many registrars but you will find as you trawl around the forums, that most of the domains you see will be registered at one of a few main players. These include (in no particular order):
They all have their fans and their detractors, but get used to the idea that you will be dealing with all of them at some point. They all operate in the same basic fashion, allowing you to set up a free account where you can register new domains and (more often) do what’s called a ‘push’ which is an internal transfer between accounts. That means if you buy an existing domain that is registered at GoDaddy, the seller can perform a free ‘push’ from their account to yours. You can also transfer domains between registrars if you want to consolidate your domains into your preferred registrar.
The market:
All of the registrar companies allow you to search for and register new domains, and there are various tools out there that will allow you to search for available domain names. As I said earlier, I do register a certain proportion of my domains myself, but the majority are purchased via Forums. Even if you prefer to register your own domains, the Forums are still an invaluable tool to see what kind of domains are in demand at any time, how livley a particular niche is, what the current prices are etc.
Now, what I’m talking about at the moment is basically the ‘reseller’ market. That is, you will be buying from and selling to other domainers, developers, webmasters etc. That means that the prices involved are lower (as a rule). You are dealing within ‘the trade’. The Forums I’m going to list below are inhabited by people like me and you – people who want to buy and sell domains/websites and make a few dollars. You can certainly pick up bargains and you can certainly get good sales, but you shouldn’t expect to go in there asking hyper-inflated prices for your domains.
There are various ‘auction’ sites where you can try and get a better price for your domain, and you can also try to pitch your domains direct to potential buyers, but the bread and butter of your domaining business will be done in the Forums.
Most of my dealing is done on:
DP is a more broad-based Forum covering a lot of topics – domain and website sales being two of them. NamePros is more closely focussed on domain and website trading. DP has more volume, NP has useful forums on available and expired domain names. DP is more prone to spammers and scammers but I’ve picked up some absolute bargains there.
The groundwork:
Now, before you go rushing headlong into anything there are various things you will have to do first:
- set an intial budget for yourself (don’t worry, this can be $30-$40 or even less – I regularly pick up domains for $1 or $2)
- set yourself up at PayPal and/or MoneyBookers. Most deals on the Forums are done using PayPal funds – OK, so we don’t all like PayPal – tough, get over it. Moneybookers is an option some traders use, while for high-value sales an escrow service should be used, but we won’t be worrying about that yet.
- create accounts at the major registrars (GoDaddy, NameCheap etc). If you see that bargain domain you want to buy, you need to have your registrar account set up and ready waiting to receive the domain. Most of these registrars will now accept PayPal as a payment method if you don’t have a credit card.
- register at DigitalPoint, NamePros etc. Don’t rush in there trying to buy and sell domains straight off – as a new member you will have no rep and no ‘trader’ rating. You have to build up some trust there, so spend some time introducing yourself, participating in threads in a useful way (no spamming or highjacking) and, more importantly, look through the various ‘for sale’ and ‘wanted’ forums, getting a feel for the market and prices.
That’s it for now, just to get people started. Get your accounts set up, join the forums, look around, get to know the market and start building yourself a rep. It’ll be a lot easier to deal with people once you’ve done that.
Next time I’ll look in a bit more detail at the various registrars, coupons, useful resources for ‘dropped’ domains and working the forums.
Thanks
Dave
Like I said, there are no strings attached other than a requirement to make a constructive comment during the month of September, on any post published in August or September. I want to try and maintain a level of discussion on Internet Babel, so I look forward to getting some feedback.
