How to Make Money by Flipping Domains

Domain flipping has become a highly profitable business, offering opportunities to generate income by buying and selling domain names. Tracing its roots back to 1985 with the registration of the first domain, Symbolics.com, the practice has rapidly expanded, with over 359 million domains registered by early 2024. Much like flipping physical properties, domain flipping involves acquiring underpriced domain names and reselling them at higher prices often leading to significant profits.

However, there’s more to maximizing your potential in this space. By becoming a reseller or investing in reseller hosting, you can open new revenue streams that enhance your domain flipping efforts.

What Is Domain Flipping?

Domain flipping is purchasing a domain name with the aim of selling it later at a higher price, turning a profit in the process.

In practice, domains are traded like online real estate can be highly profitable. Companies and individuals often pay big money for exclusive, especially short, domain names.

Is Domain Flipping Legal?

Domain flipping is legal and a way many earn a living, either full or part-time.

The main concern is avoiding domains that are too similar to existing businesses. It's different from illegal domain squatting, which is done in bad faith.

As long as you steer clear of copyrighted domains, you won't face legal issues.

5 Steps to Flipping Domain Names for Profit

To be a profitable domain flipper, here are some steps you should follow:

1. Finding domains

Start by searching for promising domains that are both affordable and likely to increase in value over time. Utilize various tools like Spamzilla, Domain Hunter Gatherer, and Domainr to find quality domains at lower prices.

You can also explore domain auctions or browse for expired or dropped domain names on sites like ExpiredDomains.net and JustDropped.com.

2. Estimate the domain’s value

Next, choose domains with potential for future value to avoid overpaying for unwanted domains. Here are some criteria your domain should meet:

• Length: Short domains are more sought-after and valuable. Aim for the shortest name possible.

• Memorability: Easy-to-remember names are valuable. Research highly demanded names for ideas.

• Brandability: Domains that are registered but not used, aimed to be sold to specific brands, are very profitable. Use sites like Brand Bucket and Brandroot for ideas.

• SEO Friendliness: Choose SEO-friendly domains with relevant keywords. Domains with keywords that get over 200 searches a month and are bid on in Google ads can sell for high prices.

• Extensions: .com is the most valuable extension, but other extensions like country-specific ones can also be appealing for targeting local markets.

• Backlink Profile: Domains with strong backlink profiles are more expensive. Use tools like Ahrefs to assess a domain's backlink profile.

Read more about the types of domains and their value here.

3. Securing the domain

Buying domains is one of the most critical aspects of domain flipping. Here are some key things to know:

• Choose a Registrar: Research and compare prices across different domain registrars before deciding where to buy and register your domain.

• Check Availability: Use tools like Verpex’s domain availability checker to ensure the domain isn’t trademarked, taken, or in use.

• Purchase and Register: Enter the desired domain name in your chosen registrar's search engine, like Verpex, to buy it. The cost varies by extension and billing cycle. Keep in mind, domains are leased, not owned permanently—you can pay annually, biennially, or every ten years.

• Verify Ownership: Post-purchase, the registrar will email a verification link to confirm your ownership. Click this link to finalize the domain registration.

4. Finding the right buyer

After buying your domains, some client acquisition strategies you should consider are:

• Domain Auctions: Fastest way to sell, usually last 30 days. Use auction sites like GoDaddy, Sedo, Domain.com to attract buyers. If unsold, negotiate post-auction or set a reserve price. May need multiple listings to achieve desired price.

• Contacting Buyers Directly: Sell directly by reaching out to relevant businesses (e.g., comfycafe.com to café owners). Use directories like YellowPages for contact info.

• Domain Marketplaces: Common selling method. List on multiple platforms such as Sedo, Flippa, GoDaddy. Check each marketplace's policies and fees first.

• Domain Redirection: Redirect your domain to its sale listing/auction to increase visibility.

• Domain Parking: Earn from ads placed on your domain while waiting to sell. Good for domains with existing traffic. Providers include Sedo, 1and1.

• "Domain for Sale" Landing Page: Inform visitors of sale with a landing page on your domain. Include a contact form for direct offers.

• Public WHOIS: Make WHOIS info public to increase contactability for sale inquiries, sharing your email and contact details openly.

5. Selling the domain

After following the previous steps and identifying a suitable buyer, the next stage involves finalizing the sale.

To protect against domain fraud, use an escrow service. It serves as a neutral third party to ensure both seller and buyer follow the agreed terms, making transactions safe and smooth.

• Buyer pays the agreed amount to the escrow service.

• Escrow service notifies you to transfer domain ownership upon payment receipt.

• After transfer, escrow service sends you the payment, deducting their fee.

• Escrow service resolves any violations of negotiated terms.

• Providers like Escrow.com, MangoPay, ShieldPay offer escrow services.

You can integrate domain sales into your existing hosting business as a reseller. By offering domain flipping as part of your hosting service packages, you enhance your service offerings and create additional value for your clients, making your business a one-stop shop for online needs.

Role of Resellers in Domain Flipping

1. Bulk Domain Purchasing

Reseller accounts allow access to discounted domain prices, which is a key advantage in domain flipping. With reseller hosting plans, resellers can purchase domains in bulk at lower rates, reducing the cost per domain.

This enables them to build a larger portfolio, increasing the chances of finding high-value domains that can be sold at a profit. Bulk purchasing also improves profit margins, as the initial investment is minimized compared to buying individual domains at standard prices.

2. Reseller Hosting Integration

Reseller hosting not only simplifies domain management but also enhances the potential value of each domain. Resellers can use their hosting resources to build simple websites or landing pages for their domains, making them more attractive to potential buyers.

A domain with an established web presence is often seen as more valuable, allowing resellers to demand higher prices. This integration adds another dimension to domain flipping, offering buyers a complete package that includes a ready-to-use website.

3. Maximising Profits

To maximize profits, resellers can combine domain flipping with additional hosting services. By bundling domains with hosting packages, resellers can provide a more appealing offer to buyers, increasing the overall sale value.

Additionally, resellers can upsell hosting services to buyers after the domain sale, creating a recurring revenue stream. Enhancing domains with SEO-optimized websites or attractive landing pages further boosts their market value, making them more desirable and enabling higher profits from each flip.

Essential Tips for Domain Flipping

• Be patient; domain flipping takes time.

• Stay updated with new domain trends and research regularly.

• Keep expectations realistic; profits may come gradually.

• Learn and improve your skills over time.

• Avoid rushing when selling domains; consider future potential.

• Explore domains beyond .com for potential opportunities.

• Take calculated risks but proceed with caution.

• Find inspiration in others' experiences but forge your own path.

• Embrace mistakes as learning opportunities and keep moving forward.

Risks Involved in Domain Flipping

Domain flipping is low-risk with minimal start-up costs and no need for expensive equipment. Your main expense is the purchase price of domains, so keep costs down and buy wisely.

Be cautious about expecting huge profits; not every domain sells for millions. Aim for realistic profits and gradually build your experience.

How Much Money Do You Need to Start Domain Flipping?

Starting in domain flipping doesn't require much money. You could buy domains for as low as $10 and sell them for much more, or even at a loss.

Setting an initial budget is challenging, but many beginners start with around $500. This allows the purchase of several promising low-cost domains.

Treat domain flipping as a side hustle at first, keeping spending modest and making decisions carefully.

Domain Flipping vs. Website Flipping

Website flipping involves buying and selling websites that already have content, reputation, traffic, earnings, and growth potential.

The value comes from these features.

In contrast, domain flipping focuses primarily on the value of the domain name itself, though it may be part of a website sale in website flipping.

Domain Sniping / Flipping Expired Domains / Domain Catching

Domain drop catching is when buyers snap up domains before the original owners can renew them. There's a grace period of 30 to 90 days for renewal.

This method can be beneficial; you can track and buy valuable expired domains at a low cost if their owners no longer want them.

How Much Money Can You Make from Domain Flipping?

Domain flipping profits vary by person, depending on experience, skill, and luck.

While selling domains for millions is rare, buying a domain for $10 and selling it for $80 can net a $70 profit.

Repeating this process can lead to significant earnings, making it a profitable side business.

Here are a few well-known examples of successful domain flips:

Voice.com: This domain was sold for $30 million in 2019 to a blockchain company called Block.one. It's one of the highest domain name sales ever recorded.

Insurance.com: This domain was sold for $35.6 million in 2020. It's a prime example of how generic, highly searchable keywords can be extremely valuable in the domain-flipping market.

CarInsurance.com: Auctioned for $49.7 million in 2019, this domain is another example of the value of specific, high-demand industry keywords.

Scaling Your Domain Flipping Business

Scaling your business can lead to increased profits and opportunities. Here's how:

• Use automation for domain research, bidding, and listing to save time.

• Diversify your domain portfolio across different industries to reduce risk.

• Seek new domain opportunities for growth.

• Invest in marketing to enhance domain visibility.

• Use online ads, content marketing, and social media to attract buyers.

• Collaborate with other domain flippers and registrars for mutual benefits.

• Form strategic partnerships to access new markets and resources.

The Future of Domain Flipping: Emerging Trends

Stay ahead of the curve and anticipate the future of domain flipping with these emerging trends:

• Analyze market trends for profitable domain investments.

• Assess keyword popularity for demand estimation.

• Review historical sales data for informed decision-making.

• Enjoy enhanced security with blockchain-based domain ownership.

• Benefit from transparent domain transactions.

• Participate in a decentralized, democratic domain ecosystem.

• Explore domains in the virtual reality gaming sector.

• Identify platforms and applications driving VR adoption.

• Invest in domains within the cryptocurrency and blockchain projects.

• Target cryptocurrency exchanges and DeFi domains.

• Invest in eco-friendly product and service domains.

• Focus on domains promoting renewable energy and sustainability.

Frequently Asked Questions

What is domain flipping?

Domain flipping is the practice of getting a domain name as cheap as you can and then selling the domain name to an interested party for more than what you paid.

Is domain flipping dead?

Domain flipping is certainly not dead, and if you get things right, you can still make some good money in the business.

What makes a certain domain valuable?

Valuable domains are usually memorable, easy to spell, pronounce, and short.

What are some popular domain marketplaces?

Popular domain marketplaces include BrandBucket, Efty, Namecheap, Sed, and Flippa.

How do I avoid legal issues when choosing a domain name?

To avoid legal issues, steer clear of trademarked terms or names closely associated with existing businesses. Conduct thorough research to ensure the domain name you choose does not infringe on someone else's intellectual property rights.

Are there specific industries where domain flipping is more profitable?

While domain flipping can be profitable across various industries, sectors like technology, finance, real estate, and healthcare often yield higher returns due to their competitive nature and the demand for premium domain names.

Can I negotiate the price of a domain after purchasing it at an auction?

Yes, you can negotiate the price of a domain after buying it at an auction on some platforms. These platforms may let buyers and sellers discuss and possibly change the price after the sale. Always check and follow the platform's rules for post-sale negotiations.