Domain Investing

Domain Investing | How to Make Money with Domain Names

Domain investing is loved by many entrepreneurs online and if you want to make money at home, domain investing/ domaining/ flipping domains might be perfect for you.

What is domain investing?

Domain investing is simply as follows:

  1. Buying domains at a low price but with a perceived value.
  2. Holding into it and locate the right buyer.
  3. Sell the domains at a markup.
Steps on how domain investing works
Steps on How Domain Investing Works

When you register a domain, you are investing in digital property which might get sold for thousands, hundred thousand, or even more.

Is domain investing worth it?

There is a big stake associated with domain names which makes the whole game lucrative for stakeholders (domain name registrars like GoDaddy and Namecheap). Suppose there is someone who had booked a domain named Amazon.in before the US-based amazon.com (1995) became a success story and went global and then Amazon penetrated India (2012), the one who was holding Amazon.in could have made a windfall profit while transferring ownership of the domain to Amazon.

Confused Woman
Is domain investing worth it?

Imagine how CarInsurance.com got sold in 2010 in the amount of $49.7 million and on other pure domain sales like Insurance.com, VacationRentals.com, and many more, it is proof that domain investing is really worth it and there are lots of opportunities to invest in good domains.

How to choose a domain name?

Choose a domain name that is short, easy to type and pronounced, memorable, brandable, a dot(.) com domain, or if possible, a keyword domain.

There are lots of investors who are willing to pay for a good domain name. Check our detailed guide to buy a domain here.

Further reading: How to Choose a Domain Name | Detailed Guide

Building a solid domain portfolio

It takes a lot of time to build a solid domain portfolio. You need to invest substantially in researching and purchasing domain names that may be popular or high in value in the near future. Many domain investors have quality domains and hope that those will highly appreciate in value in the near future.

Buying and selling domain names

There are lots of ways you can buy and sell domain names. Either you buy a domain directly from registrars (for example is Bluehost) or check traded domains on domain marketplaces (for example is Negotiante).

Investing in domains is cheaper when it is bought on registrars. However, registered good domains usually can be found on domains marketplaces.

How to sell a domain name

Domains can be sold using the 3 methods as follow:

a. Fixed price method

This method is where the sellers generally set a fixed price for the domains that they want to sell. It is well suited to those sellers who are not in rush to make the sale.

b. Auctions

The sellers list their domain names for auction usually at marketplaces like negotiante.com. On this method, the buyers make their highest bids to purchase the domain on auction.

c. Offer method

This method is where there is no price set for the domain and is waiting the seller is waiting for offers from interested buyers. This may be well suited for niche domains where the exact value of the domain isn’t well known.

Risk of domain investing

There are many risks when you are investing on domain names and the most common are:

Liquidity risk

Usually, cash and other cash equivalents like stocks and bonds can be easily traded online. Unlike domains, it is hard to sell and to mention that you have to pay every year the renewal fees to your domain registrar. The sale may go through months, a year, or even more.

Valuation

Unlike stocks and bonds which can be easily valued, domain names are difficult to value. Usually, domain price estimator websites or appraisers provide hefty or unreliable valuations on the domain.

Legality

Buying domain names that are already trademarked can result to a lawsuit and defending this can be very costly. Additionally, someone can file a lawsuit for a domain name that they think that they have the right to own.

Conclusion

Like any other investment, there are risks associated with domain names. However, for a careful and committed entrepreneurs, domains investing can be a way to earn substantially high returns.

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