Earn Money Online Buying and Selling Domain Names
We use them all the time but many people don't realize that there is big money in domain names - it is just not all that easy to get your hands on it !
Buying and selling domain names is big business - domain names can be worth millions, and the market is open to anybody with a bit of drive and a dictionary.
Domain names are a commodity that can be traded like anything else, the aim being of course to buy a name for a given price and then to sell it on for more than you paid for it, sometimes a lot more. For example you could buy a name no-one has registered, such as ZitBusters.com (except that one is registered now), then list it for sale on one of the online domain name auction sites e.g. Sedo or Afternic (or even eBay if you prefer something faster). A prospective buyer sees your domain name and offers you large amounts of cash for it. So much for the theory, in practice it is a bit harder than it looks.
Buying a domain name is easy enough. You either register a name no-one has registered with a place like GoDaddy, or you find a name someone else has already registered and then make them an offer for it, you can find these names at places like Sedo, Afternic, Ebay, Bido or in forum sites such as Namepros.
Selling a domain name is however a bit harder. You will probably need to invest a lot of time and energy trying to market it. It is rare that someone will happen to stumble across your domain name and and find out your e-mail address then contact you to buy it, although it does occasionally happen.
You will usually have to show some initiative to try and sell the name yourself to someone that you think may be interested in it, for example Zitbusters would be a good name for a company selling acne treatment products.
One way of doing this is to fire off e-mails to people you think may be interested in your name. If you are lucky or you have a name that is clearly a very good investment then you will receive an answer saying something like "How much do you want for your name?". This is when the negotiations begin.
So what are the good domain names you might like to buy or invest in ? By and large they are dot coms (.coms are sold for about ten times the price of .nets) plus it is better to get a generic name e.g. socks.com, vodka.com, cars.com. Unfortunately these cost far too much i.e. millions of dollars ! So you are probably better off going for something slightly less generic i.e. something with two words. One word dotcoms are far too expensive and three word dotcoms don't sell for very high prices, so, if you can, find a good two-word dotcom.
How much are one-word dot coms worth? The highest sale in 2008 was Fund.com which sold for $9,9995,950 million, DataRecovery.com was second at $1,659,000 Invest.com came in at number 5 and sold for $1.015,000, NewlyWeds.com was number 65 and sold for $130,000. For all the major sales reported check out DNJournal.com
In 2009 the highest selling dotcom so far is toys.com which sold for $5,100,000 - quite cheap as it was sold at a bankruptcy auction. Candy.com sold for $3,000,000 and fly.com sold for $1,760,000
If you have ever watched the iReport channel on CNN you may be interested to learn that CNN bought that particular domain name from self-styled 'Domain King' Rick Schwartz for the tidy sum of $750,000. Rick Schwartz is one of the most successful domainers in the domain name industry. Other important figures to look out for are Kevin Ham, whose portfolio of domain names are worth around $300 million, Frank Schilling, Rick Latona, Sahar, Yun Ye who sold his portfolio of domain names for $164 million and many more. They all are different but they all have one thing in common, they got where they are today by the simple process of buying domain names, keeping them for a while and then selling them for a profit.
So what sort of domain names would be a good investment ? As already mentioned, generic names are the best but practically all of the dot coms have already been bought. This means that if you want a good one or two-word dot com you will probably have to buy it from the person who owns it already. Alternatively you can analyze the long lists of names that are dropping (not being renewed) at places like Snapnames and TDNam. Or you can try and discover a gem that no-one else has registered (very unlikely).
A word of warning, some registrars cannot be trusted and if there software notes that you have looked at a name but not registered it, they will 'reserve' it for you, which really means that they will block it and sell it to you at an inflated price.
Do a search in Google on - network solution front running for more details of that particular shady practice.
If you do find a good name that hasn't been registered it is a good idea to register it quickly as there are few secrets on the Internet. Registering a dot com costs around $10, less if you use coupon codes at places like Godaddy - see Godaddy coupon codes . It is also worth bearing in mind that there is a five day 'grace period' during which you can change your mind and if you ask nicely registrars will often cancel your domain name and refund the fee if you find you non longer want to keep it.
Steer clear of trademarked names i.e. names containing Google, Microsoft, Gucci etc... you will only cause yourself a lot of trouble.
While waiting to sell your name you can always develop it into a blog or mini-site to bring in some revenue. You used to be able to 'park' domain names on ad. sites and get some money that way. but the revenue shave become so low it is hardly worth the effort.
So to sum up - there is a lot of money to be made still buying and selling domain names, but it is not particularly easy and does require some effort. For more information about the whole business check out forums like NamePros and to see the prices domain names can command check out DNSalePrice.