How I Make Money Buying And Selling Domain Names

For my initial post on this blog, what better way to start out than to offer an in depth guide on making money buying and selling domain names.

I got started investing in domains in early 2009. Since that time, I have learned a lot from my experiences, as well as from tips other domain investors have shared.

These are the methods that I use. Many others use very different techniques. My suggestion is take this information and combine it with what you already know, and carve your own path. It is a competitive market so try and be creative to find different angles on things.

I don’t know your knowledge or experience level. You may already know quite a bit about domain names or you may know nothing at all. With that being said, I am going to start with the basics, and explain everything I know about domain investing.

Before We Get Started…

I would like to first point out that I am by no means wealthy from flipping domains. However, I am able to make a consistent, steady profit each month from doing so. If you are looking to find out how to become a millionaire selling domains, you should look elsewhere. If you want to learn an interesting, exciting way to generate some additional income, then you are in the right place.

Second, I concentrate on “keyword rich” domains as opposed to brandable type names. For example, I prefer domains like CarParts.com, NewYorkLawyer.com, or MarketingSoftware.com. These types of domains have search volume, cost per click, and a healthy list of targeted potential end users (specific people or companies who may be interested in purchasing the domain).

On the other hand, there are brandable domains. These types of names continue to sell better than keyword rich names over the last year or so. If you look at the weekly sales lists, they are full of brandable domains. Some examples of brandable domains include BlueLion.com, Vizio.com, ClickHotel.com, MagicMarket.com, etc. Generally, these are one or two words and under 15 characters long.

Brandable domains are great, however, they don’t work for my business model (i.e. someone with a limited budget). The problem with brandable domains is that, generally there are not clear cut end users to target. Sure, you can tell that many of them are better than others. But, there is a lot of chance involved in the sales that take place.

Usually, the people who are selling these types of domains own thousands of domain names and it is purely a numbers game. That business model doesn’t work for me or others who have a limited budget to work with. Hopefully that makes sense.

One more very important point before we get started: I buy ninety percent .com domains. I’ve made, and continue to make, a number of sales in other extensions (mostly .net and .org), but I recommend sticking primarily with .com. Especially now, since there are over 1000 new extensions set to be released over the next year or so.

Education

One of the great things about the domain industry is that there is a wealth of learning material available. If you are new to buying and selling domain names, I recommend spending some time learning before investing any of your hard earned money. Below are some of my favorite websites to read and learn about domains:

Domaining.com – This is a blog feed of all of the top domain blogs. I read this daily before bed and at lunch.

DomainSherpa.com – Michael Cyger does a great job interviewing some of the industry’s brightest and most well known figures. Guests he has interviewed include John Ferber, Frank Schilling, Rich Schwartz and more.

ElliotsBlog.com – My favorite of all the domain blogs. Elliot focuses on keyword rich domains, like I described above. He’s one of the more successful domainers today and shares many of his methods and tips on his blog.

NamePros.com – When I first started out I spent a lot more time on here, but now I find it to be more of a waste of time. However, there is a section where others share their recent sales, so I check back here on occasion to see what others have sold. I also occasionally list a few domains for sale at this forum. There is another domain forum at DNForum.com.

TheArtOfTheName.com – This video blog is produced by the owner of DNForum, Adam Dicker. He shares a lot of good selling and monetization tips on here. He’s also known to be very helpful to domainers of all levels.

TheDomains.com – A very good domain blog in its own right. However, the reason I like it is because it is the first site to publish the weekly domain sales from Sedo and Afternic on Tuesday afternoons. Keeping an eye on what sells is a great way to learn about the value of domains. You can also find information on domain sales at Ron Jackson’s DNJournal.com and NameBio.com.

Domain Tools

Google Adwords Keyword Tool Planner- I use this everyday to check search volume and cost per click. It’s not 100% accurate, but it’s pretty close.

DomainTools.com – I mostly use it for whois look ups (finding end user’s email addresses) and occasionally their past sales data. However, paid members have access to many more features.

FreshDrop.com – I  use this tool everyday to scan the different lists. It used to cost $99 a month, but now it is only $19.95, which I find to be a pretty good deal. You can filter the lists using a number of different settings. The main filters I use are: CPC, Extensions Registered In, Age, Bids, and Searches. The “extensions registered in” is probably my favorite, since generally if a domain is good, it will be registered in several extensions (e.g. .org, net, etc.).

Estibot.com – I subscribed to this service for about 3 years and just recently canceled. I like the service, but unfortunately I didn’t think it was worth the $50 a month that I was paying. I do miss the bulk appraisals feature. It is not entirely accurate, but it does help give a good estimate on the search volume and cost per click. It also shows the extensions registered.

Dropping.com – This is a newer service by the creators of Estibot.com. I’ve read several good reviews. It is similar to FreshDrop, but it costs more money per month. They do offer a free seven day trial.

DomainQuestions.com – New to domaining and have a question you need answered? A lot of times you can find it here.

Domain Buying

Throughout the day I scan four different lists of domains on FreshDrop: Pending Delete, GoDaddy Auctions, NameJet PreRelease, and SnapNames Expiring. I keep a notepad open and when I see a name that I think has potential I will add it to my list. When I am done scanning each list, I will go back and take a closer look at the names on my list and check the results on Google. I will then decide if I want to purchase or backorder the domain or not.

Pending Delete

If you plan to backorder a pending delete domain, there is quite a bit of information you need to know to increase your chances of acquiring the name. Each site has different deadlines in which a backorder needs to be placed. If I find a domain I really like I will backorder the domain at three different sites: SnapNames, NameJet, and BackorderZone. BackorderZone is relatively new, but they cost a little less and catch a few names here and there. The price for a SnapNames backorder is $69, NameJet $59, BackorderZone $49.

The backorder deadline for each is: SnapNames: 1:45 pm EST, NameJet 12:00 pm EST, I’m not sure on BackorderZone, I try and have my backorder in by 12:00 pm EST. The pending delete domains drop from 2:00 – 3:15 EST each day.Try to wait as late as possible to backorder a domain in order to not draw attention to the name if there are no other bidders.

If there is a pending delete domain that I like, but not quite as much and don’t think it is worth spending as much, I backorder the domain on GoDaddy. It costs around $14 when using a coupon code. Always check for coupon codes when purchasing anything on GoDaddy. Obviously GoDaddy won’t catch as many as the other services, but I’ve done well with the names I’ve been able to get using their service.

GoDaddy Auctions

GoDaddy auctions is one of my favorite places to buy domains. The auctions take place everyday between approximately 12:00 and 5:00 p.m. EST. Names start at $12. If you win a name there you will also have to pay a new year of registration (make sure to use a GoDaddy promo code), so add another $8 to whatever price you win the domain at. If a name isn’t purchased at $12, it will go down in price increments until it reaches $5.

NameJet PreRelease

NameJet PreRelease usually has some of the best domains available. When you backorder a domain here, it needs to be done by 11:00 EST. It will cost at least $69 to purchase a domain, depending on the amount of people backordering it. One thing I don’t like about the domains here is that if you win one, many times it will land at Enom.com and it will be locked for 42 days. So you can not attempt to sell it until the lock expires.

SnapNames

SnapNames Expiring has a lot of good domains, as well. Backorders need to be placed by 12:00 a.m. EST. Backorders cost $69. If a name is backordered by more than one person at either SnapNames or NameJet, than a 3 day private auction will be held.

One final note here is that domains purchased at NameJet PreRelease, SnapNames Expiring, and GoDaddy Auctions will keep their age. Pending Delete domains will no longer have any age and will be reset to zero. Age isn’t a huge factor, but having some age is better to have than none at all. Generally, better domains will have some age.

What Type Of Domains Do I Buy?

As I mentioned, I prefer to buy keyword rich domains. Services, products, professions, etc. In addition, I also like to buy geo type names (i.e. names with a city or state modifier usually combined with a service or profession).

Some examples of these are: LasVegasLimos.com, AustinRoofing.com, DentistChicago.com, and WebDesignBoston.com. I do not own, nor have I sold any of those names, they are just examples of quality geo names.

Around 70% of the domains I sold last year were geo related domains. Generally speaking, it is better to have the city or state in the front, but I have sold plenty with the city or state on the end. One thing I like about these domains is that many investors are not interested in buying them. I have sold plenty of them and last year one of my better sales was a domain with the service on the front with the city on the end.

Domain Selling

Once I have acquired a domain, I then go about locating potential end users. I will enter the phrase into Google in quotes (e.g. “New Jersey contractor” if I owned the domain NewJerseyContractor.com) and go through all of the websites that come up on approximately the first five pages of Google. I will look for their contact information on their website and I will also enter their domain into DomainTools.com to get the information.

I will then search the term without quotes and occasionally will search some related terms. In addition, I will also check to see if the domain is registered in other extensions. I like to come up with around 20-50 potential buyers for each domain. Some prefer to find more, but this number has worked well for me.

Needless to say, this is not my favorite part of the job because it is tedious and boring. That is why some outsource it or use tools to do the work. However, it’s also one of the most important parts of selling domain names, which is why I usually do it myself.

Why is it one of the most important aspects of the job? Because you need to do your very best to get to the decision maker of the company and that can be challenging at times. You don’t want your emails ending up with a secretary or an assistant who will just delete it in a matter of seconds. If you look hard enough, you can usually find the right person’s contact information.

Once I gather all of the contact information, I will send out emails to the potential end users. Unlike some others, I keep my email pretty simple and to the point. Others add more information and create a longer letter. You can experiment with different types of emails to see what works best. Keeping it simple has worked pretty well for me.

I always contact the companies via email. Others recommend using the phone, as they claim this helps you in the sales process. Do whatever you are most comfortable with. If the domain is good enough, it will sell itself.

It is also worth noting that I have a small, basic WordPress website set up and an email address associated with it. On the website I have some general information about the advantages of owning quality domain names and my company. I do think it can only help to have a small website set up to help establish trust with buyers.

Additional Selling Tips

One other technique I just learned of recently is using DomainTools.com to find potential buyers by entering your keywords or domain in their Domain Search Tool. It will then list all of the domains registered with your keywords or domain. For example, there are literally thousands of other domains registered containing the words “car parts”, which speaks to the quality of the domain CarParts.com.

Perhaps, most importantly when selling domains, is to be realistic with your sales price. Often times, many domain investors will overvalue their domains. This is one of the biggest mistakes you can make.

Most of my sales fall between the $99 and $1000 range (my sweet spot is $200-$500). If you overprice your domains and try and hold out for the top dollar price, you will often be left holding the domain, when you could have made a smaller sale and reinvested the profits. On the other hand, you don’t want to sell too cheap. It is a fine line.

Another important thing is to list your domains at as many venues as possible to increase your chance of selling your names. Not all domains you purchase to flip will sell immediately or at all. However, you can greatly help your chances of selling a domain by listing it for sale at Sedo, Afternic, GoDaddy premium listings, and/or GoDaddy auctions. Providing a buy it now price, as opposed to leaving it at “make an offer” can also help your chances of making a sale.

An additional domain flipping technique that has worked for me is sometimes you might see a domain similar to yours that sells and you can contact the buyer to see if they would be interested in purchasing your domain. However, use your best judgement when doing this and only attempt this with high quality domains. Many people attempt to do this with low quality domains, which turns out to be a waste of everyone’s time. That being said, I have used this technique a number of times to sell a domain.

Conclusion

I did my best to explain everything I know about buying and selling domains for profit. However, I imagine if you are new to domain names, you probably still have some questions. I welcome you to ask any questions or add any comments that you have in the section below and I will answer the best I possibly can.


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