If you’re looking for a relatively easy way to make money online, why not try domain flipping? Although it has a bit of a controversial reputation, especially when questionable flippers purchase and sell recently expired domains, domain flipping is an entirely legal way to make money without having to make a significant initial investment.
If you’ve heard of house flipping, domain flipping is an easy concept to grasp. Domain names are the easy-to-remember and brand-specific addresses you type into a web browser to access a website, and certain domains are worth a lot of money. Domain flippers buy in-demand domain names for as little as possible and then sell them on for a profit – all without having to do anything to the domain name to increase its value.
Sounds like money for nothing, right? Unfortunately, you’re not guaranteed to make money with domain flipping. To be able to sell domain names for a profit, you need to know how to identify valuable domains, how to buy them at the right time, and then how to attract the attention of interested buyers. In this article, we’ll discuss why domain flipping is worthwhile, how to start in just five easy steps, and what you should be aware of before you buy your first domain.
Why should you start flipping domain names?
Domain flipping can be very lucrative over time, but what sets it apart from other online side hustles?
1. Low start-up costs
Your domain flipping efforts could develop from a small hobby to a profitable side hustle without a large, risky investment. In the beginning, you could invest £10 or so into a domain name and make a decent profit, or you can opt for multiple cheap domain names for as little as £1 each. These cheap domain names are unlikely to be very valuable, but even a small amount of profit could be invested back into your domain flipping business to help you buy more attractive domains.
Over time, you could invest in a larger portfolio of domain names and boost your profits. You’ll also be able to invest in more risky domain names, such as more expensive ones or those relevant to emerging trends which could potentially become very popular in the future.
2. Low barrier to entry
Since a domain flipper doesn’t need to do anything to the domains to increase their value once bought, this online side hustle or business has a low barrier to entry. Anyone can learn how to buy and sell domain names – simply read our helpful guides on what a domain name is, how to buy a domain name, how to sell a domain name, and domain management to get an understanding of the basics.
More skill is required when it comes to evaluating domain names and deciding when to sell, but this is something that can be taught or simply learned along the way. If you want to develop your skills before getting started, we would recommend getting familiar with domain appraisal tools, domain auction sites and domain marketplaces to look at which domain names are selling well. You can even find online courses on domain flipping, but many of these courses won’t be free.
3. High potential profits
If you invest in the right domain at the right time, you could make a huge amount of profit with a single sale. Domain names have become increasingly valuable as more consumers turn to ecommerce over traditional shopping, leading to millions of domain registrations. In fact, 350 million domain names were active on the world wide web in the fourth quarter of 2022, which is an increase of 0.5 million domain name registrations compared to the third quarter of 2022. This means domain flippers have plenty of opportunities to sell domains.
Plus, these domain sales can sometimes be extremely profitable. High-value domains have even sold for millions of dollars in the past – the largest domain sale ever was Cars.com for $872 million in 2014! Although you might not be making millions yourself, you can make a lot of money if you’re able to predict future trends and demand. For example, if you can predict future trends in developing areas like cryptocurrency and AI, you could purchase a relevant domain for cheap, hold onto it while demand grows, and then sell it for a profit when the domain becomes much more popular.
So, if you think you have an eye for online trends and have the patience needed to wait for demand to grow, domain flipping could become a fantastic career for you. Or, if you’re just hoping to buy a few domains here or there, domain flipping could be a lucrative side hustle that doesn’t demand a lot of time or effort.
How to start domain flipping
Interested in becoming a domain flipper? There are just five basic steps you need to follow to complete a successful domain flip. Let’s go through them below:
1. Search for a domain name
The first thing you need to do is perform some research on current domain names on the market. This will show you what’s currently popular, what certain domains are selling for, and what niches you should focus on.
The perfect domain names for a domain flipper are those that are inexpensive to purchase but can be sold for a good profit. Just as unpopular domain names are undesirable because they won’t attract much attention from potential buyers, extremely popular domain names aren’t usually what you’re looking for as they can be very expensive to buy.
So what should you be searching for? We would recommend looking for domains in a particular niche you’re familiar with, such as a certain industry or a local area. These domains won’t be too popular with a broad audience, but within their niche, they can be very sought after by some buyers. This means you can snap them up for a good price and then sell for a hefty profit – as long as you understand the target audience and what they’re willing to spend.
To perform your initial market research, you should look at domain auctions and domain marketplaces to assess the current state of the market. Search for terms related to specific industries you’re interested in to narrow down your investigation and find a promising domain.
2. Evaluate your domain
Once you think you’ve found a good domain name or a list of promising domain names, it’s time to look at these domains in greater detail. Before purchasing a domain, you need to estimate its market value to determine whether you’re likely to make a profit on it. Several factors can influence the value of a domain name, including:
- Length. Shorter domains are much easier to remember and provide much better brand recognition for consumers, making them more valuable and in-demand. However, these domains are also pretty expensive to buy, so you may need to make a larger and riskier investment.
- TLD. Certain TLDs (top-level domains) like .com and .org are more well-established and popular than others, which means that domains with these extensions are usually more valuable. Some niche TLDs like .business can be even more valuable to certain buyers, but they have less wide-ranging appeal and can be pretty expensive to buy.
- Existing traffic. Domains with a lot of existing traffic can be sold for more money, but again, they’re also more expensive to initially purchase.
- Search engine optimisation (SEO). Keyword-friendly domains can boost a site’s search engine rankings, which makes them more valuable on the domain market. If the domain contains a keyword with at least 200 searches per month, this can be very appealing to buyers.
- Niche. Businesses prefer relevant domains, so industry-specific or local domains can be very attractive to certain buyers.
- Expired domains. Recently expired domains can be a great find, especially if they have strong page authority and a powerful backlink profile. Plus, they can sometimes be acquired cheaply if the owner is no longer interested in them.
- New domains. Brand new domains won’t have any pre-existing traffic or page authority, but they’re cheaper and easier to find. These domains also don’t have a negative history attached to them, such as Google penalties or blacklisting.
To help you evaluate your chosen domain name, there are plenty of domain appraisal tools online that can give you an estimate of how much your domain is worth. However, bear in mind that this estimate is not a guarantee – you still need to find a buyer who’s willing to pay that price or more.
In addition, you should use sites like NameBio to look at the sale history of similar domain names, such as others in your chosen niche. This will give you an indication of how much profit you can make and how the market has changed over time.
3. Register the domain name
After you’ve chosen and evaluated a domain name, it’s time to register it with an official domain registrar. A domain registrar is an organisation that’s authorised by Internet Corporation for Assigned Names and Numbers (ICANN) to sell domain names. When you buy a domain name through an official domain registrar, they will then pass on the registration information to ICANN. After this, you’re the official owner of the domain name.
But how do you choose the right domain registrar? If you look at ICANN’s list of accredited registrars, you’ll see that there are thousands to choose from. Here are some important qualities you should look out for.
- Price. Make sure you compare the prices of multiple registrars so you can get the cheapest deal possible – this will maximise your profit when it’s time to sell.
- Renewal policy. No one can purchase a domain forever. All domain registrations have an expiration date, but you can continue to renew your domain name for as long as you want. If you think you’ll have to hang on to a domain for a long time before selling, make sure you choose a registrar with an automatic renewal policy so you don’t accidentally lose your domain.
- Security features. Always choose a registrar with robust security features that keep your data safe, such as two-factor authentication and data encryption. Some registrars even offer private registration, which means the registrar uses their contact information instead of yours next to your domain name in the WHOIS records. WHOIS is a database of all registered domains and the contact details of their owners.
- Variety. Not all domain registrars offer all kinds of TLDs. If you want new TLDs like .xyz or country code TLDs (ccTLDs) that are better for local SEO, choose a registrar that offers the variety you need.
4. Advertise your domain
Whether you decide to sell your domain name soon after the purchase or after a long while, you’ll eventually have to find a buyer. Crucially, the buyer must be willing to pay more for the domain than you did if you want to make a profit.
While you’re holding the domain, you may decide to wait until interested parties come to you. This is a particularly effective strategy if you have a high-value domain that you know others will be interested in. As long as your contact information is public and up-to-date on your WHOIS listing, prospective buyers will be able to contact you to make their offers.
However, if you want to generate interest in your domain and hopefully push up its selling price, you may need to have a proper advertising strategy. This can involve posting about your domain on social media and in domain forums like NamePros, or you could even create a landing page to advertise your domain. Make sure you include extra information about your domain such as the potential ad revenue, existing traffic and page authority to make your domain even more appealing.
5. Selling domain names for a profit
The above advertising strategies are essential if you’re selling your domain privately, but remember that there are multiple ways to sell your domain name. By choosing a domain marketplace, broker or auction, your domain’s listing on these websites may be enough to generate interest (but advertising the domain elsewhere can also be a huge help).
Here are the main places where you can sell your domain name:
- Domain marketplace: Popular domain marketplaces cater to a large audience, giving your domain name the exposure it needs to attract more attention and gain a higher price tag. Websites like Flippa and Dan get a lot of traffic, but bear in mind that these marketplaces will charge either a commission, a one-off fee or a monthly subscription.
- Domain auction: Auction sites like Sedo are also an incredibly popular place to sell domain names. On the site, you’ll create a listing, a starting price and a reserve price. However, auctions are generally better for high-value domains that attract bidding wars.
- Domain broker: A domain broker such as Sedo can help you track down potential buyers and negotiate the best price. Again, as all of these services charge fees or a commission, they work best for higher-value domains. You may want to sell cheaper domains privately to keep as much of your profit as possible.
Another great thing about these selling methods is that domain marketplaces and auctions often come with free escrow services. Escrow is a legal arrangement in which a licensed third party holds money for a transaction until a particular condition has been met. So, when selling a domain name, this means that the money is held until the domain is transferred to the new owner, preventing either side from scamming the other. If you decide to sell your domain privately, you’ll need to pay for your own escrow services to protect your money.
In addition to choosing a selling method, you’ll also need to set your price. The amount will depend on your domain evaluation, but you’ll need to choose a pricing strategy too:
- Fixed pricing. Setting a fixed price for buyers is best for lower-value domains as they’re less likely to attract bidding wars. Fixed pricing is also best suited for selling on a domain marketplace.
- Flexible pricing. If you’re uncertain of your domain’s value or confident that it will attract a lot of attention, flexible pricing or selling it at an auction is a great way to negotiate, create bidding wars and drive up the price as much as possible. This method is more challenging but could ultimately be more rewarding.
Finally, once you’ve found a buyer, all you’ll need to do is complete the transaction and transfer the domain name to its new owner. The domain transfer process is pretty simple and just requires you to contact your registrar and verify your decision with an authorisation code – the only catch is that you can’t transfer a domain within 60 days of registering the domain, changing its details or completing another transfer. This is called the 60-day Change of Registrant lock.
To learn more about the transfer process, make sure you read our step-by-step guide on how to transfer a domain name.
What you should be aware of before flipping domain names
As we’ve shown throughout this article, domain flipping can be very easy, straightforward and profitable. However, it’s important to not rush into this business, as there are some risks and drawbacks you should be aware of beforehand:
1. No profit guarantee
Although anyone can make a profit with domain flipping, this doesn’t mean they will. Even if you spend a lot of time evaluating your domain, advertising it and listing it on popular marketplaces, you’re never guaranteed to make a profit. Your domain name is only worth what people are willing to pay for it.
2. Trademark infringements
If you start looking for recently expired domains, be careful not to snap up domain names that fall under a business’s trademark. Buying these domains could be a trademark infringement and you may be accused of cybersquatting, which is illegal in many countries. Always check for copyrights and trademarks before buying an expired domain.
3. Time consuming
Flipping a couple of domains as a side hustle usually won’t take up a lot of your time. However, if you start buying large domain portfolios, the process of maintaining these domains, researching them and trying to sell them could become a burden. Don’t bite off more than you can chew – start with one or a couple of domains and expand slowly from there.
Frequently asked questions about domain flipping
Is domain flipping still profitable?
Individual results may vary, but overall, domain flipping remains very profitable. Domains are continuing to increase in value, which provides domain flippers with a fantastic opportunity to snap up great deals and sell domains on for a large profit. Plus, new TLDs like .xyz are constantly being created, which means that new niche domains keep hitting the market and drawing attention.
What is domain drop catching?
Domain drop catching, also known as domain sniping, is the practice of registering a domain name immediately after its previous ownership has expired. This could be a great way to obtain valuable domains with a lot of existing traffic at a cheap price, but be careful not to infringe on another business’s trademark (see above).
How much do domain flippers make?
This depends on the domains you choose and how many you can sell. You’ll make more money by selling valuable domains (such as expired domains, keyword-rich domains, local domains and short domains), but these are also more expensive to buy. Selling lots of different types of domains could help you minimise risk and maximise your profits.
How do I learn domain flipping?
Anyone can start domain flipping once they know the basics. However, if you want to increase your expertise and profitability right out of the gate, you can visit domain-related forums or enrol on an online domain flipping courses.
What budget do you need to start flipping domain names?
You don’t need a large budget to get started with domain flipping. The average domain name costs around £10-£20 per year, but you can also find much cheaper domains if you want to start small.
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