Dealing in Domains – 5 Tips to Get Started Now and Do it Right

Posted on 31. Mar, 2010 by Adam in Internet

dealing_in_domains

Buying, parking, and selling domain names can be a fantastic business. It takes very little money to get started; overhead is minimal; the learning curve is relatively short; you can do it on a very part-time basis; and it can be extremely lucrative. So, what are the downsides, and why isn’t everyone doing it? First, even though the learning curve is pretty short, you do need to educate yourself on the right way to do it if you hope to make any money. Secondly, it takes persistence and patience, which some people just aren’t good at. In fact, if you’re looking for a way to make a quick buck, the domain trade is not for you. On the other hand, if you’re looking for a revenue stream to add to your life that will build over time and has very low barriers to entry, keep reading.

The key to being successful in the domain business (any business really) is learning what to do, and more importantly, what not to do to optimize your efforts. While you’ll want to learn everything you can and always continue learning, these tips will get you started on the right path.

1. Choose the right names. Really!? Nothing earth-shaking here. Obviously the names that will bring you revenue are those that are most likely to bring traffic. That means the names that are most valuable are those that: 1. Contain popular keywords, 2. Are generic and/or category-defining, 3. Are short, and 4. Are a .com. Of course there are exceptions. For example, OnlineCasino.se recently sold for $32,000; PayDayLoans.info sold for $24,000 earlier this month; and SearchEngineOptimization.net (not a .com or a short name) sold last year for $62,500. But you’ll notice that while these names don’t fit all the criteria, they each fit some extremely well – they each contain great keywords and all are category-defining.

2. Don’t go it alone. Once you have some domains in your portfolio, find some help. There are a lot of companies out there where you can buy, park, and sell your domain names. Afternic.com, Sedo.com, and Godaddy.com are a few of the most popular. All offer the ability to buy, park, and sell, and each offers an auction platform as well. These companies offer turn-key solutions for getting the most out of your domain trading, and much of what they offer upfront is free, with a cut taken when a domain is sold, or when revenue is generated on a parked page. They also offer educational resources and industry news so you can stay on top of the latest trends.

3. Park your domains the right way. The bad news is that on average, you’ll only realize sale revenue from about 10% of your total domain portfolio. That means that if you own 1000 domain names, you can expect to only ever sell 100 of them outright. The good news is there’s still significant revenue opportunity from the other 90%, if you work it right. All the companies listed above will give you the ability to park your pages, and they’ll offer monetized pages, so you can generate a little revenue from affiliate links. But you might want to consider a more robust solution, like SmartName.com. SmartName lets you park your domains on fairly generic parked pages, or you can choose from content pages, and even full-blown product sites, called instant shops. The company says that using these options results in up to 10X increased traffic to the domain, 40-75% increased page views, and, most importantly, up to 25% increased revenue. The potential value is beyond the parked page though. When it comes to selling the domain name, you’ll be able to garner a much higher price from a name with more traffic and in-place revenue streams. SmartName will also value your domains for you, and they provide a sales staff to facilitate the sale. All their services are provided free of up-front charges, but they’re particular about the domains they’ll accept. If you think you’ve got a winner, you’ll know for sure if you submit it to SmartName and they take it on.

4. Price your for-sale domains. You’ll see a lot of domains for sale with “make an offer” in place of a price. Most experts agree that you’ve got a lot better chance of selling your domain if you go ahead and post the price. That is, if it’s priced right. So…

5. Price your domains right. This is probably the most difficult part of the domain business. To do it on your own, it takes a lot of time (some say years) to figure it out. There are so many variables, from existing traffic, to SEO potential, to industry-specific saturation, to the whim of the likely buyers. So, you can guess, or you can get help. The advantage of making an educated guess is that you don’t have to share the sale with anyone. The advantage of getting some help with this piece is that you’ll know you’re getting a fair price for your domain name, and you might make a lot more, even after you pay commissions. As mentioned earlier, SmartName (if they take you as a client) will help you in valuing your domains, as will most of the other domain name sales platforms. Another great resource anyone can use for free is DNSalePrice.com, which is a tool that will give you historical data on domain sales with comparable keywords to yours.

Again, there is a lot more to being successful in this business than can be detailed here, but these tips are a good start. If you’re serious about making a business of domains, here is a book on the topic that is pretty thorough: Book. In any case, when you can buy and host a domain name for less than ten bucks, you can afford to delve into this business, even if it’s a part-time thing. Then, as you learn, it can become a great additional source of income, or even your full-time gig.

Popularity: 2% [?]

19 Responses to “Dealing in Domains – 5 Tips to Get Started Now and Do it Right”

Credit Girl

31. Mar, 2010

I’ve tried out GoDaddy.com and I was pretty satisfied with their service. Maybe I’ll check out the other ones. You list some great points like choosing the relevant domain name is really important.

Reply to this comment
Scott@ Forex Robot

31. Mar, 2010

I’ve never gotten into the business of buying and selling domains. I know that there are some people out there that are making a killing doing it though.

Reply to this comment
used tires

01. Apr, 2010

I’m a GoDaddy ‘guy’ myself. Even though I don’t care much for their ads, and that’s a different matter anyway, I am satisfied with their service for now.

Till then,

Jean

Reply to this comment
sell your property

01. Apr, 2010

Do they offer the ability to manage DNS for mail servers and subdomains? While this is an added feature, it’s common enough to be worth expecting.

Reply to this comment
pays to live green

01. Apr, 2010

I can see the draw to doing this as many people can make good money at it. As a website developer though, it sucks when I come up with an idea and all the domain names that I was thinking of are taken and only want to be sold for thousands of dollars. I have gotten away with getting one that I wanted for under $50 after waiting some time, but it just sucks to wait.

Reply to this comment
Andrew@BloggingGuide

01. Apr, 2010

Never thought that you can actually have a business with domain names. Will be bookmarking this post in case I decide to do it in the future. Thanks for these tips.

Reply to this comment
Credit Girl

01. Apr, 2010

@Pays To Live Green: Yes, that’s really unfortunate! Requires some thinking out of the box to come up with unique and relevant domain names in that case…

Reply to this comment
Laptop Briefcases

01. Apr, 2010

I’ve always been hesitant to get into the domain buying & selling industry. I always had the assumption that the big money was made by the guys who got in 15 – 20 years ago. I think I will sell some of my poor performing domains and see how that goes. Perhaps it will develop into a new income stream for me.

Reply to this comment
Payday Loan Lenders

02. Apr, 2010

I liked the post though the second point was not very clear. Domain business is really a great one and choosing a right domain is really the most important. Only the name can help in bringing loads of money.

Reply to this comment
Legitimate Work From Home Jobs

03. Apr, 2010

I can honestly say I get extremely frustrated when I attempt to purchase a domain name only to find it has already been purchased – and is just “sitting there”, parked, for a long time. So I wonder: is this the result of people buying up names and trying to sell them ? I suspect so. When I buy a name I have a plan to build a site. I personally think it is too cost ineffective to get into domain selling.

Reply to this comment
Correct Cure

04. Apr, 2010

Woah, I never really knew I could do so much with domains, Thanks a lot for these tips.

Reply to this comment
sell your property

04. Apr, 2010

I do like the first come first serve rule; however; there should be a limit on the number of domains 1 person or business can own. If you want a good domain name, ‘unless you have a lot of cash,’ you got to be creative. Find something available that can fit to your content. You may be surprised whats out there still.

Reply to this comment
Laptop Briefcases

05. Apr, 2010

I would have to disagree with the suggestion that there should be a limit to the number of domains 1 person or business can own. That makes no sense at all. That is like saying that people should only be allowed to own one piece of real estate. We live in a consumer based society though. So if some person or business has the money to invest in domains, that’s up to them. There should not be restrictions on this.

Reply to this comment
portable sauna

05. Apr, 2010

I like that post because i want to sell a site which i have and i have no idea how to do that or how much it will be sold for…

Reply to this comment
Ballet Moves

07. Apr, 2010

With the public sale of some very lucrative domains occuring, it would appear that re-selling domains is the new fad. Obviously it’s not for the hard and fast, but even if you don’t park your domain, you could very easily go after a microniche market, rank for a few keywords with a simple wordpress blog site, and then sell the site through a website auction like flippa, and make more money even faster.

Great article though, appreciate the information :).

Reply to this comment
Romantic Room

08. Apr, 2010

Thanks for the “Price your Domains Right” resources. Planning for some future sales!

Bryan

Reply to this comment
karasu emlak

14. Apr, 2010

I’ve used GoDaddy.com a lot and I was really satisfied with their service. But time to discover others…

Reply to this comment
pandora jewelry

22. Apr, 2010

yup i think that most important thing is the name if it contains a popualar keyword. For example if i have a domain name “makemoneyonline” then i am sure i can get $2000 or more for this :-)

Reply to this comment
Game Critic

23. Apr, 2010

I have quite a few domains which I am not using but none them would fetch much. :(

Reply to this comment

Dealing in Domains – 5 Tips to Get Started Now and Do it Right

19 Responses to “Dealing in Domains – 5 Tips to Get Started Now and Do it Right”

Leave a Reply