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.