Buying and Selling Domain Names
I started buying domain names in the late nineties when there were still plenty of really good names to be found. That’s not the case any more. At least I don’t believe so. The majority of the domains that I own are .com names. Many of them are between five and ten years old. The age of the domain can be really important in the eyes of the Search Engines. Oh I have some .org and .net names and a few other miscellaneous TLD’s (Top Level Domains) such as .info and .ws as well, but I like to stick with the original and most valuable TLD, the .com.
Brief History
If you are new to the domain names market, you may not know the difference between the various TLD’s. The original three (.com, .net and .org) stand for Commercial, Network and Organization respectively. Back in the day, the three TLD’s were much more aligned with what they were created for. The .com extension was meant for commercial (for profit) businesses. The .net extension was generally used for Internet Service Providers and .org was mostly used by non-profit organizations such as churches, clubs, etc. However, over the years people would tend to use whatever name was available with no real attempt to use the appropriate TLD.
Of course as more and more people and businesses jumped on board the Internet, it got harder and harder to find good names. Once the value of domain names became apparent, many people started registering domain names by the hundreds in an attempt to gobble up all the remaining good names for investment purposes. It was those early investors who made their fortune by buying up those one-word domain names like Business.com which sold for $8 million dollars or Autos.com which sold for a cool $2.2 million. Although Business.com still holds the record for the highest amount paid for a single domain name, quite a few have sold for $1 million or more.
As the demand for domain names grew, it became obvious that new TLD’s would have to be created in order to meet the demand into the future. After the original three, we saw .edu (education), .mil (military) and .gov (government) TLD’s introduced. After that, it seemed like every year or two another TLD would come along and there would be another rush to grab up all the good names for those extensions. Today we have dozens of top level domains to choose from including .tv, .info, .ws and of course all the country TLD’s like co.uk (United Kingdom).
What makes a really good domain name?
There are a number of opinions on this, but personally I use the following guide when I’m deciding to buy a domain name.
- The name itself should contain from one to four keywords. I prefer no more than three, but it really depends on the name.
- The name should only contain letters. No numbers or dashes. Even though dashes can make a domain name easier to read when it contains multiple words, those dashes are meaningless to the search engines and make the overall name less valuable.
- Don’t make the name too long. It should be something that is easy to remember, easy to spell and doesn’t take a long time to type out.
- I generally stay away from abbreviations and non-words, unless it really makes sense. For example, WXYZ.com really doesn’t make sense unless I’m buying a domain name for a radio station and these are its call letters.
- Stick with .com names if at all possible. .net and .org names are okay, but I prefer the .com name when available.
If you plan to buy and sell domain names on a regular basis, I would highly recommend that you obtain a reseller’s account at one of the more popular domain registrar’s such as www.enom.com. You will generally get better pricing when you’re a reseller and most reseller accounts offer useful online tools to help you manage your domain portfolio.
When it comes to selling your domains, there are many places available to post your domains. One of the most popular sites today for buying and selling domains as well as complete websites is www.flippa.com. I try to browse through the listings on Flippa at least two or three times per week. You can run across some really good domain names every now and then. If you’re looking for a complete website, this is probably one of the best places to start your search. Some real gems are available every now and then if you’re patient. Two other good places to look for domains as well as completed websites are www.ebay.com and www.godaddy.com. Auctions can be a good source for domains, although you should always be cautious not to pay too much. Also be wary of claims by the seller that the site is already making a lot of money. Make sure you do your due diligence and research these claims before making an offer. If you’re buying from an auction site, always make sure to check the seller’s feedback.
Personally, I tend to be the type of person that buys domains and holds them for a while. Some people like to turn them over quickly. It all depends on your goals and the business model you want to follow. The first thing I usually do after I buy a domain is to “Park” it somewhere until I decide what my plans are for the domain. I will either buy or hold or I might develop a website with the domain for myself or to resell. “Parking” a domain means that you are loaning the use of the domain to someone else who will create a site for advertising purposes using your domain and then direct traffic to the site based on keywords. Then, whatever revenue is produced from these advertisements is split between you and the company that you parked the domain with. This may only produce a few cents to a few dollars per month, but it’s better than just letting the domain sit there especially if you plan to hold it for a long time.
When it comes to selling my domains, I would have to call myself a passive seller. By that I mean that I generally don’t actively list my domains for sale on a regular basis. Oh I will occasionally post one or more of my domains on EBay or Godaddy Auctions, but most of the domains I have sold to date have been where the potential buyer has approached me first. I have sold about ten domain names in the last two years. Two of those sold for $750 each. Not bad for a small investment in registration fees. My domain portfolio is currently about 160 domain names of which 90% are .com names.
Buying and selling domain names can be a very rewarding venture. Whether you’re doing it as a business or as a hobby, it can be a fun way to spend a few hours per week. It has given me many years of enjoyment as well as some extra money in my pocket. If you’re looking for an online business that can be both fun and profitable or you already have an online business and are looking for another income stream, then I would highly recommend you look into domain names.