Got a knack for customer service, research, and enjoy taking on a dynamic challenge? Interested in a lucrative side hustle that can reward you with some serious coin?
You already know about house flipping, but have you ever considered trying your hand at domain flipping? As it turns out, buying and selling domain names can help you turn an impressive profit. It’s also easy to get started.
Let’s get into what you need to know.
What Is Domain Flipping?
Domain flipping refers to buying and selling domains for a profit. It’s a fairly simple concept, but it can become complicated once you get into the nitty-gritty details.
Every domain name has implicit, monetary value. For example, the domain, Lasvegas.com is currently worth a staggering $90 million. That said, domain names can range anywhere from about $50 to several million.
With more and more businesses competing for premier online real estate, the web domain name industry continues to grow annually.
In other words, there’s a rush to buy and reserve domain names. Everyone wants the hottest names without the whopping price tags.
What Makes a Domain Name Attractive?
The shorter and easier it is to recall a name, the more valuable it tends to be. That’s why single-word and short, memorable phrases tend to cost so much. They have a wide appeal to a vast audience.
The trick is finding lucrative keywords that buyers would be interested in. Ideally, you want a domain name with decent traffic averaging around 10,000 searches per month. You can use simple tools like Google Keyword Planner or AHREFS to determine the traffic information.
Generic names always tend to sell well. They usually work for a variety of sellers as they can attract a variety of niches.
Likewise, local or geographical domain names have become a hot commodity. Google favors local SEO. That means that more and more businesses are competing to be on the first page of their local search results.
Define Your Budget
Like with any business startup, you need to have a ballpark budget. In this kind of hustle, it’s not about putting down a hundred or so dollars. You’ll need a couple thousand if you really want to succeed.
It’s best to typically start off with a reasonable amount of money and then scale up once you start getting into the swing of things. Your own liquidity is essential when starting out. You need to have an ample cash reserve to tide you over in case you need to wait on payment.
Choose Your Niche
Ideally, you’ll want to choose a profitable niche that you understand. Thoroughly understanding your niche will help you collaborate and discuss costs with buyers and sellers.
Some successful flippers have multiple niches. However, if you’re just starting out, it’s better to concentrate your efforts on a single one.
If you already have expert knowledge in the field, you have a definite advantage. You already know what the audience prefers. You know what does and doesn’t work in terms of marketing and selling.
Check the Availability
Once narrowing down your ideal names, you need to find them. First, you should determine whether or not you can purchase them as new registrations.
If they are already taken, you’ll need to go to the aftermarket to purchase them in an auction.
If they aren’t available via an auction, you may need to contact the owner directly. Most people have this information available on domain databases. That said, information may be outdated, so you may need to do some serious digging!
Negotiate the Price
Once you identify the seller, you need to identify whether the price is right. This is a complicated and nuanced task. It can be challenging to decide whether or not you’re getting a steal- or getting completely ripped off.
Ideally, you should see how the domain sold in the past. What kind of figures was it generating?
If that’s not an option, you can check how similar keywords rank and sold in the past. This will give you a general estimate for what you can expect.
The negotiation process inherently requires some trial-and-error. On the one hand, you want to pay the lowest price possible. On the other hand, this may not be possible, especially if you’re competing for a lucrative name.
Mind the Risk
Flipping domains can be lucrative, but it can also be risky. Like any investment option, rewards are not promised.
First, you have to consider the inherent subjectivity associated with domain names. Just because you believe a certain name is profitable doesn’t mean it will be. Similarly, even if it’s performed well in the past, that doesn’t guarantee you’ll generate the same future results.
There’s also the chance of running into concerning legal issues. For example, some names closely resemble existing trademark names. If that’s the case, you can find yourself in hot water in the event of a lawsuit.
Furthermore, you may have to wait several months or years before making a significant sale. For this reason, it’s essential to have established liquidity and know your risk tolerance.
This isn’t a get-quick-rich scheme. Flipping domains require excellent customer service skills, patience, and risk tolerance. It also requires ample time and experience learning about how sites and keywords work.
Final Thoughts on Buying and Selling Domain Names
Buying and selling domain names can be a fantastic way to turn a significant profit. That said, this isn’t a get-quick-rich-scheme. The hustle requires time, patience, and considerable trial-and-error.
Are you interested in learning more about the ins and outs of domain names? Check out our blog today!