The buying and selling of domain names can be a lucrative online business. Over the years, a number of domains have been sold making for sometimes, a hundred times the buying price.
Bellow is the top 10 most expensive domain names ever sold:
For instance, a $10 investment on this site led to a sale of $2600. Also, the Joseph Kleitsch oil painting that was purchased for around $100 and later appraised at $500,000 according to this Godaddy blog post. Which goes to show that with the right approach flipping domains can be profitable.
If starting a domain business is something that interests you, here’s how you can set up a business in domain-selling at little to no cost:
#1. Set a Budget and a Business Plan
Like most businesses, you’ll require a plan and a budget. Your experience, strategy and learning pace determines your decisions on whether to buy or sell.
First, create your own domain to host the website- that’s your marketplace. Proceed to work on generating traffic around the site. This will bring potential clients boosting chances of making a sale.Though hard to recommend a perfect starting budget, $500 would be a good start. Using this as your starting capital, buy a number of high-potential $10 domains. Expired, dropped or a mixture of both will work well.
Invest only what you can afford to lose. As you gain momentum and experience, consider investing more and working on your business full-time.
#2. Pick a Profitable Niche
When looking for names to buy, the niche you select is important. Choose niches that feature content that’s always in demand. Topics which remain popular over a long period of time.
Examples are money and finance, sports, food, small business, e-commerce and so on.
Here’s how you can pick a profitable niche:
- Do a market trend analysis to find potential domains likely to be in demand in the future.
- Browse the current best-selling domain names. Check the recent sales at marketplaces such as Flippa, Sedo and NameBio.
- Look for dropped or expired names on sites like JustDropped.
Nailing an in-demand niche is a sure way to start a profitable domain flipping business.
#3. Determine the Value of Your Domains
The goal is to sell one of your domain names for thousands of dollars, if not millions. And the first step is determining what makes your site valuable.
Here’s how you do that in three steps.
3.1 Find Out The Price Of Similar Domains
To set the price of your domains – know what other sellers are charging. Since prices are subject to change, use your purchase price as a baseline. Sites like DN Journal will give you an idea on a three-weeks sales performance.
3.2 Use a Domain Appraisal Service
In this next step, you’ll do an appraisal of your domain. Sites like Estibot can help estimate the potential value of your website. Measuring domain value based on comparison to other sites, traffic, and conversion growth rate.
3.3 Research Buyers Price Range
Buying and selling domain names work like an auction. You’ll need to research what potential buyers are willing to pay for similar sites to yours. To get this information, put your names up for sale. Have a reserve price – that is the minimum you’ll accept. Make a sale if your price is met or a higher offer is given.
#4. Identify Your Potential Buyers
To grow your business, you need to look for potential buyers.
Here are 3 ways to do that.
#5. Adopt Different Sales Strategies
Use different sales strategies when trading in domains.
Here are three ways to do that:
- Set price – This is the price you set for your domain names. If a client meets it, you make a sale.
- Auction – where buyers make bids and you sell to the one with the highest.
- Offers – This is where you make offers to potential buyers.
#6. Never Rush to Make a Sale
After putting in all the work, you shouldn’t rush to make a sale.
Follow these steps instead:
- Determine how much your domain is worth
- Decide how to sell it
- On WHOIS directory, make sure your contact information is public
- Optimize your domain listing
- To receive payment, use an escrow service
- Transfer the domain
#7. Know the Risks Involved
Every business is exposed to risks. And in the domain buying and selling industry, you’ll have to contend with issues of:
- Legality – dealing in trademarked names can result in a lawsuit.
- Liquidity – it may take time to make a sale and turn the domain into cash.
- Subjectivity – unlike stocks, it’s harder to quantify the value of domain names.
Starting a new business presents a lot of potential and opportunities. While operating on a modest budget, you can pick a profitable niche that’ll drive up the value of your domains. You’ll be assured of making good sales by adopting the right sale strategies and knowing the risks involved.