Imagine it’s 2017, and for some inexplicable reason, you register a domain name CovidNews.com. Two years pass, and suddenly, you find dozens of emails from news agencies offering you money for the domain.
That would be a fluke, but in general, companies base their whole model on predicting what domain names will become popular and sellable for a significant amount. That’s what domain flipping is. In this article, we’ll show you how to flip domain names and explain what names are perfect for domain name flipping.
Domain Flipping: Buying and Selling Domain Names
Domain flipping is the practice of buying existing, new, and expired domain names to sell them later for a higher price. Just like house flipping, it’s essentially a simple idea, but it requires some effort on your part to be successful.
You need to follow the latest domain trends and find available domain names to buy them before someone else does. You should also learn how to value a domain name and gauge whether the current selling/registration price leaves enough room for a sizable profit.
Domain flipping can be a legitimate business model. Depending on your strategy, it can be a low-cost business idea that requires an initial investment of just $10. Of course, you can buy domain names at premium prices and spend thousands of dollars. As it often is, the bigger the investment, the bigger the risk.
Reasons for Domain Flipping
When we come up with an idea and start writing a business plan, the more experienced managers tell us that making money is not the company’s goal but the byproduct of our achieving other objectives.
With domain flipping, it’s different. The main reason to do it is to make a profit in the same way you’d do with stock investment. You want to buy low and sell high, and that’s all there is to it. Other reasons to do it include:
Serving a Growing Marketplace
Aside from that, domain flipping is a viable business because the interest in registering a domain name is ever-growing. According to Verisign, there were 354 million registrations in just the first three months of 2023.
Demand Is High
It’s difficult to choose a domain name that’s brandable, catchy, and easy to spell. Aside from personal websites, every company takes a domain name even before it becomes a profitable business. Many businesses also register several domains at once to avoid cybersquatting or getting their brand confused with another organization. For example, when Facebook switched to Meta, the company registered more than 280 names that contained the word.
As a result, when you find a brandable domain name that might interest various parties, you can register it and set a high price for its usage rights.
What Kind of Domains Are Best for Flipping?
If you’re looking to flip a domain easily and for a sizable profit, it’s best to find a domain name that uses a popular top-level domain (TLD). A TLD is represented by the last part of the domain that comes after the last dot.
For example, .com, .net, .org, and .co are some of the most popular domain types out there, with .com being by far the most sought-after type. In fact, according to Statista, dot-com domains account for just under 48% of all global domains. The next most popular extension is .org, with a 4.7% share.
You should also monitor trending TLDs. Many country-code TLDs (ccTLDs) today have a global use and have registrants all over the world. For instance, startup and AI-based companies often opt for .io and .ai domains instead of a more generic one.
Aside from the TLD, you should also look for short, one-word domains that are brandable and can be of value to businesses. If you’d owned Meta.com when Zuckerberg decided to rebrand, you could have been a rich man by now.
However, the brandability aspect is key. If you look at our domain name, it contains three words and is on the longer side, but you know exactly what we’re about. Having a meaningless domain name just for the sake of its brevity may backfire.
For example, at the time of writing, GoDaddy Auctions listed Devkko.com for just $5, whereas MindMyFinance.com required a minimum offer of $15 million.
5 Steps to Flip a Domain
Flipping a domain is a straightforward process that you can do in five following steps:
- Find a suitable domain,
- Evaluate the price,
- Obtain usage rights,
- Find a suitable buyer,
- Sell the domain name.
1. Find a Suitable Domain
The first step is to find a domain name that’s either available or for sale and buy it. You can visit auction websites to see what’s on offer.
Alternatively, spend less money on registering an unused domain name. Try using keyword research tools to see what words have high search volumes.
If you can’t come up with a memorable name to flip in the future, use our AI-powered domain name generator and get 1,000+ catchy ideas to use for your portfolio.
2. Evaluate the Price
In house flipping, there’s a 70-percent rule, which states that you shouldn’t pay more than 70% of the after-repair value. While you won’t be fixing your domain’s plumbing, you should make sure you’ll be able to flip the name for at least a 30% greater price.
There are a number of factors you should consider when evaluating a domain name, such as:
- Domain type,
- Name length,
- Content history (when buying an existing domain),
- Niche relevance,
- SEO ranking (when buying an existing domain),
- Avoiding any trademark infringement.
3. Obtain Usage Rights
If the domain name is already in use, you can find the current owner’s contact information by looking up the website’s data in the domain name system (DNS). If it’s available, all you need to do is register it. Check out our video to learn how to register a domain name in under five minutes:
4. Find a Suitable Buyer
Now it’s time to find someone who you can sell to. You can list your domain names on the same auction websites you use to find domains to flip.
If you want to be more proactive, you can create a dedicated website where you can promote and list all your domains and even employ some marketing strategies to reach a larger audience.
Once you find an interested party, make sure to remove the listing from other platforms.
5. Sell the Domain Name
The final step is to transfer your domain name to its new owner. Make sure to sign an agreement to make sure everything goes as expected.
Many auction websites offer free transfer services. If yours doesn’t, or if you’ve made a direct sale, you can find a third-party service, such as Escrow.com, that will help you with the process.
Pros and Cons of Domain Flipping
As is the case with every business model, there are advantages and disadvantages to domain flipping. Although it can be a great way of making money, it’s speculative in nature, and your investment can turn out to be a bust.
Check out the table below to learn the pros and cons of domain flipping:
|Small initial investment||Potential blacklisting issues|
|Great margins||Copyright or trademark infringement|
|No technical knowledge needed||Unrealistic initial valuations|
|Easy to scale||Hard to predict profit margins|
|Doesn’t take too much time||Potential loss of money|
Domain flipping is just like any investment in which you only plan to sell later for a profit. The difference is that instead of buying stocks or cryptocurrency, you invest in domain names.
You’re banking on the idea that a business will find the name you’ve registered worth the price you’re looking for instead of registering an available domain name on their own. It can be a great side hustle in the beginning and develop into a proper business once the money gets rolling.
If you’re not a domain name expert and don’t know what makes a name profitable, use our domain name generator to get inspired and find catchy names that are available for registration.