Over the years, you have probably seen news of domain name sales worth millions and millions of dollars. CarInsurance.com for $49.7 million or VacationRentals.com for $35 million – two of the most expensive domain names ever sold. Domain investing is a portion of our industry – the domain industry. But to be successful in buying domains as an investment, you have to do it right.
It is an interesting business, perhaps one you might be interested in. Let’s discuss everything you need to know about it in this domain investing guide.
What is Domain Investing?
Put simply, when you invest in domains, you purchase a domain name with the plan to resell it later to the right buyer for a profit. Think of investing in real estate, except a domain is a digital asset rather than a physical one. Like real estate investing or any type of investing, the goal is to earn a return on your asset (the domain) that is higher than what you paid for it. As an investor, you should have a keen eye for future premium domain names, patience, and the gift of being good at closing sales.
The promising thing about domain investing and the industry itself is that there are many opportunities. Domain registrations have only been around for thirty years. Although millions of domain names have been registered, they are constantly being bought, sold, and created. Additionally, with the rise of ecommerce, domain names will continue to be needed.
How to be Successful in Buying Domain Names as an Investment
Interested in domain flipping or wondering if investing is a good idea? Here are our tips for being successful as new domain investors.
Do Your Research
Like most things, to be successful in domain investing, you need to do your research.
You need to understand the industry – the pricing, the different types of domains, extensions, etc. This industry is fast-paced, and you need to be ready.
Be a Step Ahead
The key is finding a domain name that you believe will become popular in the future. Additionally, what names businesses and individual buyers are looking for? And acquire these names before they do.
These could be domain names that are very general, geographically related, potentially brandable words, etc.
The best way to build your domain portfolio is to look at expired domain listings. You can find many to choose from at domain auctions or enlist the help of a domain broker to find valuable domain names.
Being creative is in tandem with being a step ahead.
As an investor, you need to have the right eye. You need to see what other people do not see. Find the potential in certain domains, and walk away from others.
That’s where examining the domain history comes in. Consider:
- Who has owned it before?
- What was it used for in the past?
- Does it have a good standing with Google?
- What niche is it in?
- Is the selling price a reasonable offer based on the value? Is there room for you to make a profit?
- How long has it been on the aftermarket? How much time will you have to hold it to be able to earn a profit?
Find the Right Buyer
The hard part of domain investing is finding the right potential buyer. There are many different options, and because each domain name is unique, every buyer will be different. Some investors sell to other investors who are trying to build their portfolios. Investors can also sell directly to businesses or individuals who want to use it for their business branding.
How Much Money Can a Domain Investor Make?
Truthfully, only a small number of domain investors use investing as a full-time job. The overall majority of investors do it as a side hustle. This is because most domain sales are not the huge multi-million dollar sale you see in articles. Domain names can sell for a few hundred, tens of thousands, or hundreds of thousands. It depends on the domain. However, many domain sales are also not reported publicly.
Premium domains, or those that are short, easy to remember, and use keywords, increase the value of a domain. The greater the search engine optimization (SEO) value and potential, the higher price it can command.
Is Domain Investing Worth It?
Investing in domains has become an increasingly popular venture, offering the potential for significant profits and entrepreneurial freedom. Domain investing can be worth the time. However, like any investment, it carries its fair share of risks. Before you dip your toes into those risky waters, hear Jeff’s take on what you should know before becoming a domain investor.
The Bottom Line
Many people fail at this business, but at the same time, many people are very successful.
If you do your research, truly understand the market, and like a constantly shifting industry – domain investing could be for you. If you play your cards right, you could turn domain investing into a real money-making opportunity. It’s hard work, but with experience, domaining can be a great way to build income.
Interested in Buying a Domain Name?
A domain name functions as your virtual street address. It serves as a means for both new and returning customers to locate you on the internet. The simpler it is for people to find you, the higher the chances that customers will revisit your website.
With extensive industry experience, our team of domain brokers specializes in various aspects such as domain acquisition, appraisal, branding, brand protection, and portfolio management services. We take pride in our transparent approach and unwavering dedication to assisting you in achieving your goals. Moreover, we handle the nitty-gritty work for you.
Our primary objective is to enhance your online visibility. If you’re interested in discussing the purchase of a domain with one of our domain brokerage experts, please reach out to us for a free consultation.