Make Money Buying and Selling Domain Names

I just wrote a hub about saving money when registering a domain name by using Godaddy coupon codes and it made me think again about how to make money online from trading domain names. Domain names are big money and there are plenty of people who have made many many millions just from selling the portfolio of domain names they acquired over the years. The names that spring to mind are Kevin Ham, Rick Schwartz, Franck Schilling but there are many more.

The basic idea of trading domain names is that you buy a domain name, hold it for a while (during which time you may develop a website around the name or you may just leave it gathering virtual dust or real money from ads. on a page) and then sell it on for a huge profit.

Make Money Online from Domain Names - the Reality

That is the dream of course, the reality is a bit different. You can easily end up with a few hundred domain names that will cost you around $10 at least each to renew each year, so a few hundred times $10 is a few thousand. That is how much it will cost you each year to renew your few hundred domain names.

Then, when you try to sell your cherished domain names people will either just ignore you or tell you know your names are rubbish and not even worth the $10 you paid for them. You try to submit them to domain name auctions only to have them rejected as not being good enough, even though the same domain name auction houses are selling total rubbish domain names for $10,000 each. This is where you figure that it is all a 'closed shop' open only to insiders and friends of a friend or members of the 'family'.

You may also discover that just by submitting your domain name to an auction, the auctioneer automatically gains the right to 20% of any amount that you eventually sell your domain name for, even if they refuse the name and you sell it yourself via another site. Yes, such clauses do exist ! So take care and read carefully any small print before even thinking about submitting your names to anyone to sell on your behalf.

But even though I have never been able to really make money online from my domain names, I still own a few that I keep renewing and I have even started to develop some of them into mini-sites - see Netbooks for a fine example. The aim is to one day actually get more active in domaining and sell some of my names for BIG money !

What is BIG money in the domain names business ? Well so far this year (2009) the two biggest sales have been Toys.com for $5.1 million and Candy.com for $3 million. Smaller sales have been Forums.com for $400K and Mouse.com for $125K and FineWatches.com for $40K. These are just a few examples there are many thousands of domain sales every year for a few thousands dollars each. To see a list of domain sales check out dnjournal.com

A few years ago Rick Schwartz had a domain name called iReport.com. How much was it worth ? Well, how long is a piece of string ? Two years ago he sold iReport.com to CNN for $750,000 so clearly beauty is in the eye of the beholder.

That is what is so fascinating about domain names. Anybody can register any name and hope that one day it takes on a life all of its own ! How much is Youtube.com worth today and how much was it worth when it was registered for the first time ?

If you are thinking that maybe buying and selling domain names sounds like a good idea then here are a few words of warning - a) steer clear of anything that relates to anybody else's trademarks, you will probably just cause yourself a lot of trouble b) go for dotcoms, they are worth a lot more than all the other extensions (ten times more at least) c) it is very unlikely that you will be able to register a one-word dotcom as they were all registered long ago, but you might be able to come up with a good two-word dotcom d) don't bother with three-word dotcoms they are worth a lot less than two-word names e) consider real-estate names, especially for places that don't really exist yet i.e. new developments and new cities that are being built but that very few people have heard of.

Here are a few more words of advice from domain name expert (i.e. he made a lot of money from it) Michael Berkens from TheDomains.com - "If you’re selling your domains try several channels, SnapNames.com, Sedo, the Domain Distribution Network, NameMedia’s network (BuyDomains and the AfternicDLS), Bido.com, domain show auctions. Try different strategies. Some will work and some won’t. Sometimes you’re going to win and sometimes you’re going to lose. If you don’t try different avenues and sit tight you are going to really lose. Remember when it comes to monetization or sales, not every solution fits every domain," Berkens added.

For more information about how to make money online from domain names you can check out - DNjournal - thedomains.com and this very splendid post about making money from domaining and probably the most famous domain name millionaire of all Kevin Ham