The Ins and Outs of Buying and Selling Domains for Profit in 2020

Updated on: by Olivia

Ever wondered how some people buy domains and are able to sell them for more than they paid? It’s a process almost anyone can learn how to do with some time and determination. This guide walks you through finding the best domains to sell and where to sell them.Buying and selling domain names has increased in popularity over the years as people have figured out how to take a domain name with potential and give it what it needs to sell it for a massive profit.

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It takes skill to succeed in this business, and you’ll certainly need to know how to find domain names that could be profitable.

This guide will help you do just that.

If you’ve ever considered domain trading as a business venture, then this information is exactly what you need.

How to Make Money Buying and Selling Domain Names

Why buying and selling domain names?

Have you ever looked for the perfect domain name for your website only to find out that it’s already being used?

While you might have walked away from that domain name without a second thought, some people would gladly pay a hefty price tag to get the domain name they had their heart set on.

Even if that means paying thousands of dollars – or more – for it.

For the person selling the domain name, that means a hefty profit – especially if they originally bought it for under $20, as is the price for most domain names that aren’t special in any way.

Some domain names are worth a lot, especially if they’re a generic name that can be used for various businesses in a specific niche or something that people search a lot.

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Therefore, there’s definitely room to make a profit if you know how to find domains that are priced reasonably and have the potential to sell for a lot of money.

And if you consistently buy and sell domain names, then you can turn the act into an actual business!

Step One: Buying Domain Names

First, you’ll need to understand the process of buying domain names and how to find ones that are possibly worth your time.

How to Find Domain Names to Buy

You’ll need to search for domain names that can turn a profit.

There are several types of domain names that can do this, like geographical names that target a specific state, city, or even neighborhood, like “SanDiegoRestaurant.com”.

People often search for businesses near them, so a geographically targeted domain name has the potential to become a highly sought-after name for the right business, like a city-based directory.

Business names – in the generic sense – can also be excellent choices for domain names to buy.

For example, something like “womensgym.com” could be a good domain name for a gym that targets women and women’s exercise classes to swoop up, and it could be willing to pay a good price for it.

You’ll want to avoid buying domain names for specific businesses, though, which could lead to trademark infringement.

As mentioned before, a generic name can also be a good bet.

This could be something like “PetCollars.com” where a person looking to start a business selling custom pet collars could want to buy the domain.

Basically, any domain name that you can see someone having a need for could be a good fit.

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Avoid taking domains that use people’s names or are too specific, as you’ll narrow your prospective buyer pool, making it more challenging to have profitable auctions or sales.

Where to Buy Domain Names

You can purchase domain names from different places, like:

From Their Owners

One way to do it is to contact the domain owner directly and make an offer.

Even if a site is well-established, the domain owner might be willing to part with the domain name if you give a good enough price.

However, don’t be pushy.

Send an email to the domain owner and maybe one follow up after a few days if you don’t hear back.

If they haven’t responded, there’s a good chance they’re simply not interested in selling, so it’s best to move onto another avenue.

From Domain Registrars

You can also purchase domain names directly from domain registrars.

These are companies that register and sell domains, like NameCheap and GoDaddy.

Not all domain registrars are equal depending on the domain you want to purchase.

Prices can vary a lot, so it’s a good idea to check through several of them to gather prices on the names you’re interested in.

Also, be sure to look at the length of time you’ll register the name for when you purchase it.

Some registrars offer a price of six months while others are for 12 months or longer.

Generally, the longer you purchase a domain name for, the cheaper your cost is.

One feature NameCheap offers that’s fun and handy to use is its “Beast Mode” domain name finder.

Plug some keywords in that you want to use and the generator will pop up several relevant names that could end up being awesome deals.

Some go for as cheap as $2 a year!

From Online Auctions

There are also several auction sites you can use to purchase domain names for cheap.

GoDaddy’s auction site is one of the more popular and well-known ones to use.

This is a great place to score domain names really cheap if you happen to luck out and bid on a domain that doesn’t get many other bites.

You can also filter the names by ones that are ending soon or those in the Bargain Bin to try to score some excellent deals.

Sedo, Flippa, and SnapNames also offer domain name auctions.

From Flipping Sites

You can also try a domain flipping site, which are designed to be a one-stop-shop for buying and selling domain names

Flippa, again, is a place where you can go to do this.

There’s also:

Building a Successful Portfolio

It’s best to plan on buying several domain names to get the ball rolling instead of just a few.

This way, you’ll have a well-built portfolio of domain names to sell instead of relying on making money from two or three.

Consider getting domain names in a range of industries to appeal to the most potential buyers.

Target domains that doctors, artists, bloggers, teachers, and construction companies would want.

The more selling opportunities you have, the more chances you’ll have to turn a profit.

Step Two: Selling Domain Names

Now, it’s time to sell! Here’s how to do it:

What to Do Before Selling

Although you can just turn around and list your domains for sale right after purchasing them, you’ll probably get a better outcome if you work on them a bit.

It’s a good idea to consider building up your domain into a website first – even if it’s a very small website – to make it more functional for whoever wants to buy it.

Many flippers look specifically for websites that already have some content in place that they can build upon.

Even better if they’re already making some money!

That’s why I suggest selling a website instead of just a domain.

It can be much more profitable because people are often willing to pay more for a site they can already see and envision as their future business.

If you’re interested in that, continue reading this section.

If not, skip to the section about “Where to Sell Domains.”

Build Up Content

First, consider creating some content for the domain.

Let’s use the example I mentioned before of PetCollars.com

For this site, you might create posts like:

  • How to size a pet collar for your dog
  • How to customize a pet collar for your dog
  • What sizes to pet collars come in?
  • What material should I use for my dog’s pet collar?
  • Do cats need to wear a collar?

These are all questions people looking to buy a pet collar might look for, and your website might be what ends up showing up in Google’s search results when they search.

Through the use of search engine optimization and well-informed content, it’s possible that you start getting a lot of traffic to the site that you can use to your advantage for monetization, which I’ll get to in a moment.

Some domains you buy might already have content on them.

If so, you can sift through it, delete or update content that’s outdated, and find ways to make it better.

Monetize It

Now, consider monetizing the domain through methods like displaying paid advertisements or using affiliate links.

When you go to sell your domain, you can ask for more money based on the income the domain brings in every month.

I’ve seen websites that bring in just $100 a month sell for thousands.

Having a monetization strategy in place that someone else can pick up where you left off makes the site that much more appealing to have.

Market It

Once you have a site you’re happy with, you can spend a little time marketing it with social media, email newsletters, and whatever other strategies you enjoy using.

Technically, you don’t even need to build up the site to do that, though.

You can do this with just your domain names that you buy, too, by letting your network know that you have a new name you’re selling.

You never know who might see it and decide that it’s the perfect domain name for them.

Where to Sell Domains

There are several places you can sell your domain names when you’re ready.

One of them is eBay, the popular auction site that lets you sell just about anything – even your websites.

You can also try:

Understanding Potential Risks

It’s good to be aware of the risks involved when buying and selling domains.

Just like anything else you do on the internet, there’s a risk for this, too.

First, there are potential scams in this industry.

Sometimes, buyers will contact you to buy the domain name from you.

They might even go ahead and pay with PayPal.

Then, you see a “fraudulent transaction” notification on your account come a couple of days later.

The buyer told PayPal that they never authorized the transaction and they get their money back.

Now, you are out your domain name and the money you should have gotten from the sale, and there’s not much you can do about it.

PayPal has little protections in place for sellers of digital items, so this scenario is very possible.

You also could become prey to a scammy buying and selling site that looks legit but has no protections for buyers and sellers to make sure they get either the domain or the money from the sale.

The sites I named above are legitimate ones that have proven to have worked for other domain buyers and sellers, but I suggest taking precautions with other sites you find.

Look up reviews, browse the terms of service, and learn everything you can about the site before using it.

Another risk is the legal aspect of domain name buying and selling.

Sometimes, domains can be hacked and stolen and then sold without you knowing about it.

It’s rare, but it happens.

However, if you’re the one caught with the stolen name, you’re the one who gets in trouble.

If you believe you may have a hijacked domain name in your possession, you should quickly contact the ICANN security team (this article explains a bit about the process).

You can also run into legal situations with trademarked names, patents, etc.

It’s a good idea to do some research before buying any domain name to make sure you’re not taking another business name or getting yourself into a sticky situation with a legal team.

Conclusion: Flipping Domains for Profit

Buying and selling domains is something that will likely take some trial and error to figure out a system for picking the best domain names and finding places to sell them.

Remember that turning a plain domain name into a website can give you the biggest return for your investment, but it’s not always plausible to spend months developing a domain if you want money more quickly.

In that case, stick to selling your domains and hoping that you find just the right buyers who are willing to pay more than what you paid.

Best of luck on your new venture!

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