What is domain Investing?
If you're ready to get into the exciting world of domain investing (buy domain names and sell them for profit) then this article is for you.
Investing in domain names is a simple concept, but once you dig deeper, there's a lot going on.
Investing in domains essentially means buying domain names and then selling them for more than you bought them for. Domain investors search for domains that fit their investment criteria, buy the names, and then sell them to other
domain investors or people who want to use the domains for a website.
Buy Domains
You need an inventory of domain names before you can sell them. To build a stock of good names, domain investors turn to a number of different sources.
- Expired domains - One of the largest sources of domain name inventory is expired domains . Millions of domain names expire every month if their owners don't pay for renewal. Those domains can then be registered by anyone.
Most of the decent domain names are registered the second they expire by companies using technology to acquire the domains. This means that domain investors have to use these so-called "drop catch" companies to buy domains.
Sites like NameJet and DropCatch help domain investors To Get Domains These Domains. Most drop-catching services charge a small fee to purchase a domain when it expires. If more than one person is interested in a name, it will be auctioned off to the highest bidder.
- Direct Purchases - Buying domain name directly from their owner is another way. This process can be time consuming but you might get the best price if you can strike a good bargain.
This involves contacting the owner of a domain to see if they will sell it and then negotiating a price. A good resource for finding the owner of a domain name is the Whois database, although recent changes to this database mean that many people have private Whois records that exclude their contact information.
Domain investors will tell you that the more work you put into acquiring a domain, the better the deals are. Contacting domain owners one by one takes a lot of time. This is why most domain investors prefer expired domain auctions, where all domains can be purchased easily.
- Marketplace Purchases - Millions of domain names are listed on marketplaces including Sedo and Afternic. Domain investors use these marketplaces to find domains they like and then bid or buy the domains at fixed prices.
- Live Domain Auctions - One of the most fun ways to acquire a domain name is to bid on a live domain auction. Like the expired domain auctions, these auctions get a lot of attention, so it can be difficult to find good deals.
- Manual Registration – The cheapest way to build an inventory of domain names is to register them manually. Domain owners use the term manual registration to refer to the registration of a domain name that is not currently registered. All you have to do is go to a domain registrar like SiteChai to register the domain at standard prices.
Also check out how to buy a domain name and How much a domain name cost.
Of course it is difficult to find good domains that are not yet registered. This method generally works for new terms that aren't popular today but could become valuable in the future.
Compared to other inventory sources, this is the cheapest domain inventory available. However, many new domain investors manually register a bunch of domain names only to find out later that they are bad domains. Start slow and focus on a combination of manual registrations, expired
domains, and marketplace or direct purchases.
Types of domains
Domain investors invest in three main types of domains: descriptive, branded and short.
- Descriptive - Descriptive Domains describe a product or service. For example, HoustonLandscaping.com describes a landscaping service in Houston. digitalpianoreview.com describes a company that reviews digital piano.
Descriptive domain names used to be very popular because they helped websites rank high in Google search results. Google has reduced the benefit of owning these exact-match domains, so they're not as popular anymore.
But short descriptive domains, especially those that define an entire industry, are still popular .
- Brandable : A brandable domain is a domain that can be marketed to represent something other than the dictionary definition of the word(s).
A good example is Amazon.com. Amazon.com doesn't sell jungles or rivers, as the name suggests. Amazon is a more than descriptive brand of the products it sells.
One-word domain names that can be trademarked are particularly valuable, but obviously difficult to acquire. Two- and three-word branded domains can be profitable for domain owners.
Another type of branded domain is made-up and unusually spelled words. However, these can be difficult to sell.
- Short domains - In recent years, a market for short domains has developed. This includes domains with just a few numbers or letters.
Domain investors use abbreviations to describe these domains. For example, LLL stands for letter-letter-letter like DNW.com. NNNN means number-number-number-number.
You might also see it spelled CVCV, which stands for consonant-vowel-consonant-vowel.
Short domain names are particularly popular with Chinese domain investors . Short domain names tend to be the most liquid domain investments as there is a large market of domain investors looking to trade them.
Selling Domains
After constructing an stock, it’s time to promote your domain names.
Many real estate and equity buyers are satisfied to get a 10% or 20% return on their investments. 100% is incredible.
But domain investors expect much more. They normally promote domain names for 10 times or greater of buy price.
This is for 2 reasons.
First, domains are an inefficient marketplace. Inefficient markets provide upward push to large income possibilities.
Second, maximum domain names are illiquid. This means buyers must keep them for a long term before selling them. By selling only a small percent in their stock each year, cash flows are limited. The economics require outsized profits on domain names that do sell.
Different Ways to Sell Domains
There are 3 primary methods to sell domains. Two are passive and the remaining one is active.
1. List the domain names on the market on marketplaces such as Afternic and Sedo. These marketplaces assist you to set a charge for the domain or leave it “make offer”. Buyers can seek the listing of domain names on the market at the marketplace.
These marketplaces additionally syndicate listings to different websites. For example, domains indexed with a fixed fee on Afternic will display up on SiteChai while a person searches for the exact domain name.
2. Add a “For sale” message at the domain name’s website. This is reasonably simple. There are many services out there that assist you create landing pages that say your domain is for sale. Efty and DAN.com are famous options. When a person visits your domain name they are able to inquire about buying the domain.
Most domain investors do each of the passive selling strategies above and this accounts for the vast majority of domain sales.
3. Do outbound sales. This active sales method takes plenty of work. Usually, it means gaining knowledge of the right contact at a organization that might be interested in buying the domain. As with all sales, there’s quite a few rejection.
Outbound sales additionally encompass seeking to sell domain names to different domain investors. While the profit possibilities aren’t as high, it may be a great way to sell domain names for cash quickly.
There’s a especially active marketplace for short domain name sales among domain investors. Brandable and descriptive domain names are extra difficult to sell to other investors until they're very high quality, such as one word .com domains.
Repeat the Process
Domain investing isn't a one-time issue. Like making an investment in actual property, it’s critical to always refresh your stock.
Domain investors have various philosophies about selling domain names. Some keep top-dollar and promote only a few domain names. Others focus on the quantity of sales and always reinvest earnings in extra domain names.
One issue all domain investors will inform you is that domaining may be addicting. There’s a massive thrill when you sell a domain for a massive profit.
Try registering a domain investment at Site Chai today.
