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Is there any money to be made in domain name flipping?

Discussion in 'Site Flipping' started by DougG79, Apr 25, 2013.

  1. DougG79

    DougG79 Regular Member

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    Wondering if there is any money to be made in domain name flipping?

    Or do you have to have a full running and active money making website to make any money.

    Reason I ask is I bought my first domain name and could not believe it was available.

    I do not know how to build websites (yet) and a newbie in this area but learned lots here so far.

    Looked at a name, it was available, grabbed it and it is one letter from another name that sold for 5200.00.

    Ay input appreciated.
     
  2. bryanon

    bryanon Executive VIP Premium Member

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    Sure there is. But only if you know what you're doing, aren't looking for quick turn-around times and aim to put together a large portfolio.

    The domain name industry is notorious for its slow turn-around times. The way most domainers make money is they buy domains at a discount through domain forums, Flippa and other places (and some times register new ones, albeit not too often), then stick them up on public market places in hopes of selling the domain to an end-user, and then start the waiting game. It often takes long time (years) until an interested party comes along, but at the end of the day it's well worth it if you've bought the domain for say $1k and are re-selling it for $20k.

    This (long turn-around times) is also the main reason why it's crucial to have a decent portfolio, rather than deal with 10 domains. Some (most) of your domains will never get any traction. Domainers live off of high margins on those that do get traction, and the profits from these deals cover the investments into the names that will end up unsold.

    One letter can make it or break it. Without knowing the domain names in question it's impossible to say whether your domain has any value or not, but there are many cases where looking at your example may be misleading, such as:

    a) The domain name is so specific to the buyer (e.g. a company name) that now that they have it, they are not interested in similar domains any longer.

    b) If the one letter is a typo/misspelling (business vs. buziness / microsoft vs. microshoft) then this kills the domain value. For some bizarre reason there are a lot of people out there thinking that s>z domains and the like are almost as valuable as the originals, but they couldn't be more wrong. I'm taking these figures out of the blue but to illustrate my point, businesscards.com would probably sell for $200k, whereas I would be very surprised if buzinesscards.com would sell for more than $5k.

    Disclaimer: I'm not a domainer so not speaking from personal experience. I've been operating in a similar industry for years though so I do have a general overview of what's going on.
     
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  3. Furious George

    Furious George Supreme Member Premium Member

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    That one letter is why it's available.

    I've never gotten into the domain flipping business. Personally, I would never pay more than 10 dollars for a domain, and that's assuming I ran out of coupons.

    It's a matter of sales and marketing. You can hunt, do the research, find deals, it could be worth it. You're probably 15 years too late to get in the game and expect to make any money. Now, with that being said, some people do make a decent living with it, but it's 10 bucks a year to hang on to a domain.

    In 100 domains, that's 1000 dollars. Do you think you can sell one in a year for more than 1000 dollars?
     
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  4. tompots

    tompots Elite Member Premium Member

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  5. DougG79

    DougG79 Regular Member

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    Wow, what an awesome reply.
    Do businesses have trademarks that keep you from owning a domain name. Ex Best Buy If I did best buy tvs for example would they then come after me for trademark infringement?

    So you are saying it is best to have a fully operational website to make some serious cash?
     
  6. abhi007

    abhi007 Jr. VIP Jr. VIP

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    flipping is very profitable if done correctly, getting the traffic part is the most difficult part
     
  7. stack paper

    stack paper Jr. VIP Jr. VIP

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    You'd be much better off flipping sites, especially to start with. Barrier of entry is much lower.
     
  8. bryanon

    bryanon Executive VIP Premium Member

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    Yes. And for this reason domains that include (or are overly similar) to a trademark almost never sell for any decent amounts.

    When talking about domains and trademarks it's important to understand though that simply registering and running a domain name that is similar to an existing trademark (let's say cheapwindows8.com) isn't considered trademark infringement. You can easily operate a domain like this for your fibreglass window production business without any issues. However, as soon as the site on the domain starts benefitting from the trademark, i.e. engaging in activities that are in the same or similar field with the copyright owner, the copyright owner can file a claim with ICANN and get the domain name handed over to them with not a lot of hassle and minimal expenses.
     
  9. infoasian

    infoasian Supreme Member

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    It's become a less profitable business. Last weeks namejet tried to auction off 1 and 2 character org domains that were never in use before. Reserve price was set at rumored 10k$. Most auctions failed. Some years ago you could have easily sold such domains for 100k$.
     
  10. bryanon

    bryanon Executive VIP Premium Member

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    Yep, the speculation business has certainly tanked. This is nicely illustrated by the fact that quite a few large domainers and domain brokers alike have gone out of business over the last couple of years and some have switched to dealing with established websites.

    With that said, what isn't dead (and never will be) is selling to end-users, rather than from one speculator to another to another. End users are always looking for domains and with domains being a non-renewable resource, there is always demand for short and catchy names.