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Chapter 4: How to Make Money with Domain Names

Thus far, I have given very basic information about domain names & what make them valuable. Now I will begin to discuss the ways you can use domain names to make money (much more fun). Throughout these different money making methods, I will also explain other necessary information such as the steps to purchasing the domain, how to transfer a domain, etc. Now, let’s begin with money making

Money Maker # 1: Flipping Unregistered Domains (How to Flip)

Flipping domain names is one of the quickest & easiest ways to make money with them. This is similar to buying stocks or flipping wholesale goods for a profit. The difference with domains is that you usually have a much lower investment, nearly unlimited supply of inventory, a profit potential of hundreds or thousands, and while you have the domain listed for sale it could be generating income to pay for itself. How does it work? You simply buy a domain (either new or expired), list the domain for sale on a top domain selling site, market the domain, transfer the domain to the lucky buyer, and collect your profits. Sounds simple enough right! Now let’s break down each step in detail, beginning with flipping a new (unregistered) domain name.

How to Register & Flip a New Unregistered Domain Name

Many domain investors only focus on buying expired domains to use for making money. While expired domains can certainly be profitable (and in several ways), some investors have no idea that it is just as easy to register a new domain & flip it for a profit (or perhaps even easier). There are several individuals & businesses that are willing to pay a higher price for a good quality “fresh” domain. Also, remember that most of the very best domains are already registered, so if you can use some brainstorming & tools to find new domains with great quality, then you can reap the profits in exchange for your efforts.

Step 1: Finding a Quality Domain Name to Flip

When you go to search for new “quality” domains, you should try to keep in mind all of the things that make a domain valuable. Also, when searching for a domain remember that there will be 3 potential buyers: Businesses (buying for business use), individuals (buying for personal or hobby use), and other investors (buying to use in some way to generate profits). Keeping these things in mind will help you to be more critical & pick only the very best domains. After you have brainstormed & used tools such as thesaurus, dictionary, etc. to generate a list of possible keywords, you can then check to see if they are available.

It’s a good idea to generate a large selection of possible domains in notepad, a database, or a word processor. Then, you can copy that into an online form to check the availability of the domains. I usually do this process at Godaddy.com using the “bulk registration” form to see which domains are available. To do this, go to the Godaddy.com home page. Click the “domain” tab in the top left corner, then click “register in bulk” from the drop down menu as pictured below. You will then be able to list up to 500 domains at one time & check to see if they are available.

After you enter the security code & then click the “go” button, Godaddy.com will automatically check the domains & remove the unavailable domains from your list. You can then proceed to check out & purchase any (or all) of the available domains.

Purchasing & Registering Domains

Once you have selected some quality domains, you can then proceed to purchase & register the domains you have selected. You can use any registrar of your choice. I usually use Godaddy.com to register my domains. This is because Godaddy allows you to “push” a domain name to another individual’s account at any time. This is extremely important if you are trying to do a quick flip. Why is this important? ICANN has a rule that when domains are registered they cannot be transferred to another “registrar” for a period of 60 days. So if you wanted to sell the domain using a company that doesn’t allow the “push” feature, then you would have to wait 60 days to sell it. However, using Godaddy’s “push” feature, you could register the domain, sell it at any time, & push it to the buyer’s account free of charge without having to wait 60 days (I will go over this in detail later). The buyer will have to have a Godaddy account to do this, and if they don’t have an account they can get one of those free of charge also. So remember, if you are going to try for a quick flip, use a registrar that allows you to “push” it to another account free without having to wait 60 days. By using this loophole, I have registered domains & flipped them within 1-2 days. There are other companies that will allow you to do this (such as eNom.com) but I usually use Godaddy.com.

After you have chosen a company (registrar), you can purchase your domain(s). This is a simple process. It is just the same as buying anything else online. You will usually just add the domain(s) to a shopping cart, proceed to checkout, and enter the payment & personal information. During this process, you will have the option of selecting things such as the registration length, auto or manual renewal, and you will probably receive add-on offers for additional products or services. If I am buying the domain to flip, then I select only a 1 year registration period, manual renewal, and I do not worry with any additional offers such as private registration, etc. This keeps the domain registration price as low as possible to ensure a healthyprofit. You will then enter your payment information, & finish the checkout process. After you have done this, you will have ownership of the domain for the complete registration period. You can then proceed to sell the domain on one of the top domain selling sites.

Selling Domain Names (How and Where to Sell Domains)

When it comes to selling domains you have several options. You can list the domain on a popular auction site, you can list it on a site made for domain trading, or you could market the domain directly to potential buyers. Each option has its pros & cons as summarized in the list below:

Auction Sites
Pros:
· Domains typically sell faster
· Good exposure
· Use bidding, buy now, or best offer
· Accept any payment method
Cons:
· Selling fees charged
· Domains sell for higher prices on other domain sites

Domain Name Selling Sites:

Pros:
· Domains sell for higher prices on these sites
· These sites are well known & used exclusively for domain selling/trading
· Potential buyers are often referred to these sites.
Cons:
· Commissions/fees charged
· Domains can take longer to
sell than on auction sites

Direct Selling of Domain Names:

Pros:
· If you have a good domain, buyers may come to you
· Choose your own payment/selling terms
· Avoid costly selling fees
Cons:
· Less Exposure
· Unless individuals are already interested, you will have to do a great deal of marketing/advertising
· Could take more time to sell if there are no buyers interested immediately

As the list summarizes, each method of selling domains has its pros & cons. Here is what I personally do: I divide my “great” domains from my “good” domains. I get my “good” domains & list them for sale on eBay.com. This allows me to quickly flip them for a profit, but I usually do not make as much money. I might make anywhere from $10-200 profit per domain. So instead of making large profits from one domain, I make smaller profits on a greater quantity. Also, eBay allows you to have multiple accounts, so you can have a special User ID just for selling domains. For the “great” domains, I list them on one (or all) of the top domain selling sites. This usually takes me longer to sell it, but I will get a higher price for the domain on average. Occasionally, you may “get lucky” and have an interested buyer contact you directly. In this case, you can arrange the transaction however you would like.

Selling Domain Names on Auction Sites

There are a few auctions sites around where you can sell your domains. I usually sell on eBay.com because it is the most popular auction site & I already have accounts established.

To get started, sign into your eBay account. If you do not have an eBay account, you can sign up for one free. Once you are signed in, click the “sell” link. You will then be able to make a listing & list your domain for sale. When you list your domain, you will be charged a listing fee which varies based on the price. You will also be charged a final value fee, but only if the domain sells. You can access eBay’s fee structure by going to eBay.com & clicking the “help” link.

If you sell several domains, then you can make one HTML template & use it over & over again. This makes listing your auctions much faster. I use a simple template with the sales pitch & description typed out & I just change the domain details for each listing. You will also be able to set the price & choose from auction format, fixed price (buy it now), or a combination. I would recommend either choosing a buy it now price or starting an auction for the minimum price you want to sell. This way you won’t have to sell it for less than it’s worth. This is important because many times you may only have 1 interested buyer & the bidding price will not increase with just 1 bid.

Also, don’t forget to “sell” the domain in the auction listing. Use persuasive language & explain why your domain is a good investment. Think of your potential buyers (businesses, individuals, & investors) & try to include selling points that appeal to each one.

The list below lists some important things to remember when selling your domains in an auction:

Selling Points & Tips Details to Include in the Auction

· Offer a free & fast “push” to the buyers account
· Point out the domain’s features (few characters, short, catchy, etc.)
· Could be branded for a business
· Potential to increase in value
· Great name for a website
· Rare/ Quality domain
· Appraisal value (free or paid)
· Use an eye catching gallery picture
· If you have trouble selling a domain, consider using a promotional tool (highlight, bold, featured , etc.)
· The domain’s expiration date
· Where the domain is registered (Godaddy, etc.)
· How it will be transferred (e.g. free push to buyer’s account) & how quickly.
· Payment method you prefer
· Any back links, indexing, or traffic the domain receives

Note : Also remember to instruct the buyer to send the following information along with payment: First & last name, email address, phone number, and home/business address. You will need this information to “push” the domain to the buyer’s account.

You will also need to indicate which payment method you will accept. You have several options. You can have the buyer send a business or personal check, pay through Paypal.com, money order, wire transfer, etc. I usually stick with Paypal.com because you can receive the funds instantly to your email account. I stay away from methods that involve western union money grams or other unusual payment methods. These can sometimes be scams. Instead stick with a securepayment method, insure the payment clears, and make sure the buyer’s information matches the payment information.

How to Push/Transfer Domain Names to Another Person:

Once the payment has cleared, you can then “push” the domain to the buyer’s account. To do this, you will have to log in to your registrar’s account. Again, you will want to select a company that allows you to “push” the domain to an account without having to wait for 60 days. Since I use Godaddy.com, I will take you through the steps of “pushing” the domain.

First, log into your account by entering your account name & password. Then click “My Account.” Next, click the “Manage Domains” link. You will then be able to view all the domains you have registered. To “push” the domain to the buyer’s account, select the box next the domain and then select “Account Change.”

Then it will bring up a window to enter the new owner’s information. Make sure to fill that section out completely with all necessary information.

You will then be asked to “confirm” or “save” the changes. Click the “confirm” or “save” button. That’s it! This will initiate the push to the buyer’s account. Then the buyer needs to simply log into their Godaddy account within 10 days & accept the changes. The domain will then be in the buyer’s possession. This is the easiest & fastest way to flip domains for a profit. Not only is the “push” free, it also gets around the 60 day waiting period because you are only changing the account information (not registrar companies).

Domain Specialty Sites

If you feel you have a really good domain and you want the maximum amount of money you can get, then I would suggest selling it on one of the top domain sellingsites. The top selling sites are: Afternic.com and Sedo.com. The advantage to selling on one of these sites is that you will get great exposure to serious domain buyers. Many large businesses, domain investors, and individuals will seek a specialty domain selling site for quality domains before they will consider auction sites. Again, in my personal experience you can usually get more money for your domain if you use one of these sites designed to deal especially with domains, but it may take longer.

Each domain selling site has a different fee structure. For instance, Sedo.com allows you to list your domain free, but you will be charged a commission of around 10% (with a $50 minimum) when the domain is sold. Afternic.com requires you to join a $19.99/yr. membership to list domains for sale, plus a commission when the domain is sold. TDNAM.com (another popular site) charges a $4.99 annual membership fee plus a 5-7% commission on the final sales price. These sites are usually worth the extra expense if you have a good domain.

Which site is the best? It really depends on which fee structure and features best suits your preferences. I usually make 80% of my “great” domain sales on Afternic.com & Sedo.com, but I have also made sales on tdnam.com and other smaller forums or sites. In fact, I usually list my domain on every site that I can for maximum exposure. The more people you can get to look at your domain, the better your chances are of selling it.

To get started selling your domains on one of these sites, simply create an account and pay any necessary fees. You will then be able to list your domain for sale. You may also want to consider extra marketing or selling promotions that are offered. For instance, on most sites you can get your domain featured on the front page, or marketed more aggressively for an extra fee. This is obviously an extra expense, but it could give a good return on your investment if you are able to find the “right” buyer by doing this.

When it comes time to transfer or “push” your domain, the process will usually be the exact same as mentioned before. The only difference is that the company that you are using (e.g. Afternic.com) may have an “escrow” service. This is simply a service that makes sure the buyer’s funds & seller’s domain are exchanged without a problem. You will still “push” the domain to the buyer in the exact same
way.

Money Maker # 2: Flipping Expired Domains

The process of registering & flipping new domains is very simple & straight forward. Buying & flipping expired domains, however, can get a little more complicated. Not only will you have competition also looking to get the domain, but the whole process can take longer, and the domain itself may end up costing considerably more. But remember, many of these expired domains could have existing traffic & links, making them well worth the additional hassle. Now let’s go through the steps of buying an expired domain & flipping it.

Step 1: Finding Expired Domains

To find expiring domains, start checking the websites that have lists of expiring domains or use your expired domain software. Also, it is a good idea to find a site or use software that allows you to search through the different expired domains as well as check features (such as traffic, etc). The table below lists some great sites to search for expired domains:

Expired Domain Sites
www.DeletedDomains.com
www.DropScout.com
www.DropHunt.com
www.Tdnam.com
www.ExpiredDomains.com

Now you can begin to search through the thousands of domain names that will soon be expiring. Again, try to stick with quality domains that have existing traffic. You can use search tools on the software or website to find domains with certain extensions, or domains that contain certain words. This is very helpful to weed out the “bad” domains so that you can find the “great” domains.

Step 2: Backorder the Domain

After you find a domain that you are interested in purchasing, you should first try a backorder service. A backorder service is a serviced performed by a company (normally a registrar) in which an attempt is made to register the domain as soon as it becomes available. Remember, domains don’t expire when they say they willexpire. Instead, they will go through a long process of 30-60 days. As soon as you see a domain you are interested in buying, choose a backorder service.

Before I do this, I will find the registrar that the domain is currently registered. You can do this by using the software/website, or by performing a quick WHOIS search. To do a WHOIS search, just go to a site like NetworkSolutions.com (or go to Google.com & enter “WHOIS lookup”). You can then find out the domains registration information. Then, I will try a backorder with that company. Usually, backorders are more effective when they are performed by the company in which the domain is currently registered. However, you can use multiple backorder services for the same domain to increase your chances of getting it.

Some popular companies that will allow you to use a backorder service are: Godaddy.com, Pool.com, eNom.com, SnapNames.com, NetworkSolutions.com, and more. Some of these companies will charge an upfront fee to use a backorder (such as Godaddy.com), but if the backorder is unsuccessful you can re-assign the service to another expiring domain. However, some companies will allow you to use backorder for free, and you only pay if the backorder is successful. Fees can range from $20-200. Godaddy.com actually has a fairly reliable backorder service.

I usually will use Godaddy.com and then follow up with as many free services that I can (such as Pool.com, etc.). This combination has worked well for me. Just make sure you understand the fees & terms of each company that you use.

Domain Auctions

If the company is successful in the backorder request, then you will usually be notified via email & you will be able to assume control over the domain. Many times, the backorder charge will cover the registration & ICANN fees. In this case, everything is over and you will have your domain name. However, if there are multiple backorder requests, the domain will usually go into an auction.

A domain normally goes into an auction if there are multiple backorder requests with the registrar that obtains the expired domains. In this situation, you will be allowed to enter a bid against other interested individuals that have also backordered the domain. This is where you must be careful. Bidding prices can get out of control. It is easy to get caught up in emotions & bid more than the domain is actually worth. I always do my research to find out the value of the domain. I will then set a figure in my mind and I will not go beyond that figure. Also, remember to keep track of all of your fees. The backorder fees are not included in the auction bids.

If you are the winning bidder, then you will be able to acquire the domain. You can then flip the domain on an auction or domain selling site (preferred). This is similar to flipping unregistered domains. The only difference is with unregistered domains, there isn’t as much competition & the registration/buying process is much easier. You simply buy low, and sell high. With expiring domains, the process is much lengthier, competitive, and requires more of an investment. With this method you buy high, and sell higher. However, you must remember that expired domains can be like a block of gold if you get the right one & use it in the right way.

More Money Makers: Paid Parking

How to Make Money With Domain Names-Intro
What Is a Domain Name Exactly-Chapter 1
How to Find Profitable Domain Names-Chapter 2
How to Estimate and Appraise Domain Value-Chapter 3
How to Make Money and Profit from Domains-Chapter 4
How to Make Money and Profit from Domains-Continued
Domain Name Tips & Tricks-Chapter 5

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