The internet domain market is a unique and burgeoning economic landscape. Fueled by low startup costs and the potential for high returns, it’s an appealing entrepreneurial venture. Buying and selling domain names can be lucrative, especially when you master the art of marketing and building domain authority. Let’s delve into the hows and whys of this digital marketplace and how to get started with domain trading.
Economics of the Domain Trading Business
Domain trading operates much like real estate: you buy a piece of digital property (domain name) and later sell it at a higher price. The economics of this business is driven by supply and demand. Premium domains – short, simple, easy-to-remember names or ones with popular keywords – are in high demand but low supply, thus commanding higher prices.
Low Startup Costs of Domain Trading
One of the main attractions of domain trading is its low startup costs. You can buy domain names from registrars like GoDaddy or Namecheap for as low as $10 per year, sometimes even less during promotional periods. The key is to identify potential value in a domain name which others may overlook.
Marketing Your Domain to Sell
Once you own a domain, you need to let potential buyers know it’s for sale.
- Listing on Marketplaces: Sites like Sedo, Flippa, and Afternic allow you to list your domain for sale. They offer visibility to a vast pool of potential buyers.
- Outreach: Identify businesses that might benefit from your domain. A targeted email or LinkedIn message can pique their interest.
- Domain Brokers: Consider enlisting a domain broker who can use their network to find potential buyers, negotiate deals, and handle the transaction.
Building Domain Authority
Building domain authority (DA) can increase your domain’s value. DA is a measure by search engines that predicts how well a website will rank. Here’s how to build it:
- Quality Content: Regularly publish relevant, high-quality content that adds value for readers.
- SEO Optimization: Use SEO best practices like appropriate use of keywords, meta tags, and alt tags.
- Backlinks: Obtain high-quality backlinks from reputable websites. This can significantly boost your domain’s authority.
Real-World Examples
There are numerous success stories in the domain trading world. Take, for instance, the sale of Insurance.com which fetched a staggering $35.6 million in 2010. While not everyone can expect such monumental success, consistent profits are achievable. Chris Gimmer, the co-founder of Snappa, generated $50,000 within two years of part-time work in domain flipping.
Domains that have sold for six to seven figures
- Casino.ro: This domain was sold for $220,000 in 2017. ‘Ro’ is the internet country code for Romania.
- Crypto.com: This domain was reportedly sold for around $200,000 in 2018 and is now a popular cryptocurrency exchange and wallet.
- Ice.com: This domain sold for $3.5 million in 2018, a leading example in the jewelry industry.
- Ebet.com: Sold for $1.35 million in 2013, this domain is now a site for online betting.
- Investing.com: This domain name, sold for $2.5 million in 2012, is a financial platform that provides real-time quotes, streaming charts, and financial news.
- Ticket.com: Bought for $1.525 million in 2009, this domain redirects to a Norwegian travel booking site.
- Dating.com: Sold for $1.75 million in 2010, it’s now a global online dating site.
- CamRoulette.com: This domain was sold for $151,000 in 2010.
- Computer.com: Bought for $2.1 million in 2007, the domain currently redirects to a website selling computer accessories and electronics.
- Loans.com: Acquired by Bank of America for $3 million in 2000, this domain is now a loan and mortgage information site.
Domains that have sold for more than seven figures
- Insurance.com: This domain name sold for a staggering $35.6 million in 2010, setting the record for the highest domain name sale.
- VacationRentals.com: This was bought for $35 million in 2007 by HomeAway, reportedly just to keep it away from competitor Expedia.
- PrivateJet.com: Purchased for $30.18 million in 2012, this domain now belongs to a private jet charter company.
- Voice.com: In 2019, this domain name was sold to a blockchain-based social media platform for $30 million.
- Internet.com: Sold for $18 million in 2009, this domain now redirects to a digital marketing services site.
- 360.com: Chinese software company Qihoo bought this domain for $17 million in 2015.
- Insure.com: Bought for $16 million in 2009, this domain now hosts an insurance and financial services guide.
- Sex.com: Once a cause for legal battles, this controversial domain was sold for $13 million in 2010.
- Hotels.com: Bought for $11 million in 2001, it’s now a popular hotel booking site.
- Fund.com: Sold for $9.99 million in 2008, it’s currently an inactive site.
Conclusion
In conclusion, domain trading is a fascinating and potentially profitable business venture. While it requires strategic planning, marketing savvy, and patience, the low entry barriers and vast potential upside make it an attractive opportunity for digital entrepreneurs. Remember, however, like any business, it carries its own risks and challenges, and success may vary.
