Are you familiar with the process of “flipping” an asset? Maybe you’ve watched TV shows about buying run-down houses, restoring them and selling them at a profit.
Flipping domains works the same way.
This straightforward and potentially lucrative business model is a great approach for small business owners and individuals looking to offer additional services to their clients while avoiding high startup costs.
Domain flipping is becoming increasingly popular, which isn’t surprising considering how big the market is. InterNetX’s 2023 Global Domain Report found that as of September 2022, there were over 160 million registrations just for domains ending in .com.
Many entrepreneurs are taking advantage of the massive demand for domains by undertaking this relatively accessible and beginner-friendly practice.
That being said, domain flipping still requires a strategic approach, which is why we’ve put together a step-by-step guide that will help you get your domain-flipping business off the ground.
In addition, we offer some strategies that will help you grow your domain portfolio and maximize your profits.
Domain flipping is a straightforward process. In order to flip a domain, you first buy a domain and then resell it for a higher price.
Despite the relative simplicity of this practice, it necessitates other business activities such as searching for great domain options from domain sellers, appraising domains, finding the right buyers, marketing your domains and transferring purchased domain names to customers.
Before diving into the step-by-step specifics of how to flip domains, you should determine if this approach is right for you.
Domain flipping could be a great option for you if you have research skills, the ability to monitor keyword and market trends, extra time for finding buyers and patience.
1. Research domain name ideas
2. Monitor trending domain extensions
3. Search for domain names
4. Assess domain names
5. Buy the most valuable domains
6. Determine a pricing strategy
7. Decide how and where to sell domains
8. Create and post domain name listings
9. Update WHOIS for your domains
10. Target and market to high-quality buyers
11. Sell and transfer domains securely
Coming up with domain name ideas might seem daunting at first. There’s an infinite number of names and combinations you could try — but which ones will end up being profitable?
One way to get started is by seeing what your competitors are doing. By searching for domain flippers on Google and analyzing their approaches, you can gain inspiration, knowledge regarding which strategies are helping them succeed, and insights on which approaches aren’t working.
Another thing you can do is use tools like Ahrefs to search for keyword ideas. Keywords with a high search volume indicate a high level of interest, so domains featuring those keywords are likely to be more attractive to buyers.
Tracking domain sales with sites like NameBio is also a good way to generate domain name ideas. These platforms can tell you which types of domains are selling for higher prices, which you can use to inform your own domain purchases.
As you research domain names, you should track trending and unique TLDs (top-level domains). TLDs are the extensions at the end of a URL, such as .com, .org, .gov or .io. While there are close to 1,500 TLDs in existence as of 2023, only a few are used regularly.
For example, InterNetX’s findings highlight:
- Some new general TLDs (gTLDs) are trending, including .xyz and .online.
- GeoTLDs can be popular, like .asia and .africa, as well as city TLDs, like .berlin.
Country-code TLDs (ccTLDs) are also an option, including .uk, .ga or .ml.
Searching for competitive domain names is arguably the trickiest part of the domain-flipping process. When learning how to flip domains and looking for the best options, it helps to get inspiration from a domain name generator.
Seek out potentially valuable and high-quality domains, as these will produce higher profits. The value of domains varies greatly, but valuable ones usually have:
- High traffic rates, which suggest high demand: Some domains are frequently visited, making them much more appealing to business owners looking to reach customers, establish their brand and build a high-traffic website.
- Single-word structure: Short and sweet domains are generally more profitable. They become catchy, enhance credibility, help with brand recognition and leave less room for user-input error.
- Relevant keywords: Some domains integrate keywords related to a type of product, service, website or location. These are descriptive domains, and they present profit potential for a business, which, will in turn, pay you more for them.
- Branding potential: Brandable domains are short URL segments that are memorable, catchy and “made up” rather than descriptive. They don’t feature specific keywords but instead have a unique combination of letters that could be branded later. Think Google.com, Etsy.com and Bing.com — before their corresponding companies existed.
- Backlinks: A domain with pre-established backlinks will be more valuable than one without any for several reasons, including search engine optimization (SEO) authority.
- A good history: Existing or expired domain names with a favorable past usually have more value than new domains. You can determine domain history with tools like URLTrends and WhoisRequest.
You should also refer back to your findings from the research stage, as domain value also depends on context. For example, a domain such as ai.io may not have been high-value before the birth of artificial intelligence but is decidedly valuable today.
Based on all your research so far, which domains look the most valuable? Once you’ve chosen, make sure you buy them from high-quality domain registrars like Bluehost.
Any platform you use should be reliable, transparent and security-oriented. It should also provide 24/7/365 customer service. That way, you minimize delays if your registration hits a snag. With round-the-clock support available, someone can promptly help you get back on track with your domain-flipping journey.
Not to mention, receiving attentive customer service from your domain registrar helps you provide the best service possible to yourcustomers in turn.
There are many ways to sell your newly acquired domain names. You can take part in domain auctions, list domains at a fixed price or send out your own offers.
Auctions with flexible pricing are more likely to produce higher profits, while fixed-priced domains are more likely to sell quickly. The make-an-offer pricing method can fluctuate in results.
Once you select your pricing method, consider using profit-enhancing strategies, including:
- Charm pricing: This psychology-based strategy involves opting for prices that end in the number nine rather than zeros. According to Konigle, this tactic has been shown to increase conversions and brand recognition.
- Cost-based pricing: This widespread method involves calculating the cost of making a product, then adding a comfortable margin of profit. Cost-based pricing is a streamlined, straightforward way to set a standard markup for your domains.
- Market-based pricing: This strategy is centered on what competitors are charging for related products. Refer to market prices for similar domains, then price yours in the same range.
When choosing a marketplace or auction site, consider factors like commission percentage, listing fees, traffic rates, user experience, customer reviews and the array of additional features offered.
Examples of additional features are user-friendly control panels, notifications and domain transfer services.
Alternatively, you can partner with a domain broker, a professional who helps you find buyers and facilitates sales. These brokers take a commission but can be well worth it — especially if you get in-demand domain names. Find one via Sedo’s Domain Brokerage Service.
If you’re not using a domain broker, you’ll need to list the domains on your chosen selling platforms. To create an optimized domain listing, you can:
- Utilize banner ads: Incorporating banner ads on your listings helps grab attention, redirect buyers to other domains in your portfolio and increase your authority as a domain seller.
- Include relevant geographic keywords: If you’re selling domains that would appeal to local business owners or potential buyers within a specific area, then make sure your listing features the names of relevant regions, cities or countries.
- Create concise descriptions: Keep domain descriptions simple and short, including only the most important information. Refer to your target audience and buyer persona to determine which details to feature.
- Showcase your trustworthiness: Include great customer reviews, provide clear and accurate information, present pricing transparently and showcase any security specs for your domains.
- Make a parked domain: Create an aesthetically appealing landing page featuring a link to the domain listing.
Now it’s time to post the listings. If you’ve selected a high-quality platform, this process should be simple. Usually, you’ll just be asked to input your listing info, select your pricing method and define a time period for each domain auction or make-an-offer listing.
WHOIS is a public directory managed by the Internet Corporation for Assigned Names and Numbers (ICANN). It stores info on who’s responsible for which domain names. More specifically, you can self-report your identification and contact info along with your domain name registrations.
Updating WHOIS for your domains isn’t a necessity, and some domain flippers prefer to keep this information private. But completing this step makes it easier for interested buyers to contact you, which is one step closer to landing a sale.
Create a buyer persona representing your ideal client. For example, imagine your domain would be appealing to IT agency owners who specialize in web apps and operate near Dallas, Texas. After adding more details to the persona, you name it “Techy Teddy” for memorability.
Creating this buyer persona will help when you’re searching for businesses or individuals who may be interested in purchasing your domain. Compare each potential buyer to Techy Teddy, and it will be obvious which prospects you should put time toward.
But how do you chase those leads? Target prospective customers with strategies like:
- Social media marketing: According to HubSpot’s 2023 State of Marketing Report, short-form video content — which is primarily created and distributed on social media — is the strategy most highly prioritized by marketers in 2023.
- Content marketing: Focusing on creating people-first content is critical for ranking on search engines like Google. You can do this by tailoring content to a buyer persona and demonstrating your authority in the space.
- Email marketing: Illustrated by Semrush’s The State of Content Marketing: 2023 Global Report, customer engagement via email is currently the second most popular metric for measuring the success of content.
Above all else, you’ll need to showcase the strengths of your domains, specifically as they relate to your buyer persona. For example, highlight how exactly your domain can benefit Techy Teddy’s IT business rather than the generic benefits of domain names.
If your pricing strategy allows it, try to negotiate up to the highest price you suspect the buyer would pay.
Once they’re ready to make a purchase, close the deal with a domain sales agreement that outlines terms and conditions. This documentation lays out:
- The domain’s relevant details, such as the date of registration.
- The contact information of the buyer and seller.
- The sale price.
- The process of transferring the domain.
This agreement form is helpful for avoiding scams, maintaining seller authority, preventing legal issues and ensuring satisfaction on both sides.
Once a buyer purchases your domain and you complete the agreement, you’ll need to provide them with a copy for their records.
To mitigate the risk of scammers and instill trust in buyers throughout the domain transfer process, you may want to use an escrow service — a secure transfer that stores your ownership securely with a third party until payment is confirmed.
Now that you’ve considered every step in flipping individual domains, let’s go over how to grow your portfolio and your profit margin.
According to data collected by W3Techs, .com is the most popular TLD, as it’s used by 47.8% of all websites globally. So by seeking out .com domain names, you’re more likely to have an easier time finding buyers.
Some domain flippers prefer to pick a lane and stay in it. This is also known as choosing a niche.
That niche could be based on:
- A particular TLD — for example, specializing in .net domain sales.
- A category of keywords within a topic, such as travel reward credit cards.
- A specific type of website, such as eCommerce clothing brands.
With this level of focus, you’ll develop expertise in your niche and, with practice, learn how to spot domain names that will be popular with buyers.
On the other hand, some domain flippers prefer to diversify by building a varied portfolio.
You can do this by snatching up a range of domains in various niches — such as high-value URLs for new tech sites, expired domain names with backlinks and domains with trending TLDs.
Having a diversified portfolio helps protect you from unexpected industry changes that cause certain types of domains to drop in value.
You can buy a taken domain name rather than an available new domain. How? By negotiating with the owners to acquire active domains.
Make the perfect domain offer by accurately assessing the domain’s value, then proposing an amount that’s lower than your maximum budget but high enough to warrant consideration.
This profitable domain-flipping strategy aims to defend brands or businesses from their competitors.
An example of a defensive domain strategy is flipping domains with typos, misspellings or plurals of a popular brand name. Brands are often interested in buying those domains just so competitors and frauds can’t use them.
Domain flipping is like refurbishing a house or clothing item, except it can be done from the comfort of your couch. It may be the perfect way to make money if you’re willing to put time and effort into market research and trend monitoring, then execute strategic buying and selling.
Now that you understand how to flip domain names, you can start building a small business, offer the service to clients or cultivate a lucrative side hustle.
One way to make your domain-flipping business stand out is with a beautiful and responsive website.
At Bluehost, we offer shared hosting plans that are both cost-effective and feature-rich, so you get everything you need to get your business site off the ground fast.
Contact us today to learn more about how partnering with Bluehost can help advance your domain-flipping business.
You can sell domains for anywhere from cents to millions of dollars. Sale prices depend entirely on the buyer’s perception of a domain’s value, which is determined by a variety of contextual factors surrounding how much profit the domain can attract.
Brandable, memorable and short domains are usually more valuable. Domains with a robust and positive history, SEO authority, relevant keywords and high traffic rates are also prized. You can check domain value with appraisal tools like EstiBot.
Unfortunately, there isn’t a way to permanently own a domain name. But you can choose long-term domain “ownership” periods if the registrar allows them and set reminders to renew your registration once that period is over.
Yes, it’s legal to buy and sell domain names. This business process is completely legitimate as long as you’re careful about avoiding cybersquatting when flipping domain names similar to trademarked or copyrighted phrases.