Domain Flipping
Domain Flipping In 2022: Everything You Must Know
Are you thinking about getting into domain flipping?
Domain flipping is a very lucrative business that has the potential to make you a full-time income while working part-time hours.
The right domains can sell for thousands of dollars and more often than not it’s just a game of arbitrage – buying from one place, and then selling elsewhere.
As if that’s not enough, you can get started for less than $10.
In this post, I will share my five-step process for getting started with domain flipping.
What Will I Learn? [show]
What is Domain Flipping?
Domain flipping is when you buy a domain name as cheaply as possible (sometimes you can even find a free domain). Then without doing anything with the domain, you sell it to another person for more than you originally paid for it.
Once sold, you get to keep the profit from the sale.
When done well and at scale – you can build a profitable domain flipping business that creates more than a full-time income.
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How To Start Domain Flipping Step by Step
So how do you get started in domain flipping for yourself?
Here is the exact five-step process I use to flip domains profitably.
Step 1: Search For A Quality Domain
There are tons of ways to find domains that are great for flipping. You just need to know where to look.
These are the places that I use to find quality domains at really good prices.
1. Spamzilla
SpamZilla is one of my favourite tools to find domains to flip.
It is one of the only domain databases that shows backlink data. That means you can use it to find domains that have huge SEO value and large backlink profiles already.
Want to learn more about SpamZilla? Check out my full SpamZilla review.
2. Domain Hunter Gatherer
Domain Hunter Gatherer (DHG) is a desktop-based tool.
It allows you to search in real-time and find high quality expired domains. DHG has a range of powerful tools that allows you to quickly and easily analyse the quality of any domain.
Learn more about DHG by reading my Domain Hunter Gatherer review.
But what I really like about it, is that you can make sure you only find domains that have existing links from places like Wikipedia which add to their resell value.
Both SpamZilla & Domain Hunter Gatherer are super powerful and offer all of the features you need to find profitable domains you can flip!
3. Domain Catching
Domain catching is when you buy domains right at the moment that they expire.
That is hard work though and means you need to be online 24/7 to seize the perfect moment AND that is assuming that no one else is trying to register it as well.
There are a number of services to help you get a competitive advantage though:
These services will help you automate the process of getting domains right at the moment they expire – before anyone else can.
Step 2: Evaluate The Domain (Before Buying!)
Evaluating the domain is a critical step you can’t miss.
Here’s why:
Not all domains are created equal.
You need to have the mindset that when you invest in a domain name, is the moment you make a profit or loss. It’s not at the time you sell the domain.
What does this mean?
If you buy a valuable domain at a good price, you will make a profit.
But if you end up buying:
- A domain for more than it’s worth
- A domain that no one wants
- A domain with a bad history with Google
- Or even a blacklisted domain
…you will lose money every single time. That means that you need to be sure that the domain you’re buying will sell for more than you paid before you purchase.
That decision is made before the purchase, not when you sell the domain. So, how do you know whether a domain name is likely to sell or not?
Simple: You need to know how to determine the value of any domain name.
Click here to learn how to check your domain ownership history & historic domain authority.
How To Determine The Value Of A Domain
There are a number of key factors that will affect the value of any domain name.
The four big factors below are what you need to focus on. Each of these will help you value your domain at the right price.
1. Pay Attention To The Top Level Domain
The top-level domain (TLD) is the ending of the domain name such as .com.
There are tons of different TLD’s you can buy these days. But not every TLD is popular and profitable. You need to make sure that you are buying TLD’s people are interested in.
The six most popular top level domains are:
- .com
- .net
- .org
- .co
- .io
- .me
The best TLD is .com because it is far more popular than any of the others. People are most familiar with that TLD and therefore tend to trust sites that have a .com TLD.
2. Is The Domain Brandable?
The most popular websites in the world all have brandable domains.
Brandable domain names are:
- Easy to remember
- Often less than 10 characters
- Unique and distinctive
Buyers often become attached to a specific name. This means they will pay more for a domain that exactly or closely matches that name.
Brandable domain names are much easier to flip and often fetch a higher price.
3. Make Sure Your Domain is Search-Friendly
Does a domain name really matter for SEO? Yes.
You want people to know exactly what your site is about just by looking at the domain.
Domain names that contain an SEO keyword are more likely to get clicked on in the SERPs. It may also help the site rank higher overall.
Here’s how I determine a search-friendly domain:
- Does the domain name contain a keyword?
- Does the keyword have over 200 searches per month?
- Is anyone bidding on the keyword for Google ads?
If you can answer each question with a yes, you have found a valuable SEO friendly domain.
Note: The number of searches for the keyword in the domain is a good indicator of the overall interest in the domain’s topic. The higher the number of searches, the easy it is to sell the domain.
4. What Is The Backlink Profile Worth?
A lot of a domain’s value can come from its backlink profile.
Think about it…
Building a backlink profile for any domain takes time and money. Starting with a domain that already has a powerful backlink profile (including edu backlinks, gov backlinks, editorial backlinks, etc.) behind it gives you a huge boost.
The way I value a backlink profile is simple:
A reputable link building service charges between $170-$220+ to build just 1 link.
So I like to do a complete backlink audit on the domain to see:
- How many quality backlinks the domain has
- What the domain rank of each backlink is
- Calculate how much it would cost to repliacte the backlink profile
To do all of this I use Ahrefs:
The next part is easy.
Simply multiply the number of backlinks by the average cost link building services charges to build 1 link.
For example – imagine a domain you’re interested in has 31 quality backlinks and it costs an average of $195 for a link building service to build 1 of those links.
The formula would be: 31 x $195 = $6,045
The backlink profile alone in this example makes the domain name worth at least $6,045.
Editorial links from well-known sites such as the BBC & New York Times are worth $2,000 to $5,000. Make sure you take into consideration these kinds of links as well.
Step 3: Register The Domain Name
Now you should have a good idea of how to value the domain you are interested in.
The next step is to simply buy it and register it.
This can be relatively simple. When you purchase the domain, the service you used to buy the domain from will provide you with the registrar where the domain is hosted.
They will require you to provide your registrar so they can transfer the domain.
There are tons of domain registrars out there. You need to choose a reliable domain registrar that offers good support.
The most popular domain registrars are:
My personal domain is registered on 123Reg which is a reliable domain name registrar based in the UK.
Step 4: Find The Right Buyers For The Domain
You don’t want to just sell the domain to anyone.
There are three strategies that you can use to sell your domain profitably.
1. Buy-And-Hold Method
The buy and hold method is exactly what the name says…
You buy the domain and hold onto it, waiting for it to increase in value and for someone to actively find you.
This method is the slow way of selling domains. But can yield a bigger return.
You simply set up a landing page on the domain advertising it for sale. Make sure that you include what makes it valuable, highlighting the benefits for the buyer.
Interested buyers can contact you through the landing page to show their interest. Simple.
2. List Your Domain At An Auction
This is the fastest method of selling your domain.
You simply list your domain on a domain name auction site such as Godaddy auctions. Auctions usually go for 30 days or more and interested buyers can bid on your auction.
The domain at auction method is a great way to get lots of interested buyers.
It’s best to start the auction at significantly less than your domain is actually worth. This is how you get tons of people bidding in the auction.
Worried about selling it for a price less than you want?
You can also set a reserve price for the domain so that removes that risk however that often puts off early bidders and prevents bidding wars.
The problem with the domain at auction method is that you may have to relist your domain a number of times before it actually sells at the reserve price you want.
If the auction doesn’t reach the reserve price you set, you can negotiate with interested buyers after the auction finishes.
3. Create Your Own Marketplace
Feeling a little more entrepreneurial?
You can create a small marketplace and list all of your domains for sale there. A good example of quality domain name marketplaces is TB Solutions.
The key to making your marketplace successful is curating a portfolio of valuable domain names. You don’t just want to offer one domain. You’ll need to build a bigger portfolio of domains.
Long-term you will need to:
- Build a brand.
- Establish yourself as a trusted provider of quality domain names.
You might even choose to niche down and only offer domain names for a specific industry. This takes longer to get up and running but the payoff can be HUGE.
You are basically running a business, so you will need to take care of everything from operations to marketing.
Step 5: Sell The Domain
Kaching! It’s time to collect payment and transfer the domain to the new owner.
You need to ensure that you have the processes in place to:
- Protect yourself.
- Ensure a smooth transaction.
The best way to do that is to use an escrow service.
An escrow service is just like a broker between you and the buyer. You make an agreement detailing the terms of the sale and the escrow manages the sale.
Here’s how it works:
- The buyer will pay the escrow service.
- When the escrow service receives payment, they will send you a notification to transfer the domain.
- Once the domain has been received the escrow service pays you the money.
If either party doesn’t hold up their end of the deal, the escrow service will have all the details to take care of the issue.
Popular domain listing sites have their own escrow services.
Although an escrow service will take a small percentage of the sale, the peace of mind they offer far outways the price you pay.
If you need help with the negotiation process, consider hiring a domain broker.
What Are The Advantages Of Domain Flipping
There’s no doubt about it:
Domain flipping has huge upside potential that can’t be ignored.
That’s what makes it such an attractive business to get into. Here are a few reasons you may want to consider it.
Make Extra Income
Who doesn’t want to make extra income right?
Domain flipping offers you the opportunity to:
- Earn income as a part-time hobby.
- Run a full-time profitable business.
It’s completely up to you! You can make unlimited income finding, buying and flipping domains – all from the comfort of your own home.
Easy To Get Started
You can start domain flipping today. As long as you have:
- An internet connection
- A laptop
- A credit card
…you are good to go. Domain flipping doesn’t really require anything else.
The most important thing is that you learn how to value domain names. There is no other previous experience required.
Once you have that skill down – the sky’s the limit.
Low-Risk
Domain Flipping is low risk because it has a very low barrier to entry.
You don’t need to be buying domains for thousands of dollars to make a profit. You can start by finding quality $10-$15 domains and flip them.
By doing this you:
- Start with a low investment
- Minimise any risk
- Build your cash for future investments
- Learn before your make bigger investments
Domain flipping allows you to start small and grow as you learn more. There is no need to invest tons of money until you are ready to scale.
What You Need To Know Before Starting Domain Flipping
Now I am sure all of this has got your blood pumping. Domain flipping really does have a ton of advantages over other online businesses.
But there are a couple of things you should consider before you get started.
It is NOT A Quick Way To Earn
Successful domain flippers all have one trait in common:
Patience.
You don’t want to rush in and buy every single domain that seems like a good opportunity. You need to have the patience to find the right domains at the right price.
Patience is also required on the selling side.
In most cases, your domains are going to sell fast. Other times, you might have to wait a few months and list your domain a few times before you get any qualified buyers.
If you are looking to make a quick buck – domain flipping is not for you.
It Is An Active Process That Requires Time & Motivation
Flipping domains profitably involves a lot of time and effort to:
- Evaluate each domain.
- Ensure it’s a good investment.
You need to be motivated and committed to the process. It’s not always easy to find the winner. But when you do… It can really pay off.
You’ll Make Mistakes
It is as simple as this:
Not every domain you buy is going to make you tons of money. Expect that you will make mistakes and that’s totally ok.
It’s all part of the process. The most important thing is that you can:
- Identify what went wrong
- Learn from it
Make sure that you have a solid process that you continue to build on.
The Benefits You Make Are Taxable
Like with any business, when you make a profit – that profit is taxable.
Domain flipping is similar to trading stocks. When you buy a stock and it goes up – you sell it right?
The profit you make from that sale has to be declared and is eligible to be taxed.
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Wrapping It Up
Domain flipping is a great and completely legit way to make extra money…
It is low-cost and easy to get started and has very little risk. You can even run it as a hobby on the side or make it into a full-time business that has lots of passive income potential.
Now you have all of the information you need to get started with domain flipping.
The key is to make sure that you have a good process in place. This will help you consistently choose valuable domains that generate great returns.
And a lot of patience won’t hurt either!
Frequently Asked Questions
Is domain flipping profitable?
Yes, domain flipping can be very profitable. But it takes time and patience before you really start to create an income out of it. If you are dedicated to making it work, you can make a lot of money from domain flipping.
Is domain flipping legal?
Yes, domain flipping is completely legal. You just need to be aware of your country’s tax requirements. Any profit or benefits you make from domain flipping may be subject to tax laws.
How much do domain flippers make?
You can make unlimited money from domain flipping. Once you get a solid process in place, the sky’s the limit. A full-time domain flipping business can generate upwards of $100,000+ per year. If you are just doing domain flipping part-time, you can expect to make $200 – $500 per month.
Where can I buy good domains from?
There are lots of places to buy good domains from. Domain.com, Godaddy and Namecheap are all great places to buy good domains. You can purchase domains for as little as $10 or less.
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