Small Business Idea: Buying and Selling Domains

by Danielle Bloom

3 min read

Purchasing and re-selling domains for a profit, sometimes called domain speculation, can be a lucrative business idea for anyone who wants to make a bit of extra money. It’s not always easy money, though. To turn buying and selling domains into a profitable business, you’ll need to be aware of search engine trends and domain marketplaces.

Why Buy and Sell Domains?

Buying and selling domains can be a profitable side business. Freelancers or people with irregular schedules find it especially convenient, as domain auctions and sales operate on very limited time frames. Don’t expect to be able to quit your day job and make a full-time living with domain speculation. Your profits will depend largely on market and search engine indexing fluctuations, and these can be difficult to predict. As a business model, buying and selling domains is relatively easy. All you need to get started is a laptop and an internet connection. You can do your own research to find out which domains are selling for the largest sums and how much money you should set aside for purchases. Some established domain speculators keep portfolios full of hundreds of domains they’ve purchased, waiting for a particular search term to become popular and profitable. This type of investment can require a lot of money up front, not to mention a substantial understanding of risk.

Purchasing the Right Domains

Knowing which domains have the potential to become profitable requires some luck, but you can get a better idea of what you should be looking for by having a basic grasp of Search Engine Optimization. It’s easier to obtain valuable domain names when you have some idea of what people are searching for. Keep in mind that the types of domain names that are optimal for today’s search engines may not be a few months down the road. In the early 2010s, very general domain names such as “artgallery.com” or “localmovingcompany.com” were indexed high on Google because they closely matched common search terms. In 2012, Google launched the Exact Match Domain penalty for sites that have a generic domain but very little in the way of quality content. This can be bad for a domain value, as you’re usually only purchasing the domain itself, not a fully-functional website. Recently expired domain names may be profitable because they can still have active back-links that help index them higher in a search engine. Back-links are links to the domain on other existing websites.

Selling Domains for Profit

You want to make sure that you’re getting the absolute best value for your domain. Marketplace websites like Sedo allow users to buy and sell domain names at auction. The more valuable the domain, the busier the auction, which leads to inflated prices. Keep in mind that auction sites offer a lot of competition as well, and you may see more engagement if you’re selling a large number of domains at the same time. Another strategy for selling domains effectively is to seek out forums and platforms devoted to a particular audience for whom the domain name is relevant. If you’re trying to sell “bcsalmonfishing.com,” for instance, you might try your luck on a fishing-related forum or blog. While purchasing a domain that includes a trademarked name and selling that domain back to the trademark holder may sound like a viable get-rich-quick scheme, it’s often an invitation for a lawsuit and it’s wise to avoid this strategy.Buying and selling domains can be an exciting, challenging, and sometimes profitable business. Remember to start small and be smart with domain investments.

References & Resources

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