How to Make Money by Flipping Domain Names – Part 3 (Final Chapter)

I do a lot of things online to make money, there’s CPA commission, Adsense, Amazon Associates program, revenue share, Clickbank, other affiliate programs, sell my own product, probably a few more that I’m not thinking of and oh yeah, there’s flipping domain names.  This is like all good series (Lord of the Rings, Indiana Jones – until they screwed that up with a Part 4, etc…) in that this domain flipping series of articles on Anticareer is closing out with this post, Part 3.  You can read Part 1 and Part 2 if you missed them.  Quick recap: Part 1 talked about how I picked up domains at auctions.  Part 2 talked about how to find some potential buyers for the domains you purchased and want to flip.

That brings us to Part 3 and in Part 3 we’ll talk about all the other stuff.  I’ll touch on another way to buy domain names that I did not cover in Part 1.  We’ll go over how to price your domain names.  Where to list your domain names for sale.  What you should say in your email when contacting people you are trying to flip your domain name to.  And in the event that I missed anything you can drop a comment below with your question and I will get back to you.  Also, just a disclaimer, I am not the foremost expert on domain name flipping.  I’ve been doing it for a few years.  I am profitable at it.  I make more money doing all the other stuff but I still profit well into the mid five figure range by flipping domains each year and I spend the least amount of time working on domain flipping… so my “hourly earnings” (if I were to calculate them) would make domain flipping my #1 paying “job”.  In short, I don’t know it all and my posts are based on my experiences and what has worked well for me.

In Part 1 I did not touch on another method to buy domain names that can work well, but it runs hot and cold.  That is by directly contacting domain name owners.  Sometimes I’ll type a domain name into my browser and see what’s on the site.  If the site is fully developed and looks like the owner put effort into it I usually don’t bother contacting that domain owner unless I really want the domain.  If I navigate to a URL and I see that there is nothing on the site, or the site is a static one pager that looks like it originated in the mid 90’s I will give that domain owner a shout and see what is up.  Sometimes the stars align and you will contact someone who has no use for the domain, they want to sell it, and you are the first one to ask them about it so you can negotiate a good deal.  Other times (and this happens most of the time) you’ll contact a domain owner who has read articles about domain names that have sold for six or seven figures and they have it in their head that their domain is worth that.  Rarely is that true, but once someone has something in their head it can be hard to convince them otherwise.  If you want to try you can find recent domain sales and show them what the current market rate is for a similar domain name.  But some people you just can’t talk down.

You can also go to a domain name marketplace like Sedo.com, Afternic.com, or one of the other domain name marketplaces.  There’s a bunch out there, Google is your friend if you want to find them all.  And on the flipside, as a domainer seller you can list your domains in these marketplaces in hopes of having a potential buyer locate your domain (most marketplaces will charge you a commission in the 10%-15% range if your domain name sells).

Almost forget, there are also domain name brokers who will try to move your domain names for you (provided you have a domain name that is semi valuable).  My rule of thumb is to always try to sell the domain first on my own so that I don’t have to pay anyone a commission and I can maximize my profit.  If I have no luck and I don’t want to spend the next 7 years trying to sell a domain than I’ll use marketplaces or domain brokers to try to sell it for me.

Moving on… pricing your domain.  You bought a domain name (let’s assume at an auction as mentioned in Part 1) and you want to flip the domain.  Just like any business you need to price your goods.  Think about what you paid for the domain name and what an acceptable profit would be for you.  The less profit you are willing to take the quicker you will be able to potentially flip your domain name.  Said another way, the more money you want to make on your domain the longer you may be sitting on that domain trying to find a buyer.

You need to determine what type of domain seller you are.  If you’re a quick flipper than buying a domain for $100 and selling it for $250 is a good day for you.  If you’re a value seller, you bought a domain for $100 and you think the value is $1,000 so you’re willing to part with it for $500.  Or you’re a patient profit maximizer, you sit on the domain in the previous example until you found someone who would pay you $1,000 or more.  It’s all about cash flow and profit in the domain flipping business.  Those of you who have low cash flow will be quick flippers, while those who have stacks of money can afford to be more patient if you want.  You need to come up with a plan and then stick to it.  I’ve seen people who bought a domain for $XXX, sold it for $XXXX, were happy with their sale until a few months later they see that same domain sold for $XXXXX and then they get depressed.  Why?  As long as you are accomplishing the goal that you set out to accomplish don’t look back in regret.  Maybe you can learn a thing or two for the future, but don’t hang your head.

What works for me?  Ok, because you asked:  What I do is look for quick flips on domains I buy cheap that I don’t see a ton of value with.  Why would I buy a domain if I don’t see a ton of value with it?  Because you can’t always hit a home run so you should also look for the singles and doubles.  If I buy a domain at Namejet for $69 or at GoDaddy for $50 I am happy if I can flip it quickly for a couple hundred if the opportunity presents itself (though I try to do quick flips and get as close to $1,000 as I can).

Now If I see value in a domain name (regardless of what I paid for it) I become a more patient seller and wait until I find a buyer who recognizes that value and is willing to pay me for it.  The quick flips can add up and give me that cash flow I need which allows me to be patient and sit on the higher quality domains waiting for that right offer to roll on in.  Sometimes you will get stuck holding a domain longer than you anticipated and you will need to reevaluate and see if you still believe in the value you assigned to the domain or if you should lower your expectations in hopes of getting this asset off your balance sheet, moving it to your income statement and recognizing the sale on your cash flow statement.

How to craft emails to move your domains?  When it comes to sending out emails to people you found (in Part 2) who may be interested in your domain name there is no magic bullet.  Nobody has an email text that is guaranteed to sell your domain.  It’s all about testing, tweaking, and revising.  How I frame my email usually goes something like this:  I’ll give them my name.  I’ll tell them the domain name that I own.  I’ll let them know any special qualities of the domain and/or the reasoning why this domain makes sense for them.  If I know the price I want I’ll tell them the price, or if I want them to make an offer and I’ll them to make an offer.  And I’ll let them know I’m sending out a similar email to a few different parties who may have an interest in this domain.  Putting it all together here’s how an email I send out might look:

Hi, my name is Chris.  I own the domain Anticareer.com and was contacting you today because I thought you may have an interest in acquiring this domain.  Anticareer.com was registered back in 1995 and this is the first time that I am offering the domain for sale.  As the owner of Anti-Career.com I thought your business could benefit from owning Anticareer.com.  If you are interested in the domain name I am open to offers.  I am sending out an email to other parties that I believe may be interested in this domain so my email to you is not exclusive and I’m looking to sell the domain on a first come first serve basis. 

Thanks for your time,

Chris

Now you can applaud me or rip my email to shreds, but this is the type of email that works the best for me so I’m sticking to it.  If the domain you are trying to sell is aged I find it is a good move to include that age in the email.  Now while I have not owned Anticareer.com since 1995 my wording can be taken that way (which I don’t mind) because it will put some people into the mindset that there is a once in a 17 year opportunity which is a benefit to you.  I also tell them that I’m contacting other parties and my email to them is not exclusive because I want to apply a little pressure to them.  Maybe they would have offered $1,000 and tried to low ball me and maybe they’ll come in with an offer more in tune with what I was looking because they are afraid to miss out on the opportunity to own this 17 year old domain.  After all, a domain name is not like a car, there are many of the same exact car so you can leave the dealership and come back another day if you want and still get that same model car even if someone bought the exact one you were looking at, but with a domain name each domain name is 100% unique and there’s no exact substitute for it.  If you get someone to understand that then it can only help you in the negotiation process.

The only other thing I can think off of the top of my weary brain that I didn’t cover is how to evaluate domain names and pick winners.  This is a steep learning curve and the best way to describe it is that you need to get a feel for it.  Sure, everyone can recognize those home run domains, but you are going to pay a pretty penny for them.  The true skill comes in picking up those singles and doubles.  And  avoiding the strikeouts, doubles play balls, or getting benched. That’s it, three part series done.  Hopefully you learned a thing or two on domain flipping.  If not then go fly a kite.  Good luck with the domaining.

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Comments

  1. I saw online that there are places that will appraise a domain. However, the appraisals seem to vary by about 5x. Do you put any value in these appraisals? Do you know of a site that tends to be more accurate?

    Thanks

     — Reply
    • You can get a free appraisal from Estibot.com or Valuate.com.

      Paid appraisals hold no meaning (in my book). Once you get experience buying and selling domain names your own appraisal will be more accurate than any service can provide. You can also go to a forum about domain names and ask other people (for free) what they think your domain is worth in case you can’t decide for yourself.

       — Reply
  2. Hi and thanks for the great posts on domain name flipping. I have done this in the past… I purchased a domain from godaddy (like for $14) then sold it to a guy for $850. Since then, I have been reading up on how to do this for extra money. I have a list of 5 to 6 letter long expired domains sent to me every day… and my question is, do you find that short dot com names could be sold for a few hundred? For example, I picked up swune.com the other day. What are your thoughts on this?

    Thanks for the posts!

     — Reply
    • @Jenna

      Short domain names are valuable because people are always looking for easy to pronounce short .com domains. They want to build a brand and need something that sounds either professional, hip, trendy, sleek, etc… (depending on what type of site they are going to build). The domains that are hot right now are CVCV.com domains that you can pronounce. CVCV means consonant/vowel/consonant/vowel. A domain like Towo.com or Loka.com can sell for $2,000-$5,000 at a domain auction and if you find an end user who wants it I’ve seen them sell for $50,000. Because all the good 4 letter .coms are already purchased many people are turning to 5 letter domains and the value in these has risen significantly. Focus on buying ones that are easy to pronounce, easy to spell, and you will be on the track to flipping domains successfully.

       — Reply
  3. Its difficult to earn money by flipping domains now because most of the good domain names have already been booked.

     — Reply
    • Aahna – this is why you need to buy domains that are expiring or keep a tab on new niches and trends and buy domains before these trends get a large following.

       — Reply
  4. Great post, I have a question though. If I contact the owner of a domain name and want to buy it off them directly, how do they transfer over ownership to me?

     — Reply
    • @Max

      Let’s say they own the domain name at GoDaddy.com. If you have a GoDaddy account they can ‘push’ the domain name into your account. This takes literally minutes and you’ll have ownership of the domain. Let’s say you don’t have and don’t want a GoDaddy account and you have all your domains at Enom.com. Then you need to initiate a transfer request through your Enom.com account. A transfer request and it’s process is different depending on which registrar you are dealing with, so you should check with them on the exact process. Transferring a domain name this way can take several days.

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  5. Thanks very much for sharing your expert knowledge and experience on flipping these domains. Your many ways of analyzing and handing each situation was fantastic. I have been flipping for many years and one bad habit of getting to many domains that nobody wanted and / or not using your many ways of handling each situation. So I was piling many almost worthless domains and wasting tons of time up and renewing – keeping organized a lot of “junk names” with the plan to push harder on selling them. Another bad habit was selling the good ones to low and to cheap to just get rid of them quickly. when it would have been better to patiently and find that “one good buyer”
    Also I copied your other articles to read and ideas and have been working on or planning to and and am sure will be great info.
    Thanks again for your Fantastic Domain Website info.

     — Reply
  6. had a question about the email you sent. Can you send the email before purchasing domain and let them know you are in the stages of purchasing it or do you have to buy it first?

     — Reply
    • If you send someone an email and let them know you are in the stages of purchasing it they may try to contact the current owner and buy it from them and cut you out. I would wait until you own the domain before you contact people and try to sell it to them. This way you don’t risk getting cut out of a deal.

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  7. Hello, thanks for the posts. i read all 3 and i finally have an understanding of how to get started.
    but i do have one question. Say i buy a domain for $100 from someone at namecheap. do i still have to pay the yearly fee to namecheap to keep that domain? even after i bought it for $100?

     — Reply
    • You need to pay an annual fee. For a .com domain that fee is anywhere from $10-30 depending what company it is registered with.

       — Reply
  8. This may seem like a stupid question, well no questions stupid, but say the search engine result from the key words in your domain produces established websites in that particular field (whatever the key words) but their domain is not remotely close to your key words, is my domain still worth something to them? if yes why is it?

     — Reply
    • Yes, because they may have a brandable domain while you may have a keyword domain. A company that specializes in SEO may be called RedFish.com but the domain name SEO.com would have tremendous value to them (as a very high level example).

       — Reply
  9. Once you have found a buyer do they make payment first and then you transfer the domain, like an honor system? Or do you use a type of escrow service?

    What form of payment do you accept and are you worried about chargebacks after you have already transferred the domain?

    If you had enough domains would you create a store? If you did, what do you think would be the best way to get the right type of traffic to this type of store?

    Thanks for your thoughts!

     — Reply
    • I always use an Escrow service like Escrow.com. This protects both parties. But if you are selling a domain for $100 it does not make sense to pay the escrow fee for a small transaction. I would use paypal, and I would have the buyer pay the seller first. If you’re going to take Paypal for a small transaction just make sure you have a good feeling about the buyer to try to avoid a chargeback or going through hassles.

      You would need probably thousands or tens of thousands of domains to really make sense of creating your own store. I have never done this so I have no experience here.

       — Reply