How to Make Money by Flipping Domain Names – Part 3 (Final Chapter)
Responses : 17 Comments
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,
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.
Incoming search terms: