How to Flip Domain Names

Domain flipping, like house flipping, is purchasing an undervalued property — in this case, a website — and re-selling for more to make money in either a short-term or long-term strategy. Why consider domain flipping? Domains can be highly valuable online real estate. The most expensive domain name ever sold, Cars.com, sold for $872 million, while Business.com sold for $320 million in 2007. 

Unlike homes, you rarely need to make improvements or renovations to flip domain names. Instead, you can easily flip domain names from your computer or phone as a full-time career or side hustle. Like any other investment, this activity requires market research and an in-depth understanding of domain valuation. Read on to understand how to flip domain names with simple steps and factors to consider. 

Steps to Flip Domain Names

When you flip domain names, you can use a long-term buy-and-hold strategy to maximize returns or short-term flipping to increase cash flow. You can buy and hold domain names for a few weeks, months or years. Here are the main steps to consider to start domain name flipping.

Research and Education

Learn about domain names, their value and what makes a domain valuable. Understand domain extensions (TLDs), keywords, brand-ability and market trends. Generally, short domains are more desirable as they provide a better user experience. Look for domains with 15 characters or less. 

TDLs are the extension after the domain name, such as .com, .co.uk, or .org. These can have a big impact on domain value. Interestingly, city TLDs, like .paris, .nyc, and .tokyo are growing in value for brands working to establish location-specific branding. Government domains that end in .gov generally aren't available. 

You may also want to research search-friendly and niche-relevant domain names, as these can have greater overall value. 

Set a Budget

Determine how much you're willing to invest in acquiring domain names. Start with a manageable budget to minimize risks. Remember to diversify across domain names and other investments to mitigate the risk of substantial loss if you cannot re-sell the domain name. 

Domain Acquisition

Purchase domain names from domain registrars, auctions, marketplaces or private sellers. Look for domains that are short, memorable and keyword-rich and have potential resale value. A domain name's current value and potential may increase over time.

Market Valuation

Estimate the value of the domain by researching recent sales of similar domains. Online platforms like NameBio and DNJournal can provide historical sales data. You can also seek expert advice to understand the name valuation process and discuss domain-flipping strategies. 

Appraisal Tools

To estimate the domain's value, use domain appraisal tools, such as EstiBot, Domainindex, Domain Price Check or GoDaddy's Domain Appraisal. Note that these estimates are not always accurate but can provide a starting point. 

Domain Listing

List your domain names for sale on domain marketplaces, auction platforms and your own website. Include detailed descriptions, relevant keywords and high-quality images.

Options include Sedo, a free domain parking service, where you can feature your domains with an advertisement link on the domain’s landing page. A parked domain can showcase visitor statistics that may boost its sale value.

Flippa is widely used for website flipping. Flippa hosts domain name auctions with 5% to 10% commissions. Note that most auction sites charge 5% to 15% commission. When pricing your domain, adding this commission fee can protect profits if you sell the domain via auction. 

Marketing and Promotion

Use social media, forums and online communities to promote your domains. Networking with other domain flippers and investors can help you reach potential buyers. NamePros and DNForum are two platforms where you can engage with professional domainers to gain market insights. 

Negotiation and Pricing

Be prepared to negotiate with potential buyers. Set a reasonable asking price based on your research and be open to offers. When negotiating, provide historical price data or comparable site information to strengthen your negotiation position.

Escrow Services

Use reputable escrow services to ensure secure and smooth transactions. Escrow services hold funds until both parties fulfill their obligations.

Transfer Process

After the sale, facilitate the domain transfer process. Provide clear instructions to the buyer on transferring the domain to their registrar and be available to answer questions to offer a good customer experience. Remember that each transaction builds your reputation in the world of domain name flipping. 

Legal Considerations

Ensure that the domain name is legally yours to sell and that it doesn't infringe on trademarks or copyrights. Research the legal aspects of domain flipping in your jurisdiction. Contact a local lawyer to understand copyright restrictions, domain name flipping restrictions or local laws if needed.

Tracking and Record Keeping

Maintain detailed records of your domain acquisitions, sales, expenses and communications with buyers. This information is essential for tracking your business's performance and for tax purposes. You can use a basic spreadsheet or other business tracking software. 

Continuous Learning

The domain market is dynamic, and trends can change. Keyword relevance, emerging TLDs and other factors can change the domain-flipping landscape. To make informed decisions, stay updated on industry news, market developments and emerging niches. 

Flipping Domain Names

Remember that any domain name flipping comes with risk. Research markets and diversify investments to protect against losses. With adequate understanding and a small initial investment, flipping domain names offers the opportunity to build an additional income stream.

To build your diversified investment portfolio, consider also managing rental properties, REITs vs. rentals, buying your first rental property or real estate crowdfunding. 

Frequently Asked Questions