Domain flipping can be a profitable way to make money online, but like any other legitimate method, it takes work, learning, and experience to get good at it. This isn’t the type of practice that can be learned overnight.
Learning how to make money flipping domains takes time, but with some patience, hard work, and the right resources, any beginner can learn how to become successful at flipping domains for a consistent profit.
Let’s get to it!
What is Domain Flipping?
Domain flipping is the name given to the practice of buying domain names and then selling them at a much higher price. These can be expired domains that used to be home to a website, as those are very popular for site builders looking to skip the Google Sandbox, or they can be brandable names that have just flown under the radar.
Some domain flippers even have a knack for finding premium domain names that are already priced as premium but are still underpriced compared to what they could bring.
Whatever the specific route, the key is finding potentially undervalued domain names and holding them until the perfect buyer who wants the name, and is willing to pay for it, is found.
That’s the short explanation of how to make money flipping domains.
What Makes a Perfect Domain Name For Flipping
Two relatively similar domain names can have wildly different values on the open market. What creates demand for a domain name? Why are some names worth millions while others are worthless for all intents and purposes?
There are five major traits to look at when it comes to looking at the value of a domain name. Understanding each of these factors is crucial to building a successful skillset as a domain flipper.
1. Premium Extension
The TLD extension of the domain is a crucial factor in determining the likely demand and value of a domain name. There are 1,514 TLDs available as of June 2020 and those numbers just continue to grow, but only a very few of them are in demand.
The most popular extension is .com and it’s not even close. The great .com domain names are going to have the most value.
Other popular TLDs, especially for new businesses and VC-backed entrepreneurs, are .io, .co, and .ai.
While .net and .org still make up a large number of sites worldwide, they are TLDs that have dropped in popularity in the past decade and are on the decline.
Look for domain names with the best extensions. Even short brandable domain names that sound great won’t have many buyers if they end in the often-spam affiliated .info TLD.
Some premium domain extensions cost more like $50 a year or $99 a year for renewals. These aren’t as common and are generally more niche. Most of them are not going to be as popular as the major TLDs.
Is there any existing authority with a domain name? This most often comes from domain names that used to have a website but no longer do. If that site received backlinks, especially from strong respected websites, then those links could still pass strong authority to any new site.
This makes a domain name more valuable to many potential buyers.
3. Short Domain Length
Shorter domain names are better than longer ones. Extensive studies showed one-word and two-word domains were the most popular with VC-backed startups by far, often combining for well over 90% of bought domains by startup companies.
Even among these, names with shorter character counts were also in higher demand than longer names.
While there are exceptions, generally a shorter domain length is a good sign.
How easy is a domain name to brand? Considering many of the buyers with the biggest budgets will be new companies, brand and marketing matter.
Even among many niche website creators, branding is increasingly important in developing rounded out sites that pass Google’s eye test and give a better user experience. A good brand is a part of that equation.
A short, authoritative domain is great but if it’s unbrandable, that’s going to be a major problem in getting a good price for the flip.
Some niches are growing, some are fading, and some are fads that have already come and gone. Google Trends gives a ton of information for free. While one or two-year trends can be telling, sometimes looking at 5-year data or “All Data Since 2004” can tell a very different story.
Take a look at this Google Trends of the outdoor topic “paintball.” One or two year numbers look normal but when you look at the long-term trends:
That is a dying (dead) topic. Not worth its own site, not the type of trend you want to buy a ton of domain names in.
Combining trend information with the other previously mentioned factors can help you zone in on great potential domain names while making sure to avoid the potential money pits.
5 Reasons Why You Should Get Into Domain Flipping
While learning the ins and outs of the domain world can be intimidating at first because of all the things an investor needs to learn. This shouldn’t be an obstacle.
There are five great reasons why getting into domain flipping is worth the time, study, and investment for beginners to learn the ropes.
1. Easy To Get Started
There are no gatekeepers to domain flipping. You don’t need a fancy degree or to spend years on unpaid internships to get your foot in the door of some large firm. You can educate yourself, learn to use the publicly available domaining tools, and start searching for those hidden gems.
Getting started in domain flipping is as easy as deciding to get into the practice and just starting the work and self-education.
While you will want a large budget eventually, you can start with a few domains at regular price and go from there.
2. Low Barrier to Entry
Anyone who can buy domain names can get into domain flipping. Granted, it’s easier with a budget that will grow over time but a basic .com sells for ss than $20.
Start with a niche you know, pick up some domain names with any registrar, and you’ve started your career as a domain flipper.
3. Unlimited Income Potential
Even though those giant million-dollar sales are rare, they still occasionally happen. Even more important for domain flippers is that between public sales, private sales, and auctions there are thousands of examples of:
- $20 domains selling for hundreds of dollars
- $100 domains selling for thousands of dollars
- Expired domains being picked up, held, and later sold for five figures or more
As you make more sales as a domain flipper and continue to get better at identifying great purchases, and getting the right buyer in line to maximize the value of each and every sale.
You can check out this report for a brief run-down of major domain name sales that were public from the past year.
4. Fairly Low Risk
Good expired domains will have a market. Even if you don’t get what you’re hoping for if you did the right research you’re likely to find a buyer for a profit, or most of the cost at the very least.
A mere $100 can buy multiple new domains. That’s a very low investment, especially considering the payout. Building microsites instead of landing pages for expired domains can even create some passive income as you work on finding the perfect buyer.
This all makes domain flipping very low risk by comparison.
5. Low Competition
The competition in domain flipping is low, especially compared to many of the alternative ways for making money online.
Domain flipping is talked about far less than building niche websites, flipping online businesses, or creating passive income. Many people just assume the golden years of domain flipping were in the late 1990s and now it’s just too late to make money reliably flipping domains.
Nothing could be further from the truth, and this low competition is a major benefit of going the domain flipping route.
How Much Does a Domain Name Cost?
The cost of a basic domain name is actually quite reasonable. These are for .com TLDs since they are the most popular by far.
A .com from popular registrars are priced as follows (as of October 2022)
- GoDaddy: $19.99 a year
- NameCheap: $13.98 a year
- HostGator: $18.99 a year
- Domain.com: $9.99 a year
Keep in mind those are average per year prices, you might save a little bit on year one based on whatever specials or discounts are running.
There is no way to estimate the price of a domain at auction or marked as premium. These depend on a variety of factors and create a massive potential range as a result.
Auction domains can go for as little as a basic $15 starting bid or may end up in the five or six figures depending on its history and the attention on it.
How To Estimate The Value Of A Domain
There are domain valuation tools out there, but many of them are grossly inaccurate or designed by registrars to make domains you’re looking at always look like a good deal.
Things to look at when contemplating the value of a domain
- Keywords in the domain – and how easy/hard they are to spell
- Length of the domain name
- Domain history, including backlinks and length of history
- Any niche the domain name would associate it with (if any)
- Major sales of names in similar niches or similar types of domain names in the past year or two
- Current market trends
In many ways estimating value is a guessing game. In the best circumstances, it’s an educated guessing game. Getting a perfect estimate may not be possible, but taking that bullet list of things to research can give you a better sense of what the current market for a certain domain is.
Where To Buy Domains to Flip
There are multiple options for buying domains, and most flippers will look at multiple sources to find the most opportunities.
Domain Name Registrars
This is where new domain names are bought from, and even many premium domain names are going to be listed for sale at registrars like GoDaddy, NameCheap, and others.
Unowned domain names can be picked up from registrars, so it’s all about matching good domain names that have flown under the radar or are in an up-and-coming niche.
Another important tool that comes with registrars is the backorder tool. This allows you to spend money to put in the right to buy a domain name if it expires and isn’t renewed.
Auctions like GoDaddy auctions, Sedo, and other spaces put up hundreds of thousands of domain names for auction every single year. Some domain names will be in high demand and create a bidding frenzy while other potentially great names might fly completely under the radar.
Auctions are a fantastic place to pick up deals, especially with tools like Spamzilla to look over expiring names and to test the multiple domains on auction to look at their histories.
Getting familiar with auction sites is good since that will also be a potential marketplace for selling domain names you acquire.
While domains listed alone aren’t as common as built-out sites, there are some premium marketplaces like Flippa, Empire Flippers, or even domain-specific ones like DynaDot.
Look through listings and see what gems might be among the many, many trash listings of domains.
Search For Quality Domain Using Tools
A small number of tools are used by virtually every serious domain investor. Here are the three that will come up when talking to any full-time domain flipper.
Spamzilla is considered by many to be the premium tool for finding quality expired domains with a good backlink profile and history. Expired domains are extremely popular with website builders and agencies because of their SEO benefits.
While there is a free version you can use to get used to it, the $37 a month subscription is the version serious domain flippers use to comb through the massive numbers of expired domains and find good potential deals.
2. Domain Hunter Gatherer
Domain Hunter Gatherer is an extremely versatile tool with a free version, as well as premium and professional levels depending on your needs as a domain investor. This tool searches through recently expired domains, through auctions, and helps filter through up-to-date options through a versatile array of options.
The DomCop tool sticks out because it not only uses the tools and resources that many of the other popular tools use, but it also measures metrics like Moz Trust Flow, Majestic Domain Authority, and others to paint a more complete picture of any domain name you’re considering.
Auctions and Closeouts
Auctions and closeouts are great options for picking up domains. Auctions can be tricky as some domain names fly under the radar, but many of the better options out there have at least some interest.
This makes the skill of estimating a domain’s value to see which domains are undervalued, and which ones are being overvalued, crucial to finding the best deals.
Closeout auctions are simply auctions of recently expired domains that go to auction for a short amount of time where they can be bought quickly for the regular price of a new domain. If they’re not snatched up during this time or renewed, they go to the general auction pool.
Approaching Existing Owners
Good domain flipping requires a lot of patience, and the ability to reach out and find the right buyers. That second step flummoxes many domain flippers. If an owner has held a domain for years and hasn’t managed to sell it, you might be able to get a good deal on it.
Succeed in finding the right buyer and you could make the big-time sale that the previous domain owner never could.
8 Steps on How to Flip a Domain Name
Experienced domain flippers who know how to make money flipping domains will have a process. This 7-step process is going to be important to learn and understand to be a profitable domain flipper.
For a more detailed guide, check out the 8-step framework on how to sell domain names.
1. Find a Quality Domain Name
This sounds simple, but it takes a lot of time and patience. Search out for quality domains you think could be flipped for a major profit and make a list. It takes time to sell domains so you want to be able to build up a supply.
2. Determine What Is Domain Worth
Never go into a deal blind. You need to have an idea of what a domain can be worth. Use domain estimate tools, check the backlink and site history behind the name, and do your research on trends and similar recent sales.
Get a range of what you want to sell the domain for.
You should figure out:
- Your ideal price for selling the domain
- A price you’d be happy with for the domain
- The lowest price you would accept for the domain
3. Negotiate The Price
When you know how much the domain is worth in your estimation, you can figure out what your budget is for a deal. Reach out to a domain owner and negotiate the price.
If the domain is in an auction, keep to your budget as you bid for it. If someone overbids your budget, walk away and look for the next deal.
Even if you see a premium-priced domain listed for sale, contact to see if you can get a deal on it. These prices, even outside of auction settings, can often be negotiated. Call the sales department of the registrar to see if a deal can be worked out.
4. Buy a Domain – Use Escrow
Using escrow is important to make sure everyone is protected during a transaction. If you’re buying a domain from a registrar that isn’t owned then you can just make the purchase. Same with an auction sale from a registrar-backed marketplace.
Any time a deal is being done with an owner, then it’s crucial to use an escrow service.
5. Consider Turning Your Domain Into a Profitable Website
Niche websites can be a great source of income. Depending on the domain, creating a website and flipping it could be more valuable over the long term than just selling the domain.
This can be an especially useful strategy for expired domains with a very strong backlink profile and history since those sites can rank for competitive terms very quickly, creating a money-producing site much faster than anything started from scratch.
6. List Your Domain At An Auction
Getting attention at an auction site gets your domain name in front of motivated buyers. These formats also allow you to set minimums and some allow detailed listings, giving you the opportunity to use those copywriting skills to pitch the merits of the domain you’re attempting to sell.
7. Give it Time – Buy And Hold Method
A major part of domain flipping is waiting for the right buyer. This can take months, or in some cases even years. Buying and holding is important to get the best deal.
This can be amazingly effective if you see an emerging trend a year or two before it fully bursts onto the scene. Holding until that breakout point will make all acquired domain names about that niche even more valuable.
8. Find The Right Buyers For The Domain
At the end of the day, a domain is only worth what someone is willing to pay for it. Finding the right motivated buyers is a crucial part of getting the most revenue out of each sale.
Frequently Asked Questions
Domain flipping can be complicated, especially since it is as much art as science. Here are three of the most commonly asked questions on domain flipping.
Is Buying and Selling Domain Names Legal?
Buying and selling domain names is 100% legal. Because of ICANN regulations when ownership of a domain transfers from one person or entity to another, it must stay put for 60 days. After that, the domain can be re-sold.
This shouldn’t be an issue for domain flippers as flipping is not a fast process. Doing this well involves a lot of time and holding, which means even this one regulation isn’t going to pop up as a problem.
How Much Money Can You Make Domain Flipping?
The most expensive domain sale ever was for $872 Million. To say this is an outlier is an understatement. The chances of a single 7-figure or more sale are virtually non-existent.
However, there are many people who make a full or part-time living flipping domains. There are hundreds if not thousands of daily transactions where domains bought at $20 sell for several hundred, or for a couple hundred sell for thousands.
That’s even before looking at premium domain sales.
While it’s important to be realistic, you’re not likely to make multi-millions per year, it is possible to become skilled enough to earn a full time income from domain flipping.
What Taxes You Have To Pay?
You will want to talk to an account for actual tax advice. If the entire business is buying and selling websites, then standard self-employment taxes are going to apply to the net profits.
For information on LLC, S Corp, or other fees that may apply, talk to an accountant as the setup of your domain flipping business makes a major difference here.
Takeaway – Is Domain Flipping For You?
Domain flipping is a great way to make money, whether some side hustle income or working towards a full-time income. Learning the necessary skills takes time.
The major takeaways to see if domain flipping is for you:
- Premium TLDs are crucial
- Flippers need multiple tools to comb over multiple domain sources
- Number of words and character length matters
- Past domain history and backlinks can be very important
- Use trend data to stay ahead of the curve
While it can take some time to learn how to make money flipping domains, the upside is outstanding. Follow the tips, advice, and tools in this article and you’ll be miles ahead of other beginners in learning the ropes.