What Is Domain Flipping? – KnownHost
A domain is a unique string of characters used to direct web users to a particular site – just how ‘www.knownhost.com’ would bring you here.
However, for a domain to be live and useable, it must be registered.
So, unsurprisingly, the most basic and memorable domain names are often the most popular and command the biggest fees from registrars and existing domain owners. And there is plenty of money to be made in domain real estate through ‘flipping’.
In this guide, KnownHost explains what domain flipping is and outlines a step-by-step guide on how to flip domains, as well as looking at the advantages and disadvantages of domain flipping.
What Is Domain Flipping?
Domain flipping works in a similar way to property flipping, referring to the practice of buying domain names for a low price and, without altering them, selling them to third parties for more than was originally paid, with the aim of generating a profit.
It is often a form of low-maintenance second income, supplementing a main income stream. Anyone can do it with enough up-front capital and an understanding of domain value.
With domain flipping, the key to making a profit is buying the right, sought-after domain at the right time, and then selling that domain when it is most valuable.
What Makes A Valuable Domain?
The most valuable domain names are short, easy to spell or phonetically spelled, memorable, and have a common domain extension, such as ‘.com’ or ‘.co.uk’.
This means it is important to avoid anything that counters these domain elements if you’re looking to get the most return on domain-flipping investments.
Attributes that can devalue a domain name include:
- Being too long.
- Use of hyphens.
- Use of numbers.
- Use of homophones (two words that have the same pronunciation but different meanings, such as ‘see’ and ‘sea’).
- Unfamiliar domain extensions.
These traits make domain names difficult to remember, so will not provide much value.
However, three domain types can potentially increase domain value are:
- Exact Match Domains: Also known as an EMD, exact match domains are those that include the exact keyword string that a website is trying to rank for, such as ‘soccer.com’ or ‘vegetables.com’.
- Brandable Domains: Brandable domains are those that can be used to identify a specific brand within the domain string.
- SEO Domains: These domains are optimized to make them more accessible to search engines.
How To Flip Domains
Flipping a domain is a relatively simple process, but to do so successfully and reap the rewards in profit, prospective sellers must follow these steps:
- Step 1 – Search for a Domain: The first part of the process involves finding a domain that is both low-cost and has the potential to increase in value. The best way to do this is to use a domain name search tool. Expiring domain auctions are also useful tools for finding potentially profitable domain names for a low price.
- Step 2 – Evaluate the Domain: When choosing a domain name that could potentially make a profit, there are several factors to consider. These factors include character length, brandability, relevance, and search-friendliness.
- Step 3 – Register the Domain: If a domain name appears profitable, it is encouraged to register it as soon as possible to avoid missing out. For help with the domain registration process, check out our helpful guide!
- Step 4 – Find a Buyer: This is the most difficult step in the domain-flipping process. The main goal within this step is to find someone willing to pay more for the domain than the buyer did originally. There are a few actions that can be taken to help improve the visibility of a domain and encourage prospective buyers to make offers. The first is to make the domain registry public. A seller can also create a landing page for that domain, advertising its sale on the domain itself. For a more direct approach, many domains are sold at domain auctions.
- Step 5 – Sell the Domain Name: This is as simple as it sounds. With a buyer secured, they will then need to re-register the domain name under their ownership after paying the seller.
KnownHost offers quick, convenient, and affordable domain registration and transfer services – helping you find and buy your dream domain today!
What Is Drop Catching?
Drop catching – also known as ‘domain sniping’ – is a domain flipping strategy that involves buying dropped domains (domains that have expired). It sees buyers waiting for the domain expiry time and buying the desired domain just as it becomes available.
Domain holders have a period of 30 to 90 days to renew their domains, and this is when buyers will need to keep an eye on that domain. If a domain’s renewal period lapses without the owner renewing, a buyer can swoop in and buy that domain.
This is where the most money is made from domain flipping, as it is the most common way that valuable domain names become available.
Where Is The Best Place To Flip Domains?
The best place for domain flipping is through any reputable domain registration provider offering the name you are interested in. This may either be through a traditional domain name buying process or through a platform that offers domain auctions.
This is also where prospective domain flippers will make their profit, transferring or selling these domains for a higher price.
Check the availability of a domain and enjoy effortless domain registration with KnownHost now!
How To Set A Domain Flipping Budget
It is hard to accurately predict exactly how much a user will need to spend on their first few domains, and how much profit they will make. Most successful traders start small and reinvest profits to afford more valuable domains.
As users get more experience in domain flipping, predicting budgets and costs will become easier, and they will be more equipped to judge what is an acceptable price for a given domain and whether it is likely to generate a profit.
However, as a starting amount, it is generally recommended to only invest a sum that you can afford and will not risk your financial well-being if the domains fail to generate a profit. Many potentially valuable domains often become available for up to $130.
When Is The Best Time To Domain Flip For Maximum Profit?
The best time to flip a domain is when it is undervalued and it is predicted that a global or national trend may cause the popularity of the words that make up that domain to rise within the next few months.
If it is possible to buy that domain for a low price before the initial trend hits, then it can often be sold at the peak of its interest to make a substantial profit.
If the goal is immediate cash, then the best option for a quick flip would be to sell the domain shortly after registering it. However, many domain registering services place limits on how quickly a domain can be transferred after purchase.
Domain Flipping Risks
Like any investment or money-making endeavor, domain flipping comes with a host of potential risks. Here, KnownHost looks at these risks and the best way to mitigate them:
- Losing Money: Poor research or planning can result in the loss of money from purchasing an unprofitable domain name. Unfortunately, within the first year, this is a real risk to untrained domain flippers. The best way to lessen the risk of damaging losses is through proper planning, research, and not investing anything you cannot afford to lose.
- Time-Sink: Domain flipping can be a large sink of free time at first, as it requires additional market research, planning, and trend analysis to be able to determine the appropriate domain to buy and sell. To mitigate this risk, ensure that this is not all done in one night, and instead use calendar time-blocking to set aside 30 minutes each day to dedicate toward this task.
- Long-Term Planning: Long-term planning and patience are often required to successfully flip domains. It may take years to sell some domains for an appropriate profit, so being able to think in years instead of weeks is essential.
Frequently Asked Questions (FAQs)
Q: Is Domain Flipping Still Profitable?
A: Domain flipping can be very profitable, but it takes time to build up experience and generate enough initial profit from flipping domains to build a lucrative domain portfolio. An experienced domain flipper, however, can create a ‘snowballing’ effect with their profit.
Q: Is Flipping Domains Legit?
A: Domain flipping is a legitimate way to make money on the side, however, it can be a slow process. A domain flipper must understand the market while boosting their ability to effectively time and plan when to purchase domains, so it can have a low initial return on investment.
Q: How Much Do Domain Flippers Make?
A: The average beginner domain flipper can potentially earn anywhere from £100 – £10,000 within the first year depending on how much money and time their initially invest. However, undervalued domains that later blow up can sell for millions.
Q: What Are Examples of Domain Flipping?
A: Domain flipping can be majorly profitable. For example, the domain ‘Insure.com’ sold for around $16 million, while ‘360.com’ sold for $17 million. This is because they’re short, memorable, and heavily sought-after domains containing popular keywords.