In the early days of the internet, there was a time when it was easy to make money from domain names. Then the idea got so hot that almost everyone tried it. That, of course, made it harder for those who were new to get into the game. But things have shifted again. If you want to give it a try, there is money to be made by investing in domain names.
A look back at making money with domain names
If you dig deep into this website, you will find a 2006 post entitled Alternative Investments – Domain Names. Think back to the technology from 2006. You may have had a PC at home. However, the iPhone had yet to be invented. And you’ve probably chatted with AIM. It was different then.
In fact, the internet was exploding in new and interesting ways. Blogging should become big business. And savvy people realized that they had the potential to make big bucks from domain names. If you bought a domain name that people were vying for a year or two later, you could make tens of thousands of dollars from just that one domain sale. And the risk was low because domain prices were low.
Valuable domain names quickly became more expensive
In fact, some lucky smart people get really rich. For example, Page bought Howe Seniors.com and Guy.com and quickly sold them in 2007 for over a million dollars each. At this point, of course, people realized that getting the right domain name was a really important step in the business. So the cost of these popular or potentially popular domain names increased.
It made the domain name business riskier. On the one hand, you could make a lot of money flipping domain names. On the other hand, it could cost a lot more to buy. Hence, you could lose more. Whether or not to get into this business became a much tougher question for the average investor, especially those who could not rely on their knowledge of the information technology sector.
Can You Make Money From Domain Names Today?
It has been fifteen years since this article on domain names as alternative investments. In the Internet age, these are several lifetimes of change. Is It Possible To Make Money With Domain Names Today? Yes. Especially if you are looking for a way to earn some extra income, buying and selling domain names can be a great option. There are three basic ways in which you can make money from domain names:
1. Holding (parking) domains
If you don’t want to spend a lot of time on this side business, buying domains to keep them is a great way to go. Basically it works like this:
- You buy a number of domain names.
- Then set up advertising on those websites.
- And when people land on the websites and click the ads, you make money.
There are several ways to do this. The usual way, however, is to work with a domain trading platform that offers advertising on parked domains. Examples are Sedo, GoDaddy and DittoDomains.
2. Flip domain names
This is the option most people think of when thinking about how to make money from domains. You are buying domains that are already out there and registered. Then sell them and make a profit.
Of course, there are a number of other things you can do in between: hold onto the domain for a while, make it nicer to make it more profitable before selling, and so on. Think of this like flipping houses except that the “house” is that is website.
Most of the people who choose to make this choice take advantage of domain marketplaces. Existing domain owners list their domains for sale. You can buy the ones you want and you can buy ten or hundreds at a time. Then you will likely be using the same types of marketplaces to sell those domains. (By the way, you will probably buy domains for parking in these marketplaces as well.)
Alternatively, you can work with a domain broker who will make domain purchases for you. Or you can find a domain name you like and contact the website owner directly to try to negotiate a sale.
3. Expand domains
If you are interested in a longer term project and enjoy building websites, you can create domains. In other words, you are creating a blog or a website. There are numerous ways to make money from websites – through advertising, sponsored posts, creating and selling your own products, promoting your business services, etc.
Buying domain names for creating websites
You can either:
- Register a domain name that does not yet exist. In this case, you are rebuilding it from scratch.
- Buy an existing domain name and expand the site to make it better.
Lots of people choose the latter and even turn it into a full-time business. Essentially the concept is to buy domain names that you think you could make money from. Then expand the site. Maybe you do it yourself. More likely, you hire designers, bloggers, SEO experts, etc. to work with you and make the website great. At this point, you either sell the website (a domain name flip version) or you stick with it and keep making money from it.
You can invest in a variety of domain names in the same niche – buying multiple domains related to bread-making, fishing, or art history, for example. This is a great way to get into a specific area of interest while trying to dominate a market. And it gives you the opportunity to promote your domains to each other, explore different techniques in the niche, etc.
Alternatively, you can explore different interests by buying different domain names. That way, you can see where your skills are working best. In any case, you have the opportunity to earn additional income. The risk, of course, is that you will spend money on the domain names as well as the people you hire to help them and then make no profit.
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