Should you try domain flipping in 2021?
Do you want to make an extra $1,000 a month with domain flipping? Many people do, and they do it in many ways. Stocks, forex, selling real estate or insurance part-time, you’ve probably heard about all of them. I know I sound like I’m turning into a financial planner right now, but hear me out. How often do you think about your retirement plan? Do you “plan” for the government to support you with a pension plan? Are you willing to bet on it? I know I’m not.
Making some extra money today is important, but what happens when you are seventy or eighty? Or if you are “lucky” enough to live to ninety or a hundred? Wouldn’t it be great if you had some assets that were growing in value? Me personally, I want my assets to be like wine, or a great scotch whiskey. I am not a drinker, but I like the mantra: getting better as they age. Every day, in every way.
Domain investing as a part-time job
So let’s cut to the chase. You need something that’s growing in numbers, but at the same time is increasing in value due to scarcity. I know it sounds a bit contradictory; that’s why it’s hard to find those things. Take the new iPhone. More and more people have them, but you always have to wait, preorder and hope that you will be able to buy one. That’s one example of scarcity and many would argue it’s artificial. But an example of scarcity that’s not artificial is domain names. Every day tens of thousands of domain names are registered, but good ones are getting harder and harder to find. The good ones rise in value. Some are becoming premium collectible items in China. If the domain name has the number eight, it’s nice. If it has two eights, it’s better. If it has three eights, it’s fantastic. Eight has long been regarded as the luckiest number in Chinese culture. Pronounced ‘Ba’ in Chinese, it sounds similar to the word ‘Fa’, which means to make a fortune. Eight contains meanings of prosperity, success and high social status too, so all business men favor it very much.
The great thing about the domain name market is that you don’t have to stay in the speculative part of it. Businesses are always looking for that edge, even with domain names. Does the domain name contain a keyword that’s searched on Google thousands of times? Does the domain name have a recognizable .com extension? Is the domain name indexed by Google, with hundreds of links still pointing to it? Does the domain name have an extension with a keyword that will drive value to your business?
How to sell a domain name to a business
night.club, lean.fitness, marketingagency.london, short domains, keyword domains, expired domains, geolocation domains…
It doesn’t matter how much you paid for it. It could be $9 or $9,000 – if you can identify the value, and/or depending on the domain name if you are simply willing to wait for it to reach “fruition,” it could be a great investment. Take four-letter .com domain names as another example. Our ground-breaking research back in 2013 was huge! It was mentioned by Slate and it was trending on Reddit. The result? More than 30,000 people visited our website, and countless blogs wrote about our research in the following years. I am not mentioning this to brag; I simply brought this up because back then it was easy to buy a four-letter .com domain for less than $100, sometimes even $50. Not anymore! Now you have to look really hard if you want to buy them below $300. I am certainly looking! That’s almost a guaranteed return of 300 to 600 percent in three years. Who doesn’t want that?
Why not buy a few domain names, and leave them for your children or grandchildren?
If you are thinking right now, “I wish I could go back to 2013,” set your thinking straight! When it comes to domain name investing, in 2013 there were people saying, “I wish I could go back to 2008.” And in 2008, there were people saying, “I wish I could go back to 2001.” And so on… I can guarantee you, in 2020, there will be people saying, “I wish I could go back to 2016.” How much do you think a great domain name will be worth 50 years from now?
Take three-letter .com domains as another example.
- zqm.com sold for $720 in 2004
- dzd.com sold for $1,395 in 2004
- yvq.com sold for $860 in 2005
Let’s fast-forward 11 years later.
- wbg.com sold for $44,000 in 2016
- lxb.com sold for $41,500 in 2016
- ndw.com sold for $47,000 in 2016
- ffg.com sold for $60,000 in 2016
You can see for yourself at https://namebio.com.
And I left out outliers like aus.com ($345,000) and ued.com ($150,000). There are hundreds of these sales, and remember there are only 17,576 combinations for three-letter .com domains. Some of you might be thinking, “OK, I need 60 grand to get into this game, and wait another 11 years.” Sure, you could do that, but most of you aren’t prepared to risk that kind of money.
Jeffrey Emerick entered the industry about a year ago and earned enough profit for a down payment on his lakefront home
This is not the first time I write about making money by selling domain names, and this is a different route you can take from the one Rick Schwarz mentioned in his interview! You could take Jeffrey Emerick’s route. Here’s a guy who, a year ago (2015) bought two four-letter .com domains, and sold them. He reinvested the money to buy four four-letter .com domains, and sold them. He then bought eight four-letter .com domains, and by now I am hoping you are beginning to see the pattern here.
Jeffrey Emerick entered the industry about a year ago and earned enough profit in that time for a down payment on his lakefront home (where he spoke during this interview). And he still owns 189 LLLL .com domain names. Jeffrey didn’t say, “I wish I had more money,” or “I wish I could go back in time.” Jeffrey took control, buckled down, took action, and he owned it!
It doesn’t matter if you start with a $3 flip, or a $3,000 flip. Get your feet wet; there’s more than enough to go around. Just learn about the process so that you don’t waste your money!
For example, take Kirk, Mitch and Mario.
- Kirk bought SarasotaPediatrician.com, for $10, and sold at $360 by reaching out to potential buyer
- Mario bought PennyStocks.ch for €13.99, and sold for €2,500 after getting an inbound inquiry
- Mitch bought StupidMovies.com for $12, and sold for $15, at an NamePros auction
This happened in 2016. This is not something that occurred in 1998 when domain names were supposedly hot. I have no idea why this doesn’t make sense to anyone outside of the domain investing community. You can watch the entire interview about their first domain name sale inside DNAcademy. More on DNAcademy later.
Yes, those were their first domain name sales. You may think that Mario got lucky, or that Mitch and Kirk could get more money for their domains, but what’s most important is that they got their feet wet! They proved to themselves that this is actually possible!
If you are thinking, “Hey Goran, you are pretty hard on my case, how are you doing with this part-time domain flipping business?” I’ll be completely honest with you. Back in 2012 before I lead the research for checking domain availability for all 456,976 combinations I bought three four-letter .com domains. Just a couple of years later I needed cash fast, and I was able to sell all of them pretty fast and liquidate those assets. I didn’t profit much from those transactions because I was in a hurry and I wasn’t committed to venturing deeper into the domain investing. Recently the bug bit me again. And after developing some interesting WhoAPI tools (now webmaster.ninja tools) like our domain manager, domain monitoring, and with our domain checker I was able to find some interesting domain names. This doesn’t reduce the anger in me for not taking advantage of my knowledge with the four-letter .com domains earlier, but I had to be focused 100 percent on WhoAPI. Heck, my company was falling apart at that time! That was also one of the reasons why I sold those three four-letter .com domains. I am happy to say WhoAPI survived 2013 and 2014, started growing in 2015, and 2016 is looking like our best year ever with two months to go.
The domain flipping bug bit me
So anyway, getting back to my domain-investing bug. I don’t have money to throw around, and I am certain you don’t want to either. So I was thinking instead of buying the wrong domains, and selling them in the wrong places, it would be awesome if someone would just explain everything and show me the ropes! And then one day, I was watching NamesCon founder Richard Lau being interviewed by Michael Cyger on Domain Sherpa. You might have seen me mention Richard and NamesCon recently when World Hosting Days bought NamesCon and Richard mentioned this program called DNAcademy and spoke highly of it. I quickly did the math. If I bought 50 domains at $10, and renewed them 5 years before selling them, that’s $2,500. But, what if I bought the wrong domains, or what if I don’t know how to sell them or price them correctly?
What if you buy the wrong domains?
So I concluded it would be better to pay someone for the right knowledge and start off on the right foot. Don’t get me wrong, I’ve sold a couple domains for a couple thousand dollars each, so I am not clueless. I am just interested in making a wise investment and improving my domain flipping skills. To make it clear and to summarize the level of my domain investing, I’ve had some success and some failures in the past years. Several domain investors have been using the tools my company developed. I finished DNAcademy and am a bit angry at myself for not doing something like Jeffrey when I was clearly in the position to do so. What I am trying to say with this blog post is that now, after finishing DNAcademy, I can – because I have the knowledge I lacked earlier, which probably prevented me from profiting as much as I could have on those four-letter domains that I owned.
DNAcademy will teach you tricks even if you have some experience with domain investing. I was so happy with the program that I am recommending it here, and I also went through the trouble of getting you a coupon code (worth $50). Just type in WHOAPI during your order process.
Also, I want to go that extra mile for you because I am really passionate about domain names and I think you can also have success with them. So, if you have any questions before, during, or after the DNAcademy, I will make myself personally available. Just sign up and contact me with the subject “DNAcademy member,” and I will also send you my 20-page guide on domain names.
“Isn’t it better to invest in education instead of spending thousands of dollars on renewals or buying worthless domains? I certainly thought so, and I am glad I did! DNAcademy is not only the perfect place to get proper education, but reaches into the very DNA of a domain name investor. Michael’s 6×6 Matrix might spare you hours of pointless cold-calling, and another tactic might teach you how to find and compare other domain sales so that you don’t undervalue a great domain that you have. My only wish is that I found out about this sooner.”
Join the growing domain investing community today with the right first step, by being able to buy and sell the right domain names. With extra guidance, coupon code and DNAcademy you are three steps closer to that $1,000 I mentioned at the beginning of this post.
Is it too late for domain investing?
Back in 2012 there were 240,000,000 domain names across some 260 TLD’s (Source domain name brief Oct 2012). You all know the most popular one; .com. Almost half of all domains (over 100M) are .coms. They are all active as you read this, which means someone paid for them around $10. That’s a billion dollars right there, just for .coms. Not to mention, .co is sold for $29,99, and .me for $19,99 (when they are not discounted or premium). Rarely can you register a domain name for less than $10, so let’s say the other $140 M domains account for at least another billion dollars.
The thing with domain names is they expire every year, which means you have to renew them. Despite all this expiring, the total number of domains keeps growing ever since symbolics.com was registered on March 15, 1985. That’s 27 years of growth. Paul Stahura, one of the industry veterans said that domain names will not go away within our lifetime and that they are more entrenched than the electricity plugs!
Can it grow even more, and even faster?
Yes, and here are my 3 points why I think that was the case back in 2012 when I first published the article, and why that’s the case now in 2021 when I am updating it.
1. Internet is growing
Everything around domain names is growing. Internet usage – going up. Mobile Internet usage – going up. Global Internet speed – going up. The number of websites, blogs, accounts – going up. The number of IP addresses, not that it’s going up, we’ve used up all the IPv4 addresses like 256.256.256.256, now we issue IPv6 addresses like 2001:0db8:85a3:0042:1000:8a2e:0370:7334. In laymen’s terms, IPv4 allows for only 4,294,967,296 unique addresses and we’ve used them all! We are more and more connected in every possible way you can think of. And boy do we love labeling things. Humans like it easy. They want to access their fridge on a cloud service called fridge.com, not http://2001:0db8:85a3:0042:1000:8a2e:0370:7334/Gh78$#whatisthis, right? The only thing that is going down is domain price (do you know those .com domains used to be priced at $100 apiece / per year?).
If you had any doubts the Internet was growing, the global Covid-19 pandemic hit, and everything became supercharged when it came to online. Even the .com domain name registration.
2. Making money online
Humans love to make a quick buck. They love to buy low, sell high. Do you know what are the 2 most popular jobs where you buy low, sell high? Stocks, real estate, and drugs (at least that’s what I saw in the movie American Gangster). Domains have been called online real estate ever since the first news article was written about them. And they have so many similarities. First of all, they are the address. If you have a good address, there’s a good chance you will have more people “passing by your store”. In return, this means more $$$ for your business.
Domain similarity with stocks is not just “buy low, sell high”. Ever heard about IDNX.COM? It seems that when stockbrokers are selling high those high tech stocks from Silicon Valley, people and most companies also buy domains high! And this is something that has been going on for at least 6 years (2006 – 2012)! The good news is, you don’t need to be a licensed stockbroker, or a licensed real estate agent to buy or sell domains. You just need a proper tool to find a great name, and signup to Sedo, Godaddy Auctions or Afternic, and you are ready to go.
Sedo reported over a million users. So, the supply is growing, what about the demand for great domains? Well, that’s growing too, everybody wants a domain/website that has targeted traffic. What helps an ordinary user build a website with targeted traffic? Tools like WordPress, Adwords, SEO and social media. WordPress currently holds around 20% of the entire web and Adwords brings in 99% cash that Google makes. How are SEO and social media doing? Just check your inbox and count how many SEO and social media offers you get. This adds up to point 1, that it’s also growing. I mean, Google stocks hit an all-time record high this October and their income is constantly growing, and Facebook is the second most visited website on the planet!
3. New gTLDs are rampant
To top it off, I give you point number 3. Various companies applied for 1930 new gTLDs according to ARStechnica. According to NewgTLDSite just the application price costs quarter of a million, and in practical reality it will cost you around $500k – $2M for an uncontested basic gTLD. So companies were prepared to shell out over $348M just to stand in line? How much do you think they are prepared to invest in advertising, building the systems… You already have companies like Domain Diction with Alan Pinkard Brand. They are a marketing consultancy, solely dedicated to Top Level Domains. They are specialists in delivering critically effective marketing and usage programs for existing and new TLDs. If you are thinking this is only for squatters, think again and wake up!
Lawyers are getting better by the day, and to keep out the jargon (like UDRP) to the minimum. Let’s just say the judges are getting better, these aren’t the nineties anymore. Not to mention there are now companies with 20 years of experience in protecting companies from squatting.
And who are the companies that made the 1930 applications? Godaddy and other registrars? Not really, as you can see from the picture above, Google made quite a few. Amazon is here, Apple made a few. But most of them were made by a new company Donuts, put together just for this. You had a chance to read an interview with their CEO Paul Stahura, they are in with 307 gTLDs.
Yes, domain flipping still makes sense
By now, you must be aware that this industry and complimentary services are about to grow exponentially.
What determines a great domain name? What domain information is most important? How do you determine credibility, how do you determine relevancy? I think Google solved the relevance problem pretty well, and they found a way to profit from it. But what about domain credibility? They solved this, by default when they solved relevancy. So I think there is room for progress.
Can a domain be credible if the website is hacked or down often? Packed with trojan viruses, hosted on an IP address that’s blacklisted constantly? Is it the same if your website is hosted in New York with secondary power, and an Internet connection, or in some third-world country in an apartment? I believe that in the world of IT, technical information deserves to play a more important role. I also think that serious companies cannot have a website that is not regularly updated! This harms the users, and there’s no way they can protect themselves from the companies they are buying from! You visit a website and you get a virus, this has to stop. If you are visiting a website that is spamming, experiencing downtime every few days, has phishing problems, this should be prevented.
With that being said, I think it is safe to say that domain registrations have a long way to go.