How can I enter domain trading business?

(Last Updated On: June 1, 2018)

 

When we read domain news websites, most of us are impressed by prices for which some domains are sold. However, to have such a valuable domain name in your possession in the first place, you need a lot of know-how of the industry and current global trends which will enable that.

We must acknowledge that the domain trading industry is not what it was five or ten years ago. The .COM domain is oversaturated with domain registrations. A large number of new generic top-level domains, such as .ONLINE, .DESIGN, .CLICK … etc. has become available, country code domains have become a popular substitute for unavailable .COM domains and niche industries. Internet giants have released their own custom domain extensions (for example, .APP was released by Google).

1. Learning

You probably are aware that the domain industry trendsetters have extensive knowledge about the industry, and you can find some of them on the forums, blogs, and other websites. Most notable is the Namepros Community forum, though I should mention WebMasterWorld, Webicy, Reddit … etc. You should become a part of those online communities and learn as much as you can from the experts that dwell there. Their practical know-how and advice on certain topics can save you a lot of money invested into domains that hold no profit value or can point you in the right direction.

2. Buying domains

Domain business is mostly about getting ownership of a domain, and turning profit from the sale later. Knowing that, if you have a certain investment budget, then you can buy a number of premium (valuable, keyword) domains that were recently expired or dropped (intentionally or by mistake), and hold on to them until you find a suitable buyer. Expired and dropped domains are a valid source of income for diligent domainers who scour the web constantly, looking for a valuable domain that is dropped. Even if the domain is not yet dropped but is only expired you should be looking for drop-catching services that charge you only with a successful acquirer of a domain name.

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Another option that is more appealing to many domainers is to follow global trends and registering a certain number of domain names at the time when a trend arises, so you may sell them later. For example, currently, machine learning and artificial intelligence is a hot topic and the .AI ccTLD domain is very popular as a domain for such company website as it presents short for Artificial Intelligence. Such domain name is best registered with a ccTLD focused registrar like ISTanCo. Registrars with certain kind of domain focus, in general, have more experience dealing with such domains and can provide faster support and service.

To keep registration and renewal cost down, be sure to check the registration and renewal prices with the registrar you chose as some may have hidden cost or they up-charge certain services. The Irist Domains registrar is one of my favorites as they offer straight registration and renewal prices. Some of the ngTLD are very affordable for a first-year registration while renewal prices are very costly so even if you do register a number of such domains, be prepared to drop them and check if you have disabled automatic renewal in your account setting else you might face a hefty domain renewal expense.

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3. Making profit

Finally, after you have acquired a certain portfolio of domain names, you should be looking for potential clients. Clients can be contacted over email, phone or other communication channel but before you start communicating with them, prepare a well-thought presentation of how a specific domain you want to sell to them will bring benefit for their company or business. Holding a large domain portfolio can be costly and you will need money to keep your domain renewals, so while you are searching for clients be sure to list your domain portfolio with other domain market websites (Sedo, Flippa … etc.) as that will increase your chance to make a profitable sale. The listing provides online visibility for your domains and you will surely receive offers for your listed domains. Respond to these promptly, in a timely manner, and take note that domain value can be negotiated.

On a final note, when you enter domain trading business, be prepared for renewal or redemption of domain names in order to hold on to your domain portfolio. Your domains are your investment, and the rule is you need to lose some to gain some. Not all of your domains will find a way to the end user, but without a sizable domain portfolio, you may not be on the road to profit. Only the domain industry experts can afford to hold a smaller number of strong premium domains, but even they mostly have hundreds of domains in their portfolio.

 

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