Make Money Online by Buying and Selling Domain Names

The idea is simple, you buy a domain name e.g. ZitBusters.com, you list it for sale, at the industry auction sites such as Sedo or Afternic (or possibly even eBay) someone offers you a vast amount of money for it and you sell it. Well, that’s the idea, the reality is somewhat more prosaic.

To sell the domain names you buy, you will probably need to actively market them i.e. find the e-mail addresses of people that you think may be interested in your name and fire off an e-mail. If you’re lucky or the name you have is an obviously excellent name then you will get an answer saying something along the lines of “How much do you want for your name?”, which is when negotiations begin.

So what is an ‘excellent domain name’. Generally, they are dot coms (dot coms are worth around ten times as much as dot nets) and they are generic e.g. shoes.com, beer.com, business.com.

How much are generic dot coms worth? Well, the highest sale so far in 2008 is Fund.com which sold for the tidy sum of $9.9 million, Invest.com came in at number 5 and sold for $1.015 million, NewlyWeds.com on the other hand was number 53 and sold for $130,000. Sales are reported every week over at DNJournal.com where you can also see a list of the highest selling names of the year.

You may have seen the iReport channel on CNN. Where did they get the name iReport from? They bought it from self-styled ‘Domain King’ Rick Schwartz for $750,000. Rick Schwartz is one of the most successful and well-known of the domainers in the domain name industry. Other big names to look for are Kevin Ham, who has a portfolio of domain names worth around $300 million, Frank Schilling, Sahar, Rick Latona, Yun Ye who sold his portfolio of domain names for $164 million and many more. All these guys have interesting tales of how they got to be where they are by simply buying domain names, hanging on to them for a while then selling them on for a profit.

So what sort of names should you buy? As mentioned above, generic names are the best but of course most of the dot coms are already gone. So if you want a good generic name you may have to buy it off the person who already owns it. Alternatively you can wade through long lists of names that are dropping (i.e. not being renewed) at places like TDNam and Snapnames. Or of course you can try and discover a gem that no-one else has registered (very difficult as all dictionary word dot coms were registered long ago).