What Is Domain Flipping: Definition, Cost & Providers

Domain flipping is the process of purchasing and selling domain names to make a profit. The goal of domain flipping is to buy domains at a low price and then sell them for a significantly higher price. Domain flippers can earn hundreds or thousands for in-demand domain names. Though rare, some domains sell for millions.

If you want to get started domain flipping, you’ll need a reliable and affordable place to purchase your domains. You can register domains on Domain.com for as low as $2.99 per year, and .com domains start at $9.99. Visit Domain.com today.

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How Domain Flipping Works

It’s important to be crystal clear about what a domain name is and isn’t. The Domain Name System (DNS) is comprised of directories of unique names that are translated into internet protocol (IP) addresses. In layman’s terms, your domain name is an address on the internet. It identifies a unique entity that points people to a specific web presence. Domains can be similar, but they are never identical.

A domain name is not the same thing as a website. A domain name is just a string of characters that identify a one-of-a-kind address on the web. A website, on the other hand, is a collection of words, images, resources, and multimedia content that are posted on the internet under a domain name.

Domain flipping is exclusively about buying and selling domains. When you flip domains, you’re transferring ownership of the domain name and not any website content that is now or could have been once related to that name. Website resellers buy and sell both the domain and the website content related to that domain name.

Domain Flipping Is Simple, but Not Necessarily Easy

Domain name flipping is really as simple as it sounds: you buy a domain for a low price and try to sell it at a significantly higher price. The better you become at buying domain names with great resale value, the more money you can make. Just because domain flipping is a simple business concept, though, doesn’t mean it’s easy.

There are many steps to successful domain flipping. You must understand what types of domains are most profitable. You need to know how to research new domains to buy or find expired or existing domains to purchase. You also need to know how to locate buyers willing to pay a healthy price for your domains so you can make a handsome profit.

Is Domain Flipping Right for You?

Domain flipping can be a full-time business, a side business, or a lucrative hobby. Before deciding whether domain flipping is right for you, it’s wise to first understand the skills and steps required to make money domain flipping.

Successful independent domain flippers are skilled researchers who sometimes comb through keyword data and domain registration sites for hours on end. They study domain sales trends, explore domain histories, and search for patterns that help them buy potentially profitable domains.

Flippers must master how to market and sell domains relatively quickly, lest they sit on costly unsold domain inventory for days, weeks, or even years. Domain flippers must also plug into possible future trends and know when they should hold on to a domain that may be worth considerably more in the future than it is in the present.

Successful domain flippers are also risk-takers. You need to be willing to invest in domain names and put in the effort required to resell those domains. You can start domain flipping on a shoestring budget of a few hundred dollars, though seasoned flippers advise that you’ll probably want to invest at least $500 to $1,000 upfront to get a good sense of what works and what doesn’t.

Domain Flipping Costs & Profit Potential

Domain costs vary among domain registration providers. The most profitable domains to purchase have a .com extension. You can register new domains on Domain.com for as low as $2.99 per year, and .com domains start at $9.99. The most popular domain extension for domain flippers is .com, since that is the extension most people still equate with domains, and hence, often type it in by default.

You could also choose to buy other domain extensions, such as .org, .co, .io, .news, .tech, and .net. New extensions worth watching are .club, .services, .training, and .expert. You can expect to see even more added in the future.

There are a few different strategies you can take when purchasing domains to flip. For optimal results, it’s wise to vary your domain-flipping strategy.

The three different types of domain purchase strategies include:

• Create a new domain: You can create and buy a new domain that’s never been registered before.
• Purchase abandoned domains: You can watch for domains that were once registered and that have been abandoned, and buy those you feel have the most promise.
• Buy a used domain from a reseller: You can buy domains directly from others who you suspect are selling them for far less than they’re actually worth.

The truth is, you can make good money buying new domains, expired domains, and domains owned by others. Domain flippers typically use a variety of options when amassing an inventory of domains to resell.

Domain Costs

Prices for new domains that you create yourself are often low; however, it can be difficult to come up with potentially profitable domain names that aren’t already taken. Tens of thousands of domains are registered every day. So, don’t be discouraged if you come up with several ideas that are already taken; flippers need to be relentless in their pursuit of domains that have significant profit potential.

Domain Costs for .com Domains From Popular Domain Providers

Costs for abandoned domains and domains purchased from resellers can range from 99 cents to hundreds or even thousands of dollars. As a domain flipper, you want to have a reasonable idea of what a domain might be worth before investing big dollars on domains that you plan to flip. The rule of thumb is to be frugal when buying domains to flip, but not penny foolish.

How Much You Can Make Flipping Domains

You may have heard stories where a domain was bought for a nominal fee and then sold for millions. For example, MicroStrategy recently purchased Voice.com for $30 million. It’s unclear what the former owner of Voice.com originally paid for the domain, as some domain names are sold and resold many times throughout their life cycles. In all likelihood, when the domain Voice.com was originally registered, it was probably purchased for less than $20.

You could have a $30 million score in your future, but average domain flippers usually make a lot less. The amount of money you can make depends on the number of domains you successfully sell and the price you are able to get for those domains. You also need to consider that you’ll buy some domains that won’t sell, and that’s just part of the cost of being a domain flipper.

Part-time flippers can earn from $1,000 to $8,000 per year flipping domain names. Full-time flippers earnings can range from $30,000 to $100,000 and more per year.

“Domain flipping is not a get-rich-quick tactic. Yes, you can get lucky and sell a domain for a ludicrous amount of cash. If you’ve been in the domain flipping business for a while, chances are you may have had an experience like this already. For those of you just getting into it, though, set appropriate expectations. Start with buying cheap domains with high potential, and shoot for decent margins. The big one may come, but you can’t guarantee it.”

– Jason McDowell, Owner, Wayzata Dental

It pays to do your homework before buying domain names to flip. When your goal is to make money buying and selling domains, you want to purchase domains at the lowest price possible.

You also want to buy domains from someone who has the legal right to sell them to you. Reselling stolen domains, even if you didn’t realize they were stolen, will land you in legal hot water. The Internet Corporation for Assigned Names and Numbers (ICANN) is the nonprofit organization that oversees the Domain Name System (DNS). To avoid fraud, only buy domains from ICANN-accredited registrars. Consider consulting LegalZoom if you have any questions about domain registration legalities and how to protect yourself from domain theft.

Domain Research: How to Evaluate Domain Profitability Potential

A rookie mistake that new domain flippers make is not understanding what makes some domains valuable, while others have little chance of ever turning a profit. The truth is, there are a lot of factors that go into whether a domain has a chance of earning a significant return on your investment. It’s not a cut-and-dried formula. The better you become at researching domain names, the more likely you’ll be successful buying and selling them.

How to Conduct Domain Research

One of the simplest ways to get a quick overview of domain sales trends is to visit NameBio or estibot and search for domains that have sold recently. Be sure to take notice of how much money various types of domains are yielding. DN Journal also provides a regular update of recent domain sales.

When researching domain sales, pay attention to the extensions used, possible use applications, length, and keyword patterns in the domains. When flipping domain names, you’ll want to have a strong handle on what’s selling and any trends evident in those sales. By definition, trends change frequently, so this type of domain research must be an on-going process.

If you plan to buy and sell domains that have been abandoned, be sure to visit ExpiredDomains.net, which conveniently links you to domain owners from whom you can buy expired domains. You can purchase many of these domains for as low as 99 cents.

You can also use free keyword research tools like Google’s Keyword Planner tool through your Google AdWords account, or Keywords Everywhere to view frequently searched keywords that could be incorporated into domains. Paid keyword tools such as Moz, KWFinder, and SEMRush offer advanced keyword research tools that could prove helpful too. Wherever there is high traffic on Google and low competition, there is a chance to come up with a targeted domain that has profitability potential.

“A few years ago, exact match domains or a domain matching a major search query had a tendency to rank for that specific term or query more easily than other domains. However, that has changed with Google and other search engine algorithm updates. Today, domain flippers should focus on short domains (the shorter the better) and pick domains that are a dictionary word (not always, but usually a good practice). It is also a good idea to acquire .com’s, as they are more sought after and valuable than, say, .org or .net domains.”

– Manny Vetti, Managing Partner & Director of Marketing, Back Taxes Help

Where to Buy Domains

You can buy new domains from a site that specializes in domain registration, such as Domain.com, where domains start at $2.99 for a full year’s registration. Hosting service providers, such as DreamHost, also sell domains; .com domains start at $9.99 on DreamHost. You can also buy domains from sites that specialize in domain flipping.

How to Buy Expired & Currently Owned Domains

There’s an active domain aftermarket where you can purchase previously owned domains directly through a domain seller, at a domain auction, or by submitting a back order request on domain seller sites. Since domain flipping involves both buying and selling domains, you may use some of these sites for buying domains, but you’ll definitely want to explore them for selling your domains too.

Here are a few places where domains are bought and sold online:

*Domain parking services allow you to monetize a domain that is not yet active with third-party ads.

Before buying a previously owned domain, make sure you understand its history. Domains with numerous links to spammy sites are much tougher to sell. Check for domain authority (DA) before you buy. Also, be sure that Google has not banned it by seeing whether the domain appears in the Google cache. Used domains that aren’t visible in search engines aren’t worth anything.

How to Make Money With Domain Parking

Domain flipping is often done with the intent of finding a buyer quickly after you’ve purchased a domain. Some flippers prefer to hold on to some domains longer in hopes of getting a better price.

If you intend to hold on to a domain for a while, or if you have some domains that aren’t selling, you don’t have to let your domains sit idle. Instead, you can park your domains. Parking a domain means you monetize your domain by serving ads through a landing page generated by a third party that provides domain parking services. This allows you to make money from your domains in between the time you buy and sell them.

Legal Rights & Ramifications of Buying Domain Names

In considering which domains to buy, it’s not enough to make sure that the name is available. You also need to do a trademark search to ensure the name isn’t legally owned by someone else. Buying a name that is legally trademarked by another business with the intent to make money off of that company’s reputation is called cybersquatting, and it’s illegal. If you need help figuring out the legalities of domain flipping, consider consulting with an attorney through LegalZoom.

How to Sell Domains

Domain flipping is somewhat of a numbers game. Some of the domains you purchase may never sell, so you need to make enough money on those you do sell to recoup your total investment expenses while leaving plenty of margin left over to make money.

The most successful domain flippers list their domains on various marketplaces to maximize their chances of finding the right buyers. In an ideal situation, you’ll get multiple buyers competing for your domains so that they’ll drive sales prices up.

Sell Domains Through Direct Sales, Auctions & Back Orders

There are three ways that domains are typically sold. The first is direct selling, where you establish a price for the domain, the buyer agrees to that price, and the sale moves forward.

The second and highly popular way to sell a domain is through an auction. When selling domains through auctions, you establish a minimum price for your domains and hopefully people will bid on your domains. Thousands of domains are sold through various marketplace auctions every day. Auctions last for a set period of time, typically from four to 30 days.

A third way to sell domains is through back orders. Most domain marketplaces allow potential buyers to place a domain on back order. Potential buyers set the price they are willing to pay for a domain, and as the owner of the domain, you are alerted when this happens. You can then choose to contact the interested customer directly to negotiate further with them if you feel their back order bid is within an acceptable price range for you.

Domain Marketplaces Where You Can Sell Domains

A domain marketplace is an online forum where domains are bought and sold. Sellers list their domains on the marketplace and commissions are assessed when the domain is sold. Average sales commission rates range from 10% to 20%.

Domain flippers can choose from a wide variety of marketplaces to list their domains. The most successful domain flippers list their domains on multiple sites, though some marketplaces have rules surrounding when multiple-site listings are allowed and when exclusive listings are required. For example, if you’re putting a domain up for auction, a marketplace might require listing exclusivity.

Popular domain marketplaces include:

• Flippa Marketplace: List your domain for $15 per month and pay a success fee of 5% to 15% when your domain sells.
• GoDaddy Auction: Sales commission fees range from 10% to 20% with a $15 minimum fee.
• Sedo Marketplace: Standard Sedo Marketplace auctions require no listing fee and you’ll pay a 15% commission for a successful auction sale. Direct auction setup fees are $59 and the Auction Events application fee is $10; the standard 15% commission is applied across all auction types.
• NameCheap Marketplace: Sales commission are a flat 10%. Domains sold must be registered with NameCheap; domain transfer fees range from $8.88 to $28.88.
• Afternic: Domain sales commissions range from 10% to 20%. You can join Afternic for free.

Domain marketplaces differ somewhat in selling guidelines, how the selling interface works, types of auctions held, and other areas related to buying and selling domains. It’s best to explore each option thoroughly before committing to selling through a domain marketplace.

Disable WHOIS Privacy

When a domain is registered, personal information, including name, address, phone number, and email address, is required. Anyone can then see that information by doing a WHOIS lookup. Most website owners purchase WHOIS privacy when buying their domains to block this personal information from public view. When you’re flipping domain names, you may want to disable WHOIS privacy, because you want to be found by people who may be interested in purchasing your domains.

Pros & Cons of Domain Name Flipping

If you’re thinking about going into domain flipping, you need to prepare yourself for the challenges you’ll face. There are great advantages to becoming a domain flipper, but there are downsides, too.

Pros of Domain Flipping

Domain flipping can be a profitable side business or full-time business. Don’t expect to go into it making millions, as that is extremely rare, yet some people make a very nice living buying and selling domain names—the best make six figures a year. If the idea of coming up with creative new domain names or hunting for bargains among the many expired domain names available sounds exciting to you, domain flipping could be a good money-making avenue for you.

Cons of Domain Flipping

The biggest downside to domain flipping is that it’s difficult to find good domains to sell. With over 350 million domain names already registered, finding domains that you can sell for a decent profit is hard. In fact, it’s very hard. Be prepared to spend hours and hours researching ideas.

Be aware that not every name you buy to resell will actually sell. You’ll have unsold domains in your inventory; that’s just the price of entering the domain flipping world.

Another con for domain flippers is that your competition won’t just be the average person out there trying to earn a living flipping domain names. Domain registrars that end up owning thousands of abandoned domains every month are in the business of monetizing unused domains too. These domain providers want to earn a profit and they have sophisticated algorithms that help them know which domains are likely to have profit potential. So, don’t count on getting an easy win when buying a dropped domain.

Frequently Asked Questions (FAQs) About Domain Flipping

Answers to the top questions people ask about domain flipping can be found below.

How do I know if my domain name is valuable?

Domains that include highly searched keywords are typically the most valuable. Domains that end in .com are valued considerably higher than those with other extensions. Short domains tend to resell for more than long domains. You can use tools like GoDaddy’s domain value appraiser to get an idea of what your domain might be worth.

Is domain flipping legal?

Yes, domain flipping is legal. What’s not legal is cybersquatting, which is when you purchase a domain that incorporates a trademarked name with the intention of profiting from that trademark-holding entity’s reputation. The Anticybersquatting Consumer Protection Act of 1999 protects business entities from cybersquatting.

Can you make money flipping domains?

Some people have earned millions flipping domains, though that’s rare. Successful domain flippers can earn $30,000 to $100,000 or more flipping domains. Domain flipping can also be a lucrative hobby or part-time job for those who enjoy the process of creating new domains or finding existing domains to sell that have resale viability.

Bottom Line

To make money flipping domains, you need to have a keen sense of what makes a domain valuable and the types of domains today’s buyers find most appealing. The most successful domain flippers buy relatively low-cost domains and earn six figures flipping domain names. Most flippers use popular domain marketplaces to conduct domain sales.

One of the best ways to make money flipping domains is to buy new domains to resell. Domain.com is one of the top domain registration providers in the world. You can buy domains on Domain.com for as low as $2.99, and .com domains start at $9.99. Visit Domain.com today.

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