In the world of the Internet, domains are one of the most purchased commodities and domain trading growing at a rapid double-digit rate. There are many online platforms out there to trade domain and get a good return. According to Wikipedia’s page there is a domain named voice.com that was sold for a whopping $30 million in the year 2019.
So in order to make money by domain trading, let’s know what is domain trading?
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What Is Domain Trading?
Buying or selling of domain for a certain price point, using a broker website or directly, is known as Domain Trading. In other words, it is an opportunity for investors to buy a domain name for less and sell them at a higher price in the coming future.
How To Make Money By Domain Trading?
Making money with domain trading is quite easy, but you need to follow certain things and criteria and your domain name should be worthy for the potential buyers. You can literally buy a domain for just a few dollars and sell them for hundreds and thousands of dollars.
Value of Domain
If, you want to be successful in domain trading, first you need to determine the value of a domain. The domain name should be short with a length of 6-14 words. It is found that domain with lower character count does better than those higher character count.
Another thing is that you should consider a famous top-level domain (TLD) like .com, .net, .co, etc are in more demand than the newer TLD like .tech, .site, etc.
While building a domain portfolio, you should consider the domain names, that contain generic names, product names, geographic location names, or upcoming event names. These types of domains generally perform better than other random names.
Where To Buy A Domain?
You should buy a domain from a well known and famous domain registrar like Godaddy, Hostinger, Bluehost, Bigrock, etc. They provide domains at a lower price and payment from most of the countries supports their platform.
Security is a great concern for domain trading and transferring a domain from these sites is also very easy.
Where To Sell Your Domains?
Before selling your domains you need to set a price for your domains or an auction for it. A fixed price attracts buyers, but an auction could lead you to earn more, with huge bids.
There are many domain flipping platforms out there like Sedo, Filippa, etc who let you advertise your domain in their platform, and in exchange for that, they charge some commissions or brokerage. You can register yourself in those websites and sell your domain easily and securely.
One thing you should remember, before purchasing a domain for trading purposes, do not hide your personal information and contact details, as many interested people and potential buyers may contact you directly and you have to pay no brokerage on direct sale.
Risks Involved In Domain Trading
As much as domain trading is a very profitable business, there are several risks involved in domain trading. The main risks involved in domain trading are liquidity risk, valuation risk, and legal risk. As a buyer you should not ignore these risks.
1. Liquidity Risk
Financial securities like stocks, bonds, currencies, and other commodities are easy to sell through a broker, but selling a domain is very hard. It takes months or even several years to sell a specific domain. It takes various factors like buyer’s interest, suitable price, domain type to make a proper sale.
There is always a liquidity issue in the domain trading section as it is very rare and hard to convert a sale. One thing you can do is describe your domain properly to the potential buyer when showing them why it will succeed and justify your domain’s valuation.
2. Valuation Risk
Another risk involved in domain trading is the valuation risk. There is no way you can determine a proper valuation of a domain and it always depends upon the buyer and you the seller.
You can sell a website for even thousands of dollars with a moderate name and quality, but on the other hand it is difficult to sell a good quality domain for even hundreds of dollars. It always depends upon the mood of the buyer and the opportunity.
3. Legal Risk
When you buy a domain name, you should always, check if the name is trademarked or resembles it closely, else it will attract a lawsuit on you and you have to even give the domain to the trademark owner. This kind of risk is known as legal risk.
Domain trading is a great way to earn online and an opportunity for small online businesses at a low budget. If you have a job then you can do it and earn some passive income. Overall, it is a great way to make money online.
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