Tips For Selling Domain Names For Profit
Here are some tips to point you in the right direction when trying to buy or sell a domain name for profit:
- Identify the domains niche. Before selling a domain name, understand its niche. Generally, industry-specific domains are easier to sell as they cater to specific audiences.
- Pick a strategic selling platform. If your domain is listed on a well-known platform with good ratings and reliable resources, buyers are more likely to purchase your domain. Before deciding on a marketplace, due your due diligence and look for user reviews on platforms like Trustpilot.
- Use psychological pricing. Apply a psychological pricing strategy to entice buyers. For example, price it at $399 instead of $400.
Step : Obtain Necessary Permits And Licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
Federal Business Licensing Requirements
It is essential to acquire the correct accreditation for your domain registration business in order to avoid legal trouble.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a domain registration business. Learn more about licensing requirements in your state by visiting SBAâs reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerkâs office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Have Your Domain Appraised
The first step in the process is to determine the value of your domain name. This can be done through a variety of channels. You can appraise your domain name yourself or have the domain name appraised by a professional.
Self-appraisal is a bit more challenging than with tangible commodities like a house or car, but the same process can be used. Some people check out sale prices on similar domains and work from there. A good resource to use when trying to appraise your domain name yourself is NameBio. They have a keyword-based search engine that looks up sale prices of particular domain names. You can find information on lowest prices, highest prices, average prices, who sold the domain and other pertinent information.
But lets say you cant find a value for your particular domain name. This is when enlisting the services of a professional appraiser can help. A professional appraiser knows the market inside and out, and can provide valuable insight that can help you arrive at a fair market value for your domain name.
Read Also: How To Get A Web Domain For Free
How To Become A Domain Reseller
There are two ways to become a domain name reseller. The first one is to approach the Internet Corporation for Assigned Names and Numbers, the international non-profit organization that regulates the domain name industry. ICANN offers guidelines and regulations for accredited agencies and demands you to have a certain level of assets. Once you become an accredited provider, you will get lower costs on domain name registrations.
Alternatively, you can use an ICANN accredited domain registrar that offers domain name reselling packages. To become a reseller, you will need to create and register an account with a web hosting firm so that you can host the domain names you resell.
Like all other serious businesses out there, a domain name reselling calls for elite business practice, marketing, and hard work. Registering and reselling domain names requires buying domain names. As the market is already flooded and new domain resellers are entering the market each day, becoming a domain name reseller is not a business venture for everyone.
Even though the businesss nature is unpretentious and straightforward, not every domain reseller makes profits. To become a successful one, you need to have the ability to market your services well and lure a significant number of clients for the business to be profitable. If you have all that it takes and want to test the waters, feel free to with NameSilo and conquer the domain reselling industry.
Choose The Right Domain Extension
When picking the extension or TLD for your domain name, .com is still the best choice unless you have a reason to choose something else.
While Google confirms that your choice of TLD will not impact rankings, it does affect consumer perception. Many people view other TLDs as less trustworthy.
That said, .net or .org extensions are not uncommon, so they can be good secondary options if you find the perfect name and the coveted .com isnt available.
But if you do decide to go with an extension other than a .com, make sure you take a look at what type of website is currently on the .com extension. Someone is bound to go there accidentally while looking for your brand. If the site holds fishy or offensive content, you might want to steer clear of that name altogether.
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Protect Your Domain Sale With An Escrow Service
Once you get an interested buyer, its normal to feel eager. However, try not to let your excitement get the best of you. Its almost impossible to be too cautious with an online sale.
Unfortunately, not everyone on the internet is looking for an honest deal. Theres always a chance of losing your domain to a scammer. Fortunately, an escrow service can go a long way towards preventing that.
Escrow is a legal agreement where a company acts as a neutral third party. They hold your domain name until theyve received the funds. Then they execute the trade to ensure that both parties get what they agreed on.
There are plenty of high-quality escrow services out there. Were particular fans of Escrow.com, given its stellar track record and popularity:
However, any other secure service will do the trick. Just take a look at how much they charge in commission you probably dont want an unwelcome surprise. The customer service may also be worth investigating, in case you ever need support.
In our opinion, the only way to go wrong here is to not use an escrow service. It can be tempting if youre not excited about paying a commission, but that discount comes with a pretty severe risk to your security.
This goes double for any suspiciously high bids. Scammers may offer you an unreasonable amount of cash for your domain, but insist that none of it goes through escrow. That way, they can take the money and run. We recommend that you avoid these kinds of deals at all costs.
Step : Register For Taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It’s really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation .
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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Essentials Of Domain Flipping
Here are some essentials of domain flipping you need to follow.
Easy Does It
As I mention earlier, you cannot buy a domain today expecting to sell it for a good profit overnight. This business involves patience. Often you may have to wait for months before a customer envisages interest in the domain name you own.
Realistic Pricing
Price your domain names realistically. No individual or organization will pay exorbitant rates for any domain: they can easily find cheaper variants and purchase one directly.
I remember an instance where someone had bought a domain of a petroleum company based in the Arabian Gulf and was hoping to sell it at very high price.
Instead of paying for the domain, the company bought a matching one with the prefix of the country where it is based.
Renew Your Domains
The standard practice of flippers is to buy a domain for a year or two. You might be unable to sell these within that period. Hence, the domain seller will ask payment to extend your ownership.
If you are confident about the domain name becoming popular in future and enable recovery of investments, it is ideal to renew the subscription.
Often, buyers wait for you to abandon a domain name before jumping to buy it. A small investment can prevent this scenario and ensure you make profits.
In Conclusion
Buying and selling domains is a great way to make some extra money on the side. It might not make you rich instantly. But with some patience and proper planning, you can get good returns.
How To Become A Prosperous Domain Reseller
If youre planning, how to start a domain reseller business. Youll require taking some important judgments. Selecting accurate choices is the main important thing to run a successful company.
Thats why weve addressed these start-up guides for a whole domain reseller program. This will help the business owners to make the right decisions.
Here are some essential steps to understand while starting a domain reseller India hosting business:
Recommended Reading: How To Become A Domain Broker
Make Sure Your Contact Information Is Public On The Whois Directory
Most people dont want their contact information publicly listed online. However, when youre ready to sell a domain, this is the time you DO want your contact information available.
Lets say someone searches for a domain name to purchase, but you already own it. If they can find your contact information in the WHOIS directory, they can contact you directly and offer to buy the domain name from you.
You can update your contact information through your website host or read more about how to update your contact information on WHOIS.
Step : Set Up Your Business Phone System
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. Thatâs not the only benefit it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. Weâve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it’s fair pricing.
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What Is A Domain Name
Every website on the internet has an IP address. These addresses point to a websites location think of them like GPS coordinates. The IP address, which is generally a set of numbers, usually resembles something like this:
216.27.61.137
Unfortunately, trying to remember all of those numbers in order to navigate to a website can be challenging. Thats where domain names step in and lend a hand.
A structure called the Domain Name System translates those IP addresses into names that are simple to remember. Those names are called domain names.
Your website’s domain is what people enter into the address bar on their browsers to point it toward your website. In the simplest terms, if an IP address is your websites GPS coordinates, the domain is its street address. Some examples are mailchimp.com and google.com.
When someone types a domain into a browser, it gets routed through a DNS server. That server translates the name to figure out which IP address it points to. Then it grabs the data for that website and delivers it to the browser. This process happens in a matter of seconds, letting you find and view a website fast.
Is Domain Flipping Risky
As with any business, there is some slight risk to domain flipping. But heres the good news: your losses can be extremely small. Because a domain name only costs roughly $10 annually, thats the amount you can lose.
With that said, if you end up purchasing hundreds of domain names, those annual renewal costs can become costly so youll want to ensure you have a plan for each domain.
Dome name flipping can be as risky as you make it.
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Use An Escrow Service For The Safe Transfer Of The Funds And Domain
When buying or selling a domain online, using a licensed and bonded escrow service will reduce the risk for both the buyer and the seller.
Using an escrow service to handle your domain name sale guarantees you get paid and the buyer gets their domain. All of the domain name marketplaces and auction sites referenced throughout this guide offer their own, free escrow service as part of their platform so when you sell a domain name through one of these sites, all you have to do is make sure you are able to transfer your domain name the moment it sells.
But if you sell your domain name through direct negotiation with a buyer or you are using the service of a brokerage firm you should always transact through a licensed escrow company.
The way a domain name escrow works is that both parties agree to the terms of the transaction, which include the domain name and sale price. The buyer will then have to submit a payment for the agreed amount into the escrow account. Once the escrow service has verified and secured the payment, you are instructed to transfer the domain name to the buyer. Once the buyer confirms they have possession of the domain the funds will be released to you.
The most commonly used escrow companies for domain names sales are Escrow.com and Payoneer Escrow.
Pros Of Domain Flipping
Domain flipping can be a profitable side business or full-time business. Dont expect to go into it making millions, as that is extremely rare, yet some people make a very nice living buying and selling domain namesthe 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.
Read Also: How To Become A Domain Reseller
Sell On A Domain Name Marketplace
Another way to find buyers for your domain is to register it on a popular domain selling platform. Two of the best online domain marketplaces available are Afternic and Efty.
These sites offer beneficial features like integrated escrow services and a user-friendly interface, and have considerable web traffic, increasing your domains exposure.
To list a domain for sale, simply set its price in the domain manager of the preferred site. At Afternic, domain sellers can set a fixed price or hold an auction. On the other hand, Efty requires sellers to set fixed prices.
Eftys plans start at $12/month for up to 50 domain listings. While Afternic does not charge a subscription fee, it has a 20% sales commission.
Benefits Of Domain Flipping
Before discussing how to start a domain name flipping business, it is important to understand the benefits of domain flipping.
Flipping domains is a highly profitable business . Many people have managed to earn over $100,000 a year in this industry, all from the comfort of their homes!
This passive income however does require some patience. This is because once you purchase a domain, we will park our newly bought domains where they will wait to be sold. I will explain this later in this domain flipping guide.
Since the internet is 24 hours a day, 7 days a week, 365 days a year business, you can flip domains every day, all year as there is no noticeable seasonality in this market.
Its easy. Once your domain is parked and marked for sale, all that is required from you is to monitor your email to check for any sale updates. This does mean however that the money you invest in domains will be tied up in this domain until such a time it is sold.
Buying domains can be quite cheap and anyone can afford it.
Its addictive, so sometimes you can be easily get carried away when you first start.
The domain market is huge. Every day thousands, if not hundreds of thousands of domains are registered and traded.
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Step : Define Your Brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren’t feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we’ll give you helpful tips and advice for creating the best unique logo for your business.
Recommended: Get a logo using Truic’s free logo Generator no email or sign up required, or use a Premium Logo Maker.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a domain registration business
Some all-in-one domain registration businesses will promote their services on television, but most companies getting started may want to think a little smaller. Consider running internet ads with companies that offer affordable and simple website production. You can also do coupon codes for cheap domain registry to spark interest and customer loyalty. Build up your reputation with honest and favorable reviews, so more people feel comfortable choosing your registration business over another.
How to keep customers coming back
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.