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Domain Name Monetization

  

Buying & Selling Domain Names

This is where the bulk of the money made in the domain industry occurs and these are he success stories most often seen in the news. The most famous success story is probably the sale of business.com for $7.5 million in 1999 after it was purchased only two years earlier for $150,000.

How It Works, In a Nutshell –

The basic concept is self-explanatory – either register a name or buy one from another owner, then try to resell it. You might attempt to sell your domain(s) to other domainers, start-up companies who desire the name, affiliate marketers who like the keywords in the domain,  or established companies who want the domain for their own site.

You have a number of tools at your disposal when trying to sell domains.

  1. You can list the domain for sale with a parking service.
  2. You can work with a domain name broker, an individual or company that helps domainers buy and sell domains.
  3. You can auction your domain off on a domain brokerage site, in a premium auction, or on a consumer-based auction site, such as eBay.
  4. You can create a single “For Sale” page and put it up on your domain.

The thing to remember is that selling domain names is similar to selling any commodity. You can run an aggressive marketing campaign or you can sit back and wait for a buyer to find you. There are advantages and disadvantages to both approaches.

Buying the Right Domain Names

As stated several times throughout this guide, always remember that cybersquatting is illegal. Registering the trademarked name of an existing company and attempting to sell the domain back to that company will only result in trouble.

The easiest way to avoid trouble is to buy and register names that are actual words (or acronyms for common phrases). Remember, a company can’t necessarily put a restriction on a generic English word, like “business”. Common sense will usually help you avoid a trademark infringement lawsuit. When in doubt, you can always search common trademarks at the US Patent and Trademark Office website.

As you look for suitable names to add to your portfolio, keep in mind all of the things that make a domain valuable:

  • A single word domain is usually worth more than a two or three word domain.
  • A .com is almost always worth more than other TLDs.
  • Generic TLDs are usually worth more than ccTLDs (except in the case of .co.uk and .de – these have been increasing in value lately, and are often worth more than .info or even .net names).
  • A two word domain name without dashes is worth more than one with dashes between the words.
  • A common acronym is often worth more than the spelled out phrase.
  • Common words with the addition of suffixes and prefixes are usually not worth much, unless they have a high search value. For example, OnlineSoftware.com would probably be worth more that liquidSoftware.com.
  • Substituting numbers for letters (’4’ instead of ‘for’) usually brings the value of the domain name down, not up.

Before getting into the different ways to sell your domains, we’ll share a word of caution. You might have a sudden brainstorm where you think up a good prefix or suffix would fit with just about any subject and realize that it’s rarely used in domain names. Then you might be tempted to buy every possible word combination you can think of with this prefix or suffix.

Don’t waste your money.

Sleep on it and ask a few close friends what they think. If anything, buy a few of the most popular words (like computer, business, and stocks) with the prefix/suffix and see if they sell. Otherwise, you’ll likely end up stuck with hundreds of domain names that sounded good at one time but are virtually worthless in actuality.

Selling Your Domains

As mentioned earlier, a domain seller can be as aggressive with sales as he or she wants. But in the domain industry, there are some drawbacks to aggressively marketing the sale of a single domain.

First of all, when trying to sell a domain to suitable companies, you run the risk of happening on one that might already have the phrase or name trademarked. If they can prove that you tried to sell the domain to them (or even their competitors), you could become implicated in a case of cyber-squatting. So you have to be careful when soliciting individuals about a domain sale.

You also may have to lower your price if you decide to promote your domain name sales. After all, marketing involves finding a need for your product and sometimes that requires creating a need. If the target audience isn’t already actively seeking your domain name, then you don’t have quite as much leverage when negotiating a sale. Remember, you approached them, not the other way around.

But at the same time, aggressively marketing something is the key to making more sales. That could mean posting your sales on forums, if allowed. It might involve sending out press releases. It could even be a simple matter of knowing where to sell your domains (how much coverage a specific broker gets and how aggressively they market their own services).

The bottom line is that launching a marketing campaign will bring you more sales, but waiting for the buyers to come to you will usually result in higher sales prices.
Another way to sell more domains is to establish yourself as a domain reseller. This, however, takes time. It also requires investing money in enough quality domain names to establish yourself as a reliable source, which can be an expensive endeavor. If you’re a skilled negotiator, you could make some substantial profits. However, this method requires substantial investment without any immediate returns. It’s better to at least gain some experience in the domain industry before trying this method.



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