02.11.2023 15:30

Demystifying Popular Misconceptions About Domain Flipping

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The buying and selling of domain names also called domain flipping, is one of the numerous business opportunities available in the online space.

For people who might not understand domain flipping, it is simply buying a domain name with the plan that someone in the future will be interested in purchasing it for their business.

A domain name is like a real estate property, but in this case, digital. The owner has the sole right to build anything on it. This article is one of the numerous buildings on TechSpace.com digital property.

You can imagine domain flipping as purchasing a real estate property and selling it at a higher price later.

Due to numerous success stories, like the sale of Tesla.com for $11 million, there have been many misconceptions about this digital real estate business.

Domain flipping is a shortcut to wealth

It is possible to purchase a domain for as low as $1 and flip it for thousands or even millions of dollars. This does not indicate a guaranteed return on investment (ROI) for anyone in the business.

Domain flippers have thousands of domains in their portfolio, hoping that someone approaches to purchase one of them.

Some domain names are flipped for a few hundred dollars after years. Over those years, you would also be required to renew the registration. Considering the volume of your portfolio, the total sales might only be enough to cover payment for the renewal of registration for all domain names in your portfolio.

It is not a shortcut to wealth but could change your life story overnight if you are lucky and strategic enough.

.com is best for search engines

It is very easy to assume that because the .com extension is the most popular domain industry, it stands the best chance of attracting buyers. This is not, in its entirety, true.

Alphabet Inc, Google’s parent company, domain name ABC is registered with the .xyz extension. Startups are also registering their domain name with the .io extension.

Another misconception is that search engines, including Google, favor .com extension ahead of others, and this is also not true.

When researching your domain name, you can use the Saw.com domain appraisal tool to evaluate the value of similar domains with the extension you are considering.

Yearly sales of about 3% of total domain names is enough

Domain flipping business is both a game of volume and luck. As a starter, you may be told you only need to be able to sell about 3% of the domain names in your portfolio to make a profit.

People who are told this immediately commence the registration of about 500 domain names with the expectation of selling about 15 of them.

This is not impossible to achieve, but sometimes, you may not be able to sell any throughout the year. 

You may need to register thousands of domain names before you make your first sales.

Include brandable and SEO-focused words in your portfolio to increase your chances of making a sale. Also, avoid trademarked names.

Domain drop catching is better

Domain drop catching, also known as domain snipping, is when you purchase an expired domain. Investors do this in hopes that the domain name owner will want it back.

The truth is that if the domain is that important to the owner, they would not have allowed it to expire. Domain registrars usually give owners a redemption grace period of about 90 days after expiration.

For someone not to act during this period, the domain might not be important to them.

People like that are more likely to purchase a new domain instead of trying to retrieve the old domain name.

This is not in any way a discouragement for anyone looking into trying this strategy. But before you do, research the brand. If the owner has invested a significant amount in building the brand, the possibility of wanting the domain name back will be higher.

You must be tech-savvy

Many people believe it is mandatory to be tech-savvy before you can profit from website-related businesses. That is not true.

With the advancement of internet technology, people can now build websites from scratch without possessing any coding skills.

So far, you can read and write and become a domain flipper. As part of marketing your domain portfolio, it is recommended to have a web page displaying contact information and an announcement of the domain name for sale.

Doing this is easy. You can use any drag-and-drop website builder available online to do this.

It might cost you extra as you may need to pay for hosting service. As an alternative, some registrars allow domain parking with options to earn advert revenue.

You may also list the domain names on different marketplaces for prospective buyers to see.

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