How To Make Money With Domain Flipping – A Unique Side Hustle Idea
Did you know that after Q1 of 2019, there were over 350 million domain names registered in the world, and that domain registration rates have grown by 5.4% year over year?
The internet is an incredible place, and every day, thousands of domain names are bought and sold at auction in the world of cyber real estate. It's truly remarkable if you think about it.
Additionally, if you have a bit of know-how and patience, it's even possible to make money by buying and selling domain names.
If you're looking to learn more about this unique way to make money online and how to flip domain names for profit, read on!
What is Domain Flipping?
Domain flipping is a money making method that involves purchasing domain names and then reselling the names for a profit.
You may have heard of people who flip houses as a side hustle. Well, domain flipping is basically the real estate game of the internet.
A lot of guides assert that domain flipping is a quick game, but this isn’t necessarily true. Some domains can remain for sale for a number of months/years before the holder makes a profit, whereas some flips quickly.
Additionally, like the real estate market, domain names can carry a hefty price tag.
Check out this list from GoDaddy on the most expensive domain names ever sold:
This list also omits the sale of Cars.com, which allegedly sold for $872 million dollars based on SEC filings.
As you can see, people don't mess around when it comes to purchasing the perfect domain name for their website or business!
What Makes a Domain Name Profitable?
If you look at the above list, you’ll also notice a commonality among these valuable domain names: they are mostly single word domains or short letter phrases.
This is a common trend across pretty much any niche or industry when it comes to domain name value.
Some characteristics of valuable domain names include:
Length: 3-4 letter domain names are inherently valuable because it is impossible to register more of these domain names, and many of these domains can serve as exact matches for brands or companies.
Age and Authority: Aged domains typically have greater domain authority due to their age and the potential they’ve had for gaining backlinks over the years.
Brand-Ability: zyxq.com or some random 4 letter combination isn’t the easiest domain to transform into a brand…privatejet.com or aaa.com on the other hand have potential.
Domain Extension: .com domains are the most valuable domains around, but .org, .net, and some newer extensions like .io are still capable of putting up some impressive valuations.
Considering these value-adding factors is one of the most important parts of successfully flipping domain names.
The nature of what potentially makes a domain valuable also leads to 2 main domain flipping strategies: topic based domain buying, and exclusivity based domain buying.
In other words, domains are either considered valuable if they are excellent names for a topic/niche/business or because they are rare/impossible to register again (like 3-4 letter combos).
Here are some examples of each domain flipping tactic:
In his interview with Domain Sherpa, expert domain flipper Ali Zandi outlines some of his first successful domain name flips, which included:
- BackupMac.com
- CupcakeFrosting
- ExoticCarAuction
- NearestRestaurant.com
- Flipped.net
Zandi also reached over $400,000 in sales after 7 months of domain flipping based on Flippa transaction records, reaching the title of Super Seller on Flippa.
As you can see, none of these flips involved profiting from extremely rare, 3-4 letter combo domains. However, flippers like Steven McDonald and others aren’t afraid to go down that path.
Take a look at some domain flipping results mentioned in this Forbes article:
- qsd.com – purchased for $620, sold for $12,000.
- npt.com – sold for unknown amount
- cjz.com – sold for unknown amount
- cpc.com – sold for $202,000
So, as we can see, there is money to be made in the rare domain name sphere as well.
How to Start Domain Flipping – Finding Expired Domain Names
The sheer size of the internet has created a very saturated domain marketplace in which it is practically impossible to register 3-4 letter combos, single word, or even popular double word domain names.
So, if you want to go the route of flipping rare domain names that will have inherent value off the bat, you usually have to buy expired domain names.
There are a number of marketplaces where you can find expired domain names and acquire them. However, unlike the guy who managed to buy Google.com for a minute, expired domain names rarely fall into your lap.
Expired domains start out as domains that are not going to be renewed. This happens frequently as people forget to renew their domain names or don’t want to spend the money.
When this happens, the domain registrar will grant a 30 day period in which the owner can still renew their domain.
Following this period, the domain name becomes ‘expired’ and is then entered into auction by the domain registrar.
Bidding typically lasts 7 days, and the highest bid wins. It’s as simple as that.
Extra Reading – The Best Items To Flip.
What to Look for When Buying Expired Domains
While domain rarity and appeal are subjective metrics you should consider, they don’t tell the entire story of a domain.
Here are a few key factors to consider when buying an expired domain name:
Domain Authority (DA) and Page Authority (PA)
Domain Authority is a SEO metric that was developed by Moz.
DA is meant to estimate how effectively a website can rank on search engines, and grants domains a value between 1-100 (with 100 being the best score).
Domain authority is a metric that evaluates an entire website, whereas Page Authority is page specific.
Age can have an influence on these metrics (the longer a website exists, the more chances there are to establish backlinks, social signals, trust, etc.) but age is NOT the entire picture.
You shouldn’t buy a domain just because it is 3 letters and 15 years old…do your homework!
You can research domain authority and page authority metrics by using the Link Explorer feature on Moz.com:
Backlinks
As I mentioned, buying expired domain names is a popular tactic webmasters use when launching a new website because of the existing backlinks old domains can carry. However, not all expired domains possess a high number of backlinks, and total backlink count doesn’t mean squat if the links are of terrible quality.
When examining a potential expired domain to flip, you need to dig into the backlink/SEO profile of the domain.
2 main warning signs include:
- A high number of spammy backlinks.
- A suspiciously high number of backlinks from some related niche websites that are low quality. In my opinion, this could be an indicator that the domain name was using a Private Blog Network (PBN) service or their own PBN to boost their authority.
You can pay for a research tool liks Semrush, Ahrefs, or many other popular choices to check backlink quality, or you can use a combination of the free ones to get a general sense of backlink quality.
History
While domain names like BestSUVs.com have probably only been used for car related websites, 3-4 letter domain names could have been used for anything.
Even if you are buying a domain name that is obviously for a niche/industry, you should investigate what else has used that domain name.
To check the history of a website, use Archive.org. Archive.org allows you to research 333 billion records of web pages that have been saved throughout the years.
For aged/rare domain names, you might find quite an extensive history:
Learning more about an expiring domain's history can prove vital for the final part of your domain vetting process!
Check for a Google Ban or Adsense Ban
Many webmasters buy expired domains to start an authoritative niche website or add to their PBN because expired domains can carry authority.
However, if the domain name has been banned from Google Adsense or Google in general, this would be a complete turnoff for any potential investors you’d be trying to flip the domain over to.
To check an expired domain’s ban history, use:
- isbanned.com – for finding potential Google search engine bans.
- bannedcheck.com – for finding possible AdSense bans.
Where to Find and Buy Expired Domain Names or Other Domain Names
There are dozens of popular websites out there where expired domain auctions occur, and I’m going to share some brief information on each one.
DomCop
DomCop is a frequently referenced platform domain flippers use for research.
For $56/month, you are able to view an extensive database of expiring domains that includes relevant metrics such as DA/PA, backlinks, Trust Flow (a Majestic Metric), domain age, Ahrefs information, and more:
You can also use DomCop to research dropped domains (these are domains that have been deleted from the domain registry and are available for anyone to buy through backorders or a drop catching service)…this is essentially buying an ‘expired' domain, not an ‘expiring' domain.
ExpiredDomains
On ExpiredDomains, you can either buy expired domains on backorder, or simply register a deleted domain name just like you would register a fresh domain name (with a service like GoDaddy or SiteGround):
Both the expired domain and deleted domain section provide some handy domain metrics to consider:
The metrics are slightly different than DomCop, and include information such as total backlink count, backlink count from unique webpages, domain DNS status, and number of related domain names.
Ultimately, you'd want to do more research on a potential domain name to flip beyond just looking at these metrics, but this is still a decent start.
Besides, once you can register for free!
Domain Hunter Gatherer
Domain Hunter Gatherer is somewhat unique in the world of domain flipping because it is a software service, not a website.
Now, the free version of DHG is just an auction scraper.
This is nice because it can allow novice domain flippers (like myself) to research what domain names are hot on the market, what value these domain names have, and how the marketplace functions.
DHG also provides current bid data, bid end dates, domain age, buy-it-now pricing (if available), and useful metrics like DA/PA, social shares, Tust Flow, and Alexa/SEM/Ahrefs stats:
Searching via keyword to find niche-specific expired domains is also easy with DHG.
Ultimately, I think this free domain hunting tool offers a great way to start buying and selling domains if you are a beginner.
Other Domain Research Tools:
There are dozens of other free and premium websites/tools you can use to research and buy expiring/expired domains.
Some popular options include:
- Domainhole.com: A freemium tool that offers a handy solution to search for domains using keywords and relevant filters.
- Dropcatch.com: A simple way to get in on expired domain auctions or backorder domains.
- JustDropped.com: Find deleted domain names.
Is Domain Flipping Profitable?
If you registered fridge.com or computer.com 15 years ago, this obviously isn't a question that's hard to answer. However, a valuable asset isn't a guaranteed flipping opportunity.
Additionally, the world of domain flipping has a steep learning curve, is immensely competitive, and can require years of patience to finally make a successful flip.
To give a glimpse of some successful and unsuccessful domain name flips, I'll provide 2 historical references.
Example 1 – VReu.com sold for $605:
Here’s an example of what I think is 1 successful flipper selling a domain name to another flipper.
VReu.com is a 4 letter, aged domain that also asserts authority in the European virtual reality market. This website was purchased 41 days ago but still has no active website (it just redirects to a Flippa landing page).
Therefore, I assume the new owner of this domain is just going to hold on to this domain name until some European virtual reality company decides to pay a few thousand dollars for it.
Virtual reality technology is continuing to grow, so betting on an increase in demand on this domain name seems like a decent idea.
As for the seller of VReu.com, he probably made a nice profit judging by his Flippa records and current listing that are also receiving bids and attention:
Clearly this guy is used to domain flipping seeing as he has grossed over $21,000 from flipping websites.
I think this example provides a general idea of the marketplace…
A guy buys a domain name that has some potential, and he flips it for a profit to someone else, who either builds a website off of the domain name or just flips it to the next person.
And so, the earth keeps spinning.
I mean, sometimes it can take years – check out this flip on zoma.com:
Zoma.com was purchased for $1,510 in 2006, and then sold for $11,200 earlier this year!
I don’t know if the domain name unofficially changed hands between 2006 and 2018 or if a single owner was holding onto the domain, but in any case, that’s a $10,000 gain over 12 years.
That’s a far better return than if that $1,500 had sat in an index fund at 7% annual return for 12 years…although the risk is far higher.
That's another flipping success story, but what happens when that second buyer never comes to the table?
Example 2 – yig.com:
Yig.com was a quick domain flipping attempt gone wrong:
Yig.com was sold on July 3rd, 2017 for $16,000…after it was purchased 4 months earlier for $20,500:
Yig.com is currently the domain name for a yacht and luxury property group, so it seems this specific domain has reached the end of its flipping days for the time being.
I assume the owner of Yig.com had a sudden need for cash to accept this sort of domain flipping loss, but this does show that domain flipping isn’t a get rich quick endeavor.
In fact, I am almost certain that most people will lose money on the first few attempts.
Domain flipping is NOT a get rich quick business. For most people, it probably isn't a get rich slowly business either.
If you really want to get started with domain flipping, start out slow and small. You don't need to buy $1,000's of dollars worth of domain names from the get go or invest in premium domain hunting tools.
Just stick to the free tools, and keep things simple.
If you read the Ali Zandi interview I mentioned earlier, you'll see that's exactly what Zandi did.
He started out slowly, purchased 10 relatively cheap domains, and he didn't continue the side hustle until those 10 domains sold for profit.
I think that setting hard limits for your own budget, auction ceiling, and how fast you want to make money is very important to do before you even start domain flipping.
Extra Reading – Read our Flippa review to learn more about this leading marketplace!
Final Thoughts on Domain Flipping
You can get rich by domain flipping, but you can also lose a lot of your money (and this is more likely to be the case). Like any risky investment opportunity, you should never risk more money than you can afford to lose, and you must always do your homework.
I also encourage you to read more guides on domain flipping, interviews, and general info/terminology in the industry before getting started.
I've just scratched the surface on how to flip domain names, but this side hustle isn't an exact science that can be summarized in a single post. However, if you're willing to work and take some risks, you might be able to diversify your investment portfolio with a bit of internet real estate!
