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Understanding how to sell a domain name can provide you with a fun hobby, an investment side hustle, and an incremental revenue stream.
I have bought probably over 200 domain names and have sold a handful of them.
Each sale has been a high return on investment (ROI) – in the 100%-500% range, which handily beats the stock market and even real estate.
This article describes what I’ve done a few times to sell a domain name for a profit.
How to Sell a Domain Name for a Profit
The first thing most people do when they have a new business idea is buy a domain name.
This is fun, actually. Buying a domain name provides immediate satisfaction.
You feel like you’ve accomplished something… In the short term you’ve secured your precious idea.
And, the long term you may have actually created some upside value. Because people will pay a lot of money for a great domain name.
How do you pick the best domain names to buy and then how do you sell a domain name for a profit?
Best Strategies When You Buy and Sell a Domain Name
I think whether you’re buying a domain name for your blog, for your online business, or as an investment you should think ahead.
1) The Future and Trends
If you’re thinking of domain names you could invest in that might appreciate in value, think of the future.
What trends are happening now that will probably continue and grow in the future.
In my opinion some trends that are likely to continue include a focus on human longevity, health and wellness, medical marijuana use, sustainability trends, solopreneurship and working from home, not having a “retirement”, robots replacing human jobs, artificial intelligence, etc.
What terms may come into use as a result of these trends?
For example, I believe solar energy will be widely used in the future. As such I read a fair amount about solar technology. One day I read about something called “perovskite”. I checked on GoDaddy and found that there were some domains available related to it…
I recently sold a domain related to the term “perovskite” for about a 20x return… If you are a sustainability geek, you might know that perovskite is an abundant earth mineral that has promising applications for making more efficient, and much less expensive, solar panels.
Another area where technology is fast changing and promising is in the cryptocurrency space.
What are some of the biggest problems in cryptocurrencies? Theft, fraud, technology problems, security, etc.
The way most people address the aforementioned issues is with insurance. So, it stands to reason that there might be opportunities in cryptocurrency insurance.
Apparently someone else thinks so too because the “cryptocurrencyinsurance.com” domain is on sale on GoDaddy for $95,000.
2) Dot Com Rules
Stick with .com if you can. The top domain sales in history are all .coms.
Other suffixes can sell, of course. But if you try to sell a domain name with some other top level domain (TLD), you may be in for a slog.
The highest price ever paid for a domain name was “carinsurance.com” which was purchased by a company called “Quin Street”.
3) Add Your Domain to the GoDaddy Aftermarket
Once you have your domain name, add it to the “domain aftermarket” on GoDaddy.
There are other domain name aftermarkets, but I have only been successful in selling domains through GoDaddy.
On GoDaddy’s aftermarket you can choose between “Auction” or “Buy It Now“.
I always use “Buy It Now” because then I know what I’m going to get.
As you can see from the screenshot above, you have a few options for pricing your domain on GoDaddy.
- Buy It Now – Fixed Price
- Buy It Now – Make offer or Buy It Now
With “Buy It Now” you can also allow people to make offers above a certain price that is below the “Buy It Now” price. For instance, if you have a “Buy It Now” price of $5,000, you can say you will accept bids from $3,000-$5,000, or any range that you want.
You don’t have to accept any of the offers that you get… You can decline them or ignore them or accept them.
Regardless, the one downside of GoDaddy is that they take a healthy piece of the sale. The commission that you give to GoDaddy ranges based on the ultimate sale of the domain.
I believe at a minimum it is 20%.
4) Create a Free Website and Use Forwarding
Use a site like Strikingly, Wix or Weebly to create a free website for your domain.
You can set up a single page site using one of these services in 5 minutes.
Then create a 301 redirect from your GoDaddy account (or wherever you registered your domain) to the site you just created.
For instance, if you use “Strikingly” the URL of your single page website would be yourdomainname.strikingly.com.
As I mentioned, I use GoDaddy for almost all my domains. You can usually find coupon codes for using GoDaddy that will save you up to 35% on your purchase.
5) Write Articles About Your Topic
Once you have your domain on the aftermarket and have your new free site set up, start writing blog posts about your topic. You don’t have to do this, but it helps.
The reason you should write blog posts about your topic/domain are two fold:
- You are hedging your bets in case your domain name does not sell. Having content that is optimized properly for SEO over time is a great way to create value for your online business or blog. It takes a long time to rank for certain keywords in Google. But that’s OK.
- You are educating people about the topic. Whenever you write a blog post, link from the keyword of your topic to the page on GoDaddy where the domain aftermarket registration is. This will get people thinking about the fact that the domain is for sale. They will wonder if they can do something with it. They will also worry if someone else is going to buy it.
6) Raise the Price When There’s Interest
Once you start getting interest you will likely get offers for your domain. The offers will likely be “low ball” offers. If this happens with some regularity, resist the urge to take the low ball offer. Do NOT sell right away.
Instead, do the opposite.
Raise the price of the domain. It’s easy from within GoDaddy to change the price of any domain that is listed on the site.
By raising your offer you are basically saying to the low ball buyer, pay the “Buy It Now” price while you can, because otherwise the price is going to keep going up.
Once you have an offer, and you accept it, you will use “Escrow.com” to transfer the domain to the buyer and receive the money. It takes a few days to go through this process.
You will need to verify a bank account so that you can get paid and you will have to verify that you are the owner of the domain with Escrow.com. This domain verification process is explained on GoDaddy’s website. Basically, Escrow.com and GoDaddy confirm you are the owner through a series of emails.
In the end, you’ll transfer the domain to the buyer and the money, minus GoDaddy’s commission, will show up in your account.