Turn WWW into Cash – Introduction to Domain Name Arbitration
First of all, I would like to start by saying that when it comes to the process itself, it is not difficult to make money trading domain names. It’s so easy to buy a domain name for less than $10 and resell it for $60 to $3,000 the next day! However, when it comes to market research and name selection, things get a bit hit and miss. The reason for this is that it is all speculation.
Anyway, I promised an introduction, so bear with me while I take a step back to explain a bit about what domain name arbitration really is. It is simply the initial registration or purchase of a domain name and its subsequent resale for a higher amount to an interested party. When I say ‘domain name’, I mean just the name itself, not an actual web page, although creating a web page for your domain name would increase its value. (So it’s what you type into your browser’s address bar that you’ll be selling.)
There are many domain names you can buy, under many different extensions. Some domain names are TLDs (Top Level Domains), while the rest are not. At this time, the list of TLD names includes more extensions than when it was created, but the original six are still, as a general rule, the most valuable. They are the extensions .com, .gov, .net, .mil, .edu and .org.
Selection
Essentially, what you’re doing is guessing the outcome of future events. You’re hoping to find a domain name for a current event, an upcoming movie, a rock band, or a company; what do you think will be worth it plus for someone else that your current registration price.
So what this means is that you can buy more domain names than you sell, but that does not mean that this company will not be profitable! Look at current trends to select the right domain names and consider using words that you think will be profitable later on. Until the word ‘electronic’ became a popular combination word, domain names with an ‘e’ before the name could be bought for pennies. Now, however, names like ‘e-commerce’, ‘money’ or ‘electronic banking’ can sell for upwards of $5,000.
Once you select a name, use the free resources available online to find out if the name already belongs to someone. A quick search on InstantDomainSearch will give you all the information you need.
Dirty
Prices
Until you buy and sell your first domain names, you’ll probably have trouble getting a fair price. One way to start is to check the price that similar domain names sold for. Another is to use a domain name evaluation tool or service. Many are free (such as estibot) and often part of a domain name classified site.
growing value
Three main ways to increase the value of your domain name:
- Build a website around it; sell more than just the domain name. The price will reflect not only the name, but also the time and effort that went into developing the website. Buyers are happy because a domain name with a website is better than a domain name without a Web page!
- Increase search engine results. Very simply (although the actual process is anything but simple), this means ranking higher in a search engine like Google, when someone searches for a specific term. The practice is called SEO (Search Engine Optimization) and I highly recommend studying it to anyone who wants to earn some kind of money online.
- Increase traffic to the site. This could be a combination of the two tips above, but there are other ways to increase traffic as well. It could, for example, link to your domain from traffic sources, or you could advertise it. But the point is; how much more new the more people visit the domain name you own, the more valuable it becomes, as it reduces the buyer’s workload.
list
There are a plethora of places where you can advertise and sell your domain. The main places to list your registered domain names are: domain name classified sites, auction sites, any classified you find, and even through an email to a potentially interested party. If, for example, Quebec breaks away from Canada and gets its own shiny TLD extension’
.qbe‘. If you register ‘nike.qbe’, you can sell it directly to Nike for a penny!
Moment
Like products, domain names have an expiration date. It’s usually one year, so don’t miss it. Also remember that old news doesn’t sell. So if you’re chasing trends; like movies, new releases of popular bands or events, then you have to register Y sell them Quick!
Immediately after Michael Jackson’s death, I saw domain names sold for over $30,000 after intense bidding wars on eBay! So I jumped on board, but it was too late. Three weeks had passed when I registered one of my domains and put it up for sale. My auctions received no more than 25 views, let alone bids!
So my advice is; If you’re selling a good domain name that turns out to be time sensitive, do everything you can (read ‘pay’) to get noticed. Promote it well, or you may not get the immediate exposure you need to make money.
Tips and precautions
- Be aware of how money changes. Paypal cannot protect you against a ‘chargeback’ made on a credit card. I’ve heard nasty stories of people selling their domain names, only to have the money stolen from their accounts after transferring the ownership rights! Use an escrow service; it is often part of domain name classifieds sites, although they do take a cut.
- The domain names you buy, you generally can’t sell for the first two months. Don’t be surprised. All of this means that you have to do what is called a ‘push’ (ie a transfer) to a user on the same site where you registered your domain. So, for example, if you registered your domain name with GoDaddy, for the first 2 months you can only ‘sell’ it to a user who what’s more you have an account with GoDaddy. But the accounts are free and take 2 minutes to sign up, so don’t let this little hurdle stop you from making money.
- Park your domain for profit. Even if your domain name hasn’t been sold, why not put it to good use? If it is a name that generates traffic; park! This means that instead of a blank page, anyone who enters your domain name in the address bar will be taken to a page full of advertising links; and if they are clicked, you will get a part of the earnings. Most of the time, those park pages also notify visitors that the domain name is for sale, which increases your exposure and helps you sell faster.
Thanks so much for reading. Good luck selecting and profiting from big names!