Flip or Flop? Just How Profitable is Domain Name Flipping?

Flip or Flop? Just How Profitable is Domain Name Flipping?

Flipping domain names means buying and selling website addresses for a profit. But can it be a lucrative side hustle?

Flip or Flop? Just How Profitable is Domain Name Flipping?
Moriah Costa

Published Aug 23, 2022Updated Aug 24, 2022

NFTs

NFTs

Technology

Technology

Ethereum

Ethereum

Have you ever come up with a super great domain name for a website, only to find out that someone else already owns it? Some people make decent money by thinking up searchable and creative website names and flipping them.

If fact, some of these brandable domains can sell for thousands or even millions of dollars. It’s a bit like real estate investing, except instead of betting that the building or house you buy will turn a profit, you’re hoping someone will come along and buy your virtual property or domain.

Flipping domains is all about the characters of a website. What’s on the website doesn’t matter as much when it comes to domain names.

But how profitable is flipping domains and is it a good way to invest your money? Get your creative juices flowing as we dig into the domain name flipping business.

What is domain flipping?

Domain flipping is when you purchase valuable domain names to sell for a profit. Web domains are traded on open marketplaces like GoDaddy, so you can buy and sell them just like you would real estate. But unlike flipping a house, your real estate is virtual and doesn’t require you to take out a physical hammer and paint to redo the website and resell it. 

Domain flipping isn’t the same thing as buying a website. Domain names are simply the string of characters, known as the Domain Name System (DNS), that navigate to an address on the internet called an internet protocol (IP) address. Flipping domains is all about getting the best or most sought-after character strings. What’s on the website doesn’t matter as much when it comes to domain names since that content can easily be changed.

While domain names are largely part of the current web as we know it, NFT domain names are a similar Web3 alternative. For example, the Ethereum Name Service is used to identify wallets and contracts on the Ethereum blockchain. Just like a good domain establishes a website, NFT domain names connect blockchain usernames to crypto wallets and they could well be the future of domain flipping on NFT marketplaces like OpenSea.

opensea
OpenSea

NFTs

How to flip domain names

Selling domains is relatively straightforward. First, you need to purchase a domain name. You can find domain names on numerous sites such as GoDaddy, Bluehost, Flippa, Namecheap, and Domains.com. 

You can also buy an expired domain name, a process known as domain drop catching or domain sniping. In general, a website owner has 30-to-90-days to renew a domain name. If they don’t, you can come in and buy the domain registration. There are a few places to monitor expiring or expired domains, including NameJet, ExpiredDomains.net, and JustDropped.com.

Before flipping a domain you should do your research to make sure you're buying a quality domain name. Evaluate the potential value of the domain, such as its length, relevance, SEO value, and brandability. You might also want to check the sales prices of similar domains in the past to get an idea of how much you could make domain flipping.

Once you buy a domain, you can either hold it for a while or sell it. When you sell it, you can either keep your information public so prospective buyers can reach out to you directly about purchasing the domain, or you can create a landing page on the domain website and let users know that the domain is for sale. Alternatively, you can list it on a domain buying website like Dan.com, Sedo.com, or GoDaddy Auctions.

You can also decide if you want to flip the domain for a set price or hold a domain auction to have a bidding war. There are domain marketplaces like GoDaddy that make domain flipping easier, but they charge a commission that will eat into your domain flipping profits.

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Domains for sale on GoDaddy Auctions. 

Source: godaddy.com

Is flipping domain names profitable?

There are a few reasons why domain flipping is a popular way to make money. For one, the upstart costs of domain flipping are very low. Registering domain names can cost as little as $10 to $20 a year on popular domain providers like DreamHost, Wix, and WordPress. And expired domains or domain names purchased from resellers can cost a few cents to thousands of dollars.

Because domain flipping is private, there's very little data available about how much money domain flipping makes. The space is also competitive, so making money from domain flipping can be difficult. Some domain names can go for thousands or even millions of dollars. The amount you can make from selling domain names depends on how coveted the domain names are and how much they're bought and sold for.

Domain flipping can be lucrative—one of the most expensive domain names ever sold was Cars.com, which was valued by parent company Gannet Co. at $872 million in 2014. Another lucrative domain flipping site was Insurance.com, which sold for $35.6 million in 2010.

Another famous site, Sex.com, joined the Guinness Book of World Records for being one of the highest domain name sales in history when bankrupt-company Escom sold the domain for $13 million to Clover Holdings Ltd after originally buying it for an estimated $12 to $14 million in 2006.

More recent sales include NFTs.com and Connect.com which sold for $15 million and $10 million, respectively, in 2022.

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Source: nfts.com

Many of the most profitable domain names seem to be sex and gambling-related websites. Some domain flipping sites have been held onto for 20 years or more before being sold, and many of the most expensive domain flipping sites are sold between online businesses as opposed to retail domain investors.

The name game

The name game

Is Domain flipping overrated?

Risks and benefits of domain flipping 

One of the benefits of domain flipping is that the upfront costs are low. As mentioned previously, the main costs include fees for registering the domain and the purchase price if you bought the domain from someone else. You can also potentially make a lot of money from selling searchable and popular domain names or niche sites. The only other things you need for flipping domains is a computer and internet connection.

There is some risk with domain flipping like any type of investment. Domain investors buy what they hope is a valuable domain name, but there's no guarantee that finding a valuable domain will result in a profit. Domain flipping also requires a lot of patience as it might be years or even decades before someone decides to buy the domain name you own. And it’s a popular and crowded space, making domain flipping very competitive.

Alternatives to flipping domain names

If you’re looking for an alternative way to make money, especially with skyrocketing inflation, there are other ways to get your cash to work for you besides domain flipping. While flipping domains can be profitable for some, the competition in the area makes it harder to flip domains and make money. 

Gold

Unlike domain flipping, investing in gold is seen as both a currency and a good store of value. There are a few ways to invest in gold, from buying physical gold bars, to investing in gold stocks, and investing in a gold ETF to get exposure to gold without actually needing to own any. The most convenient places to buy gold are platforms like OneGold and Hard Assets Alliance which enable you to own physical gold without the hassel of transporting or storing it.

Cloud mining

Another alternative to domain flipping is cloud mining. Crypto mining is essential for proof of work blockchains like Ethereum (at least until the merge), but it requires a lot of expensive hardware. With cloud mining, users can earn crypto without the overhead expenses of buying all the computers and equipment needed for a profitable mining rig. Instead, cloud mining lets you pay a company to mine Bitcoin and other cryptos on your behalf and reap all the rewards.