Make Money Online Selling Domain Names

Make Money Buying and Selling Domain Names

Rick Schwartz has made millions from trading domain names - you can almost describe himas the Warren Buffett of the domaining world ! Why ? Because he likes to buy and hold his domain name investments rather than flipping them. On his blog he explains in 12 easy steps how anyone can make a million dollars from domain names - make money from domain names.

Rick Schwartz is also a good guy! How do I know? 'Cause he left a comment on this hubpage ! The only millionaire domainer to take the time to do so.

Domain Name Sales

There are many ways to make money online - hubpages is one of them, but you can also make money just buying and selling domain names.

Top 10 Domain Name Sales so far in 2011 (prices have been quite a bit lower than in 2010)

1. Social.com $2,600,000
2. DomainName.com $1,000,000
3. Aktien.de (German for 'stocks) $725,000
4. VU.com $700,000
4. RunningShoes.com $700,000
6. Answer.com $550,000
7. 11.com $525,000
8. Puzzle.com $500,000
8. GamesForGirls.com $500,000
8. Gay.xxx $500,000

FINAL UPDATE FOR 2010 - these were the top 10 best domain name sales for 2010

1. Sex.com - $13,000,000
2. Slots.com - $5,500,000
3. Dating.com - $1,750,000
4. Photo.com - $1,250,000
5. Flying.com - $1,100,000
6. Zip.com - $1,058,830
7. Poker.org - $1,000,000
8. Credit.fr - $851,875
9. Guns.com - $800,000
10. Ringtones.com - $750,000

As you can see, they were all one-word domain names and 8 of them were .coms and they show an increase compared to 2009 of about 30% - $17.6 million for 2009 compared to $27.6 million for 2010 (very rough calculations) - so there is a lot of money to be made online from domain names, although less in 2011 than in previous years !

The top non one-word domain name in 2010 was HomeOwnersInsurance.com at $570K

UPDATE 5 : Slots.com has been overtaken by you know what /com as the highest selling domain name so far this year - see list below

UPDATE 4 : July 13 - Here are some recent domain name sales (not mine !) via Sedo.

• 027.com $100,000
• PengYou.com $100,000
• PengYou.net $100,000
• ChinaVision $75,000
• TVs.co.uk £51,000
• KnowYourOptions.com $50,000
• VideoDating.com $50,000
• Rage.com $49,999
• 363.com $41,000
• Boxing.net $15,000

UPDATE 3 : There is a new No. 1 domain name sale in June 2010 so I have changed to the top 5 to the top 6 ! Slots.com has just come in at No. 1 way ahead of the No. 2 and in fact $400K that last year's No. 1 sale Toys.com

Top 6 Domain Name Sales for 2010 so far

1. Sex.com - $13,000,000
2. Slots.com $5,500,000
3. Photo.com $1,250,000
4. Flying.com $1,100,000
5. Poker.org $1,000,000
6. Credit.fr $851,875
7. Guns.com $800,000

• For the first quarter of 2010 Sedo reports that they sold 11,942 domains (an increase of 18.6% over the previous quarter);
• Total domain sales amounted to approximately $23 million (an increase of 8% over Q4 2009, and up 36% over Q1 2009);
• .com is by far the most popular extension, representing 76% of domains sold, followed by the .net, .info, .biz and .org extensions, respectively.
• The average price of a .com domain was $2,373;
• For country extensions the .de extension was the frontrunner with 38% country extensions sold. .eu extension moved into second place at 36%, and can be attributed to the launch of new IDN domains under .eu in Q4 2009 and the beginning of Q1 2010;
• Fixed price domains surged in popularity as a result of the “Buy it Now” option, which lets customers buy a domain name immediately, without the hassle of an auction process

For the full list of sales so far this year see DNJournal - the top domain name sale in 2009 was TOYS.COM for $5,100,000 - so as you can see there is big money in domain names !]

I just wrote a hub about saving money when registering a domain name by using coupon codes and it made me think again about how to make money online from trading domain names. Domain names are big money and there are plenty of people who have made many many millions just from selling the portfolio of domain names they acquired over the years. The names that spring to mind are Kevin Ham, Rick Schwartz, Franck Schilling but there are many more.

The basic idea of trading domain names is that you buy a domain name, hold it for a while (during which time you may develop a website around the name or you may just leave it gathering virtual dust or real money from ads. on a page) and then sell it on for a huge profit.

Make Money Online from Domain Names - the Reality

That is the dream of course, the reality is a bit different. You can easily end up with a few hundred domain names that will cost you around $10 at least each to renew each year, so a few hundred times $10 is a few thousand. That is how much it will cost you each year to renew your few hundred domain names.

Then, when you try to sell your cherished domain names people will either just ignore you or tell you know your names are rubbish and not even worth the $10 you paid for them. You try to submit them to domain name auctions only to have them rejected as not being good enough, even though the same domain name auction houses are selling total rubbish domain names for $10,000 each. This is where you figure that it is all a 'closed shop' open only to insiders and friends of a friend or members of the 'family'.

You may also discover that just by submitting your domain name to an auction, the auctioneer automatically gains the right to 20% of any amount that you eventually sell your domain name for, even if they refuse the name and you sell it yourself via another site. Yes, such clauses do exist ! So take care and read carefully any small print before even thinking about submitting your names to anyone to sell on your behalf.

But even though I have never been able to really make money online from my domain names, I still own a few that I keep renewing and I have even started to develop some of them into mini-sites - see Netbooks for a fine example. The aim is to one day actually get more active in domaining and sell some of my names for BIG money !

What is BIG money in the domain names business ? Well so far this year (2009) the two biggest sales have been Toys.com for $5.1 million and Candy.com for $3 million. Smaller sales have been Forums.com for $400K and Mouse.com for $125K and FineWatches.com for $40K. These are just a few examples there are many thousands of domain sales every year for a few thousands dollars each. To see a list of domain sales check out dnjournal.com

A few years ago Rick Schwartz had a domain name called iReport.com. How much was it worth ? Well, how long is a piece of string ? Two years ago he sold iReport.com to CNN for $750,000 so clearly beauty is in the I of the beholder.

How does he get such high prices for his domain? First, he understands the difference between good names and rubbish. Second, when people contact him to buy his names his first reaction is to be rude to drive away the tire kickers (98% I think he said). Third, he says 'no thank you' a lot to offers that potential domain name buyers make. If people are really interested in buying the name they will come back, if they aren't then they won't and he has saved himself some time. So he just keeps saying 'no' until they reach the price he is willing to sell at. See how easy it is !

That is what is so fascinating about domain names. Anybody can register any name and hope that one day it takes on a life all of its own ! How much is Youtube.com worth today and how much was it worth when it was registered for the first time ?

If you are thinking that maybe buying and selling domain names sounds like a good idea then here are a few words of warning - a) steer clear of anything that relates to anybody else's trademarks, you will probably just cause yourself a lot of trouble b) go for dotcoms, they are worth a lot more than all the other extensions (ten times more at least) c) it is very unlikely that you will be able to register a one-word dotcom as they were all registered long ago, but you might be able to come up with a good two-word dotcom d) don't bother with three-word dotcoms they are worth a lot less than two-word names e) consider real-estate names, especially for places that don't really exist yet i.e. new developments and new cities that are being built but that very few people have heard of.

Here are a few more words of advice from domain name expert (i.e. he made a lot of money from it) Michael Berkens from TheDomains.com - "If you’re selling your domains try several channels, SnapNames.com, Sedo, the Domain Distribution Network, NameMedia’s network (BuyDomains and the AfternicDLS), Bido.com, domain show auctions. Try different strategies. Some will work and some won’t. Sometimes you’re going to win and sometimes you’re going to lose. If you don’t try different avenues and sit tight you are going to really lose. Remember when it comes to monetization or sales, not every solution fits every domain," Berkens added.

For more information about how to make money online from domain names you can check out - DNjournal - thedomains.com and this very splendid post about making money from domaining and probably the most famous domain name millionaire of all Kevin Ham

For information on domaining from the experts see Rick Schwartz and Frank Schilling