5 Requirements You Need To Profit From Domain Investing

Let’s go over this again. A domainer (i.e. a domain investor) is someone who buys or registers domain names, and later sells for a profit. While profiting from domain investing is not a sure deal, this is the primary objective of a domain investor. As with everything else, the industry has had a lot of ups and downs and 2011 appears to be promising. Profits can be made, provided you meet certain minimal conditions. These are:

Capital: Unless you are a “big gun”, not a lot, depending on how many domain names you are willing to buy and how much you are willing to pay for. You can register domain names for as little as $3 or buy “existing” domain names for a good sum of money. I would stay away from buying existing domain names (except expired domains), unless you really know what you are doing.

Hint: A small tactic that can work well is to leverage on the “grace period” of a newly registered domain name. Normally, registrars will give you a “grace period” of 120 hours or 5 days, to decide whether you want to continue with the name or not. Use this time to list the domain name in popular auction sites and see how they “move” during the first four days. If you do not get any bid, you can decide to cancel the order and register a new one (rinse and repeat).

Note that some registrars will charge you for a cancellation fee. If you do not have much initial capital to invest and don’t know how things will perform, this is a good experiment to start. It will give you some experience on how this industry works. Remember, it will cost you, so be careful. Read all the “fine” lines.

Vision: Often times, all it takes is a little “thinking” ahead or having a sharp eye for things. For example, last week, you will see many people making predictions for 2011. Chris Brogan for example made some predictions late last year for trends in 2011. In one of his assumptions, he mentions that “Cloud computing gets real”. This is not just his “theory” but rather a general conception. So, find a combination of “cloud” anything. You might hit a jackpot. Remember to focus first on .com, .net, and .org and if it is really a good one, try .in (very cheap to register $2.99).

Also, recently, .co and .in domain extensions have been made available to the general public and as an example, it is humored that .co could be a good investment for the future. Here, I provide some insights on How To Find And Sell .CO Domain Names For A Profit

Patience: A lot is required as finding good domain names is not an easy task. There are tools to assist you in finding available names. Once found, the other “not so easy” task is to sell it and this is where you should be careful when choosing the right marketplace. I highly recommend Sedo.com and AfterNic.com, although there are others out there. Just do your research and make sure they are at least BBB (Better Business Bureau) certified.

Know where to find them: Not all domain names are available. You know that already. In some cases however, you can get lucky and find “expired” domain names that are being auctioned. These “expired” domain names are normally very cheap and this is where you can find real bargains. I personally use Dynadot and GoDaddy marketplaces. Note that ICANN requires accredited registrars to “hold” expired or deleted names for 30 days, so you won’t be able to sell your domain name (affiliate link) before that period. I will talk more about “expired” domains in a separate post in the near future. For now, I just wanted you to know about this “niche” within a niche opportunity.

Not Greedy: Forget the millions that everyone is talking about, period. The idea is make a profit and fast :). Selling a domain name that cost you say $10 for $100 in days, sounds good to me, at least until you get a hold of things. So set your prices well. If it gets popular in an auction then it might (or not) take off. Just remember to set your goal and stick to it. A great resource site about everything related to domaining, is Domaining.com. Here you will find, among other things, an automated domain appraisal website that can be used as a guide to valuate your domain names.

• The above are the minimum requirements you need to successfully start your domain investing.

Misconception About Websites and Domain Names

This is probably one thing that many get confused. There is a difference between the value of a website and that of domain names. I heard a person say once that because his website is very popular and has all kinds of good metrics, that his domain name is worth a lot. True?

While this can be true when it comes to “buying” an established website with “keyword” rich domain names, it is not necessarily true for domaining. A website with a domain name of “bestblogtipsintheworld” dot whatever, can be popular and even worth a good deal of money, as a website. The domain name is worth zero. YES, a big fat zero. So remember, when investing on domains, forget websites. If you want to make profits buying and selling websites, then I suggest you read and get familiar with website flipping.

Anyway, while this may somewhat be conflicting, for domain investing, people or companies do not value a domain name because of the website. Every domain name is unique, and the ultimate value of a domain is determined by the final price that a buyer and seller agree upon.

That’s it! These are the minimum requirements you need to jump in the Domaining Industry. If you feel there is something I left behind, please let me know.