How to make money buying and selling premium domain names

Domain name is an industry on its own. But unfortunately, not many know what is happening there.

It’s a lucrative place where marketers and individuals can earn some profits when they buy and sell premium domain names.

The reason why this market is thriving is because premium domain names are in high demand by business owners, investors and organizations.

In this article, we will give you an exhaustive and comprehensive guide on how to buy and sell premium domain names for huge profitability.

What are premium domain names?

High-quality domain names that have already been registered but are available on the market at a higher valuation are known as premium domain names. A domain name is deemed high quality if it is shorter, often searched, closely related to the service or business in question, and usually ends in a TLD like .com,.net, or.org. Such domains are more intuitive, simpler to recall, and easier to spell. A premium domain name is something like love.com, for instance.

Depending on the demand for these premium domain names, they can be sold at a very staggering amount. 

Let’s say you bought a premium domain name for a thousand dollars. That domain name can be sold within the space of a year for about thirteen thousand dollars.

This tells you how lucrative this business is, and why you must pay keen interest in it.

Criteria for determining a premium domain name

The list of domains that will be premium is not well defined. This choice is entirely up to the registry’s judgment. The person who owns an existing domain and the price range at which bidders are prepared to settle on whether or not it will be considered premium. Nonetheless, a premium domain can be distinguished from the competition by a few criteria. They can assist you in determining if the amount you are required to pay is fair.

1. Length

A name that is as brief as feasible is preferred. All 2- and 3-letter domains are typically considered premium since they are frequently utilised for acronyms by businesses, however longer domains can also have value. Still, the majority of good domains are usually no longer than a few words.

2. Control the Flow of Traffic

A website may see an increase in organic traffic with a good domain name. Carpenter.store is an expensive premium domain name that has a new generic top-level domain (TLD) that is far more expensive than a typical store domain.

The new TLDs give website owners the option to obtain a short, one-word name for direct traffic because the short domains in the former TLDs were long taken. On the other hand, names are normally more expensive because many people usually append “.com” after the term they are looking for.

3. Brandability

This has nothing to do with length. Even if the domain is longer, it can command a higher price if it can be used as a brand name.

4. SEO

Most times, the proper domain will match the exact word that people type into search engines. It also has the option of including one or more keywords. Exact search words are usually more expensive.

5. The desire to buy

Even though a domain name doesn’t look very appealing at first, it can soon become a premium domain if it is put up for auction and big bids are placed. When a newly founded company wants to purchase an existing domain that matches its name or the name of one of its goods or services, this is usually the scenario.

6. Investment Potential

Like real estate, premium domains can appreciate over time, especially when aligned with industry trends.

How to research and identify premium domain names

1. Keyword research 

The first step to researching for good premium domain names is to use keyword research. You can use tools like SEMrush and Google Keyword Planner to help you get hot and high-in-demand keywords in several industries.

Those domain names that relate to things that are trending, like AI, NFT, cryptocurrencies, EV, etc are often priced very high.

2. Industry trends 

Another way to do proper research for a premium domain name is by keeping your eyes constantly on what is happening in various industries. For example, when blockchain technology became popular, domain names like NFT and crypto became very popular and expensive.

When you monitor the News and also participate in online forums, you will become abreast with the full knowledge of which domain names to look out for.

3. Domain auctions and marketplaces 

Marketplace and domain auction sites like Sedo or GoDaddy give one the platform to buy premium domain names. When you evaluate domain names to know which to buy, you must consider the age of the domain name, the history of the domain name, and the current search engine optimization metrics. Older domain names are preferable and valuable because they have a strong backlink profile.

4. Expired domains 

Another source to look at is expired domain names. These domain names expired because the owners failed to renew them. Meaning they are available to be registered again. To know if these domain names will be profitable, you will have to check if they have an established backlink profile or a large amount of traffic. You can use tools like ExpiredDoman.net to find out if they have these characteristics.

How to buy premium domain names

Note: The best website to buy premium domain names is Flippa

1. Direct purchase 

To acquire premium domain names that sell high and fast, you may wish to contact the owner directly.  There are tools for that purpose. One of them is WHOIS. It will help you to locate the contact information of the owner.

From there you can begin your negotiations with the owner. To make things easier, you can get a domain broker to help you secure the deal.

2. Domain auctions 

When it comes to high-demand domain names, they are auctioned.  And there are platforms for it. When you decide to go through that route, you must know that it is by the highest bidder. To avoid incurring losses, you should set a budget and stick to it.

3. Backordering 

To backorder means you are placing a reservation on a domain name that might expire soon. And if the owner happens not to renew the domain name, your backorders allow you to quickly register it and acquire it. This method is important for domain names that are likely going to be premium 

4. Domain registrars

You can also get to buy domain names from domain registrars. But the downside is that these domain names could be quite expensive.

How to determine the value of domain names

1. Appraisal tools 

The most important factor when it comes to buying and selling domain names is being able to determine the value. Tools like GoDaddy and Estibot provide Appraisal platforms to get the true value of a domain name. They estimate these domain names by considering the keyword popularity and also the trends in the market. 

2. Comparable sales 

Another way to determine the value of your domain names is to look at similar domain names that have been sold recently. You can go to a website like DNjornal to take an inventory of domain names that have been sold. They will provide you with a picture of the market price, and it will enable you to understand what investors are willing to pay.

3. Brand potential 

Another factor to consider for profitability is when a domain name is easily pronounced, spelt and can easily be remembered. This is because these types of domain names can be a good option for a strong brand.

How to  sell premium domain names

Note: the best place to sell premium domains is Flippa.

1. List on marketplaces

 Having acquired a premium name, the next thing is to list it on the marketplace like Flippa or Sedo.  Also, you will need to write a very compelling description and show the value and potential that the domain name has.

Then you can set it to a “buy it now” price. This is so that it can be purchased immediately. Also, you may consider auctioning it, if you feel everyone will be bidding to buy it because of its value 

2. Auction sites 

If you’re considering auction sites, it means you are confident that your premium domain name is a high-demand one. Meaning bidders can compete for it, and the highest bidder has it.

3. Direct outreach

Sometimes, direct outreach to potential buyers is the best way to sell a premium domain. Identify businesses or individuals who could benefit from your domain and contact them with a tailored message. Highlight the domain’s brand-ability, SEO benefits, and competitive advantages.

When conducting direct outreach, craft personalized messages that explain why the domain is a perfect fit for their brand. Emphasize its potential to enhance their business and offer examples of how it could be used effectively.

Conclusion

Buying a Premium domain to sell is a profitable business that requires very sound technical knowledge. It is advisable to seek the advice of brokers and experts as a beginner. But it’s highly profitable if one can master these basics. And like every investment opportunity, you must be patient and be sure you’re sure of the facts before making any leap.