Domain names can be a solid investment. Just like investing in stocks, though, domain name purchases can also be risky. If you’re in the domain name game to make a fast dollar, this is the wrong market for you. If you want to buy a few domain names and sit tight, this might be a good way to rake in some extra money.
Calling All Psychics
There’s a lot of guesswork that goes into domain name investing. It’s not enough to purchase domain names that are currently popular. Just like a stock, coming too late to the game won’t be profitable. You have to think of the future, instead. What domain names might be profitable in the future? Is there a new product or service that may become a huge hit? Where is the future headed?
Domain names can sell for hundreds, or thousands, of dollars if the right buyer comes along. The trick is to find a domain name that someone wants to buy, and buy that name before it becomes a name that’s in demand. How can you do this?
Start With These Tips
A domain name can consist of anything from a product to a culture. But, here are some good places to begin:
- Geographic Areas
- Business Names
- Names that are Popular Now
- Generic Names
Think about things like contractor.com or oranges.com. The more generic you go, the better off you will be. Why? Research has shown that Google likes generic names, so any company selling oranges may, for example, want the oranges.com domain name. If you own that name, you can set the asking price for it. Sounds great, right? There are just a few things you have to think about first.
Legalities and Trademarks
You can’t steal the name of a company and buy that domain name. For example, you can’t buy kodak.com and make Kodak buy the name from you. Company names are trademarked, and you will be stepping in legal waters if you go that route. You also can’t purchase someone’s name.
Do you know of an emerging author? Don’t try to purchase a domain with that author’s name. This could send you directly to court as well. The other thing you have to think about is how much money you want to put into your new domain name business.
The Cost of Setting Up a Domain Portfolio
Most domain traders, or resellers, buy hundreds of domain names. This way, the chances of hitting the jackpot are higher. But, this takes some up front money. You can start with a handful of names and work your way up. This is the best way to begin. You may also decide to purchase a name from another seller if you think that a name will be big enough.
The domain name investment game is a tricky one. Sure, some people have struck it big selling names, but others (thousands) are simply sitting on websites that do nothing and are not lucrative. What do you do with hundreds of sites that aren’t lucrative?
You can turn then into content sites, set up an actual website, or try to sell that site elsewhere. You may even luck out by selling a site that’s up and running and full of great content already. In this case, you can ask a higher price. Or, you can set up a shared hosting or direct hosting website. Shared hosting and direct hosting websites can be profitable too.
Domain name selling isn’t for the faint of heart, but it’s a fun game to get into if you follow all the rules carefully.