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Domain Name Flipping: Better In Smaller Doses

Anything manufactured, computer implemented, immaculately conceived or dreamt up overnight can be flipped for profit, as our current technologically savvy society is proving.  Domain names, content, or anything which another man, woman or child slaved tirelessly over is being forfeited for someone’s fiduciary responsibility, or personal benefit.  With domain name flipping, however, you’re entering one fierce battleground where OTSS, baby.  Only the strong survive.

Those considering entering the domain name game should, in addition to normal due diligence, perhaps begin their quest for Brewster’s millions on smaller scales.  We’ll explain why, and potential ramifications of being stuck with 700 useless WhoIs entries.

Buy In Bulk, Sell ‘Em Low

Businessmen think too high, creating entrepreneurial depression when their expectations aren’t met.  Imagine buying twelve $400 domains and trying to flip them for $600 each.  Now imagine buying 3000 domains for $9.99 and selling them for $15.00 each.  Sure, the margins seem much smaller, yet you’ll never touch the names – only register, then flip.  Buying low priced domains in bulk and upselling perhaps 20%-50% over margin works just as well, if not better, than finding one great name and attempting to pander it for 3 times its buy price.

It Must Be Brand Worthy

If domain investors wanted domains which cannot be branded, they’d register their own.  Unless you get into LLL or LLLL domain flipping, most businesses want some part of their product or service out there on Front Street, making the domain name the most obtrusive place to start.  Remember, cybersquatting is frowned upon; instead of registering Apple iPhones, you’ll probably need to concentrate on the phones facet – verbose to multimillion dollar giants like Apple – since you’ll find yourself slapped with $1M lawsuits by taking property names already trademarked.

Draw Parking Income First

Another logical choice domainers are making revolves around monetizing before flipping.  One reason why Sedo, Afternic and GoDaddy offer attractive parking incentives is because they’re already two steps ahead of your thinking. Ultimately, you’ll register your $12.99 domain name, and in several months, have earned that registration fee back with parking income.  During the process, you’ll index that domain name, perhaps grab some backlinks and increase traffic tallies.  In just one year, that $12.99 domain just increased its worth to $29.99.  Taking your proof of domain income to investors, you’ll see that perhaps they’re thinking $15.00, and you sell it.  Still came out with two bucks profit – yet multiply that by the hundreds.

Getting Stuck

You’ll often find yourself making a seemingly intelligent choice by purchasing several domain names for high dollar, thinking you’ll turn profit quickly.  What seemed excellent for you may have been someone’s ten year burden; make sure you investigate the domain, request their monetization records and anything relevant to legal action taken on that domain name. You’ll find yourself with more problems, financial loss from re-registering yearly and angst from not moving the domain fast enough unless you take your time to self-educate before flipping domain names. Like other major investments, it’s better to test domain waters in smaller doses before making purchasing decisions you’ll later regret.

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Roger Klawinksi is a domainer and freelance writer for Namefind.com where businesses can find the best brand name domains in their niches.

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