Is making a profit selling domains name something you’re interested in?
Then there’s no reason for you to sit on the fence because it can be very easy as long as you approach this entrepreneurial option with a clear plan of action.
Many domain owners drastically under-estimate the value of their asset and sell it for a lower price than what they could ask for. This is simply because they are unaware of:
- How to properly assess the price of their domain.
- How to get the most money for their asset.
Making a profit from the sale of your domain name is something easily attainable.
Here I will walk you through the process of selling a domain name and ensuring that you receive a fair price for it.
The Art of Reselling a Domain Name
Contrary to what some so-called experts may tell you, it may take some time to sell your domain.
So, you shouldn’t be discouraged if no one is interested at first, it’s all a normal part of the process. Finding a good buyer for your domain name is crucial, so putting some time and effort in it is worth it.
Imagine for a minute that there are two individuals interested in your domain:
- One of them only cares about securing an attractive domain name without paying too much.
- The other one is interested in acquiring the domain for a very particular purpose, such as the development of a brand or website.
Who would you rather have as a buyer for your asset?
It’s safe to assume that the second buyer would be your top choice, the reason being that if he or she has a specific use for it in mind, there’s a higher chance they’d be willing to pay more for it, whereas the first individual is only concerned with finding the best bargain.
Having said that, it is time to delve into the steps I take to ensure I sell a domain name to the best possible buyer.
First Step: Assess How Much Your Domain Can Be Sold For
Knowing the value of your domain is essential before offering it for sale.
Listing a domain for sale without first determining its true market value is the most common mistake most sellers make, which leads to unrealistic pricing (sometimes too high or too low)
Ask yourself these questions in order to assess your domain’s worth.
Is The Domain Pulling Organic Traffic?
This is a key factor at the time of valuing a domain, because traffic means immediate possibilities and therefore an uptick in pricing.
A domain’s value increases for the new owner if it already has an established user base. They can start using that traffic right away to rapidly build up their site and their own audience.
It’s challenging to get a website off the ground with no traffic, so the price you pay for a domain with visitors coming in will reflect this reality.
Does the Asset Come with a Strong Link Profile?
It takes a lot of money to get quality backlinks and increase a domain’s authority and overall metrics, which is key to rank in the search engines. Building good strong links can set you back a $200 or more per link (depending on quality), so if a domain already has a few good backlinks, it’s price will be considerably higher as a result.
Examine the number of high-quality inbound links to your site and assign a monetary value to each one based on the estimated cost of hiring a link-building service.
You may then use this information to calculate how much your domain is worth based on its existing link profile.
Is Your TLD a Commonly Used One?
The TLD (top-level domain) of a domain name is a major factor when it comes to determining a price.
Extension such as “.com” are examples of top-level domains, which are the final segment of a full domain name. The most popular TLDs are .com, .net and .io, among others, hence these extensions hold the highest profit potential.
The value of your domain will be lower or higher depending on the level of popularity of the TLD you choose.
By a wide margin, .com is the most used extension, so usually these domains will be worth more than other TLDs, but it is possible that in the future new domain extensions will increase in value depending on market trends and popularity.
Can You Build a Brand Around Your Domain?
How “brandable” your domain name is might be hard to pin down. But even if a domain cannot be generally considered as brandable, it is still possible it will have that quality in the eyes of a specific individual or company thus having more value for them.
A domain’s brandability is usually correlated to some basic factors:
- Is it easy to understand?
- Is it simple, short, and unambiguous?
- Is it catchy, something people can easily remember?
The presence of these three characteristics will usually mean that the domain name you have does qualify as a brandable asset, which in turn will give it a higher chance of pulling a higher price.
What Kind of Market Are You Targeting with Your Domain Name?
Targeted niche domains typically sell for much more money than domains with no topical focus.
If your domain caters to a very particular audience, they will likely sell for a high price.
Examples of this are one- or two-word domains with high commercial value, such as:
- healthinsurance.com – Sold for $8,133,000
- connect.com – Sold for $10,000,000
- creditcards.com – Sold for $2,750,000
Each of these domain names is instantly recognizable and convey essential information about the associated product or service they intend to promote.
Make sure the asking price is representative of the value of your domain’s niche relevance and overall brandablity.
Does Your Domain Match a Searched Keyword?
Check to see if your domain is an EMD (exact match domain), meaning that your domain name is also a keyword that receives a respectable number of monthly searches.
If that is the case, this will help increase your organic search rankings and make your website more visible on the web faster.
Also, if you are doing paid search advertising, having your domain name match a keyword can result in higher click-through rates and lower cost-per-click amounts.
All these benefits will increase the value of your domain.
You can use various online tools, such as Google AdWords Keyword Planner and Ubersuggest, to determine how many searches a keyword receives each month.
If these questions rendered positive answers, then congratulations, you have a gem in your hands that can be sold for a hefty price.
Second Step: Set A Price in Line with Your Domain Name’s Attributes.
At this point you know how to go through the valuation process of your domain, which means you are ready to set an appropriate asking price.
Consider all the attributes that you discovered in your research and use them to determine a price that is both reasonable and will attract interested buyers.
However, it is best to set an initial price that is slightly above the amount you are willing to accept so that there is room for negotiation.
One thing I always like to do when trying to sell a domain is research the going rate for similarly themed assets, as this will make the price more market friendly.
Finding out what people are paying for comparable domains can give you a good idea of how much yours is worth.
To that end I recommend you have a look at what GoDaddy’s appraisal tool has to say.
GoDaddy’s algorithm considers machine learning and actual sales data for related domains to provide an estimated price, so while this will not provide you with a foolproof value, it will certainly give you a useful reference to consider.
This means that you cannot go on GoDaddy’s appraisal alone, so you’ll need to supplement Godaddy’s valuation some other important factors not considered by the tool (as per what we learned in the first step of the process):
- Domain’s backlink profile
- Domain’s actual or potential revenue streams
- Domain’s organic traffic
Using Godaddy’s suggested price alone will likely result in a significant undervaluation of your domain, so it is key to take your research beyond this automated reference.
It will now be a lot easier to settle on the right price and move to the next step of the process.
Third Step: Promote the Sale of Your Domain
If you don’t put your domain out there for sale, nobody will buy it.
Listing it in the right places is essential for success. Get as much attention to your sale as possible by following these guidelines.
Make Sure You Have A Dedicated Landing Page Saying Your Domain Is For Sale
A potential purchaser will likely check its availability by typing your domain into their browser.
Having a landing page set up for people to reach it when they look for your domain is a fantastic way to bring in new leads.
Don’t forget to highlight all the features that make your domain stand out, such as traffic, backlinks, SEO friendliness, branding potential and others.
For your domain to be seen as more valuable by potential buyers, you must emphasize its advantages.
List Your Domain On The Major Marketplaces
You shouldn’t put all your hopes on a single buyer when trying to unload your domain name.
Domain marketplaces are where most people begin their hunt for a great domain name. Domain registration on a well-known domain marketplace is a smart move.
I personally love GoDaddy’s auction marketplace as it definitely brings the highest number of buyers over any other, but you can also try other options such as Afternic, Dynadot, Sedo or NameCheap.
With some of these marketplaces, you can use either domain listings or direct sales via a landing page.
You never know who might stumble across your domain on a domain listing site and decide to make an offer after reading about it on your landing page.
Simply put, you need to go where the buyers are.
GoDaddy Auctions Marketplace
The use of online auctions is a fantastic strategy for attracting buyers to your domain name.
The auction model encourages numerous interested parties to submit bids. It’s a lot simpler to sell once there’s some interest in it.
To avoid selling your domain for a price lower than its worth, you set up a minimum acceptable bid or a reserve price that you feel comfortable with, that way, any bids that come in will be in line with your expectations.
GoDaddy will deduct a fee from the final sale price, but the exposure and benefit far outweigh the costs.
Fourth Step: Advertise Your Domain to Potential Buyers
Once you have had your domain up for sale for a while a buyer will come along showing interest.
You shouldn’t immediately sell your domain to the first interested party. Make sure they are trustworthy and have the funds available to buy it right away.
Make sure that the buyer:
- Is making an offer for a price that is in line with your expectations
- Has a legitimate interest in your domain
- Is ready to make a payment
In the past, I’ve had prospective buyers say they need a few days to secure the funds for the domain but that they’re still very interested in it.
This is a big no for me, because domains should never be held in a limbo while waiting for payment. Time is money and every lost opportunity is one too many.
Be wary of anyone who approaches you immediately after seeing your domain showing interest but asking no questions about it, especially when dealing with high-priced assets.
Theft and fraud involving domain names are a real problem, so always make sure you’re dealing with a reliable buyer by filtering out prospects that do not really present a legitimate interest in your domain.
Fifth Step: Complete The Transaction With The Help Of An Escrow
Using an escrow service to collect payment for your domain is a foolproof way to prevent fraud.
In the middle of the transaction, an escrow agent acts as a neutral third party, much like a broker.
When the escrow service receives payment, they will notify you and then release it to you when the domain has been transferred, based on the terms agreed for the sale.
The escrow company will have all the details of this agreement and can help resolve any issues that may arise if one of the parties fails to fulfill their obligations. When buying or selling a domain name, most marketplaces will use their own built-in escrow service. If this is the case, they will deal with all aspects of the sales process on your behalf, and you do not have to worry about dealing with payment issues.
Final Step: Transfer the Domain to The Buyer Upon Completion of Payment
Your domain can be transferred to the buyer after the escrow service confirms they have received payment.
Depending on where you sell the domain, the transfer protocol may vary a bit, but it will usually be very simple.
Transferring a domain name can take up to a week, depending on how quickly both you and the buyer respond to each other’s requests (although this is not the case for most auction marketplaces where there is no exchange between buyer and seller aside from the sale itself).
If you need help transferring your asset, your domain registration service should have information or staff available to assist you.
Once this is done, you have made it to the finish line, and you have officially completed a successful domain flip!