Make money trading domain names

Domain names can be a lucrative investment. Names such as pizza.com have sold for over £1 million.

I have a portfolio of 20 domain names and over the last 3 years have sold 4 domain names totaling almost £1000. I deal exclusively in .co.uk domain names which cost around £7 for two years (I purchase mine from 1&1). That is nothing compared to the big boys in domain trading who typically have a portfolio of thousands of domain names and make millions of pounds annually from domain sales.

There are two main steps to trading in domain names.

Step 1: Buy the right domain name.
You need to find a name that is not already taken but a name that is attractive to potential buyers. Keep up-to-date with the media for ideas, such as emerging hobbies, foods and holiday destinations. Read the dnjournal weekly domain name sales article for some inspiration (this is a compilation of the highest sales for that week).

Be careful not to buy names protected by a trademark (start by doing a search here) or that may fall foul to a passing-off claim such as the recent Wayne Rooney case. Just use your common sense really.

Step 2: Park the domain and wait for the buyer
I park my domain names at Sedo where visitors to the domain name are presented with a list of links associated with the site. When they click on a link then you earn some money per click. This is a great way to earn money from the domain. Sedo is free to join and will handle the transaction when a buyer approaches.

You may alternatively choose to develop the site to get more visitors and thus increase the value of the domain. You can still list the domain for sale on Sedo (free) even if you don't choose to park it.

The tricky part in all of this is of course finding a profitable domain name, but it is very similar in investing in shares (you need to pick the right shares!). Domain names can be much more lucrative and cost way less (£7 is unlikely to meet a broker fee).

I will keep this article updated with advice as I learn more and develop my skills in domain trading. If you have any hints and tips then please comment below.

Top Resources: DNJournal - DNForum