Domain Flipping: Don’t Quit Your Day Job
When I started buying domain names, way back in July of 1999, the term domain flipping hadn’t yet been coined. Well, maybe it had, but I sure didn’t know about it. Prior to July 1999, there was one place to
purchase domain names and they sucked then just as they do today. (No
point in naming names as that’s not the reason for this article. Ok, I
will name names: Network Solutions)
Let’s start with some domain name basics before we jump into what a name is worth.
A domain name is made up of two parts. The SLD and the TLD. The SLD
is what’s to the left of the dot and the TLD is to the right.
e.g., Wealthybloggers is the SLD and .COM is the TLD.
There was a time when it was “worth something” to have a domain that was filled with on-topic keywords.
It’s been years since search engines relied on the keywordedness of a SLD. Google and the others place very little weight on the number of keywords you can stuff into your name. This is why a name like
WoodFloorsRefinishingCITY_NAME.com has no value. (As it turns out,
there is only one domain name that has used this arrangement of terms:
WoodFloorsRefinishingSanDiego.com which redirects to
So tip #1: Don’t buy lame domain names that are loaded with keywords IF
you’re doing it because you think it adds value. It doesn’t.
Before we get into flipping let’s cover what constitutes a good name.
1) It’s easy to spell
2) It’s memorable (clever and/or has an obvious order to it)
3) It’s short (also making it easy to remember)
When to use hyphens: Try to never use them. BUT… if you should want to write a blog to make kids laugh, this domain would be much better
with a hyphen in it: Childrenslaughter.com There are plenty of
accidentally bad domain names. Google it if you’re in the mood for a chuckle.
So try to avoid hyphens. Imagine you will one day be on a radio show
and will need to give your website address to the listening audience.
Now imagine everyone listening is on the freeway, at rush hour. If you need to spell it out
“My website is R E A D hyphen B L E U hyphen C H E E S E dot com”
…this would mean you picked a lame one.
When you’re starting a new venture, it’s good to begin with the domain name first. I’ve heard plenty of stories where a brand was created
without securing that chunk of the intellectual property. Use a tool
like ZFBOT.COM to see what’s available before you start designing logos.
The Value of a Domain Name
There are a few ways a domain name is valuable.
1) It’s intrinsic value e.g., Any three letter SLD. ABC.COM,
Regardless of what’s on those domains, they are worth plenty. Even
though a name like AYZ.COM means nothing, it has value because it’s short. All 3 letter domains are taken, at least the ones with decent
TLDs. Two letter domains, even better: MM.com was sold for $1.2
million last year. 37.com: $1,960,800
2) Single Word Domains e.g., HOMES.COM, HOTELS.COM, CARS.COM … These are also known as Premium Domains. Cameras.com went for $1.5M, Dating.com sold for $1.7M a few years ago. Insurance.com: $35 million.
3) Traffic – A domain name can become valuable after it’s been branded.
e.g., In September of 1997, you could have purchased GOOGLE.COM for $30. Today, that domain can’t really be appraised because of the assets behind it.
Today there are plenty of sellers hoping to cash-in just by having the G-word somewhere in their SLDs:
Keep in mind, the amounts above is what they are asking. This is not
the value of the name. The true value is established after it sells.
But just like in real estate, a good way to know what a name might be worth is to search for comparables.
If you plan to get into the domain name business, do your homework.
Below is a list of domain names that were purchased for resale. These
are all flippers, just over 34,000 of them. This is an inventory that
would cost about $275,000 per year, just to hold the names.
Based on my experience, I would say there is no name in this list that’s worth
more than about $300. Most would appraise at $0. Just to maintain
these names, assuming an average selling price
of $150, you would need to sell about 40 per month. That’s your
break-even. That would be a tough sales job.
There are better ways to make money with domain names. On the topic of
flipping them: Don’t quit your day job.