How to Start Domain Flipping – Making Money with Expired Domains

 

Discovering new ways to make money online or earn passive income is always incredibly exciting.

I want to make more money and effectively monetize my website. I also want to teach other people to do the same thing.

Since starting This Online World, I’ve covered a pretty extensive range of methods people can successfully use to generate passive income or make money online.

From freelance writing, to phone farming, I think it’s fair to say I’ve dabbled in quite a few areas.

However, the internet is a vast and exciting place, and I’m always on the lookout for new money making ideas or investment opportunities.

So, I started looking into how to start domain flipping about 2 months ago.

After hours of reading, several unsuccessful attempts at buying expired domains in an auction, and absolutely nothing to show for my progress, I figured I’d at least write a post about what I have learned so far.

Note: I have never successfully bought a domain and flipped it for a profit. I’m currently trying to buy some domain names but have not won any auctions.

However, I believe a lot of information out there on how to start domain flipping is fragmented across dozens of websites and guides.

I’d like to have a crack at summarizing the information as best as I can, and to give my 2 cents.

This post will contain:

  • What domain flipping is.
  • How to start domain flipping.
  • What makes a domain name profitable.
  • How to find expiring/expired domains.
  • Is domain flipping even profitable? 
  • Buying expired domains for your own use.

Let’s get to it!

What is Domain Flipping?

Domain flipping is a money making method that involves purchasing domain names and then reselling the names for a profit.

Flipping isn’t new. It’s an arbitrage based concept that has been around since money has existed.

You may have heard of people who flip houses as a side hustle.

Well, domain flipping is basically the real estate game of the internet.

In domain flipping, flippers look to buy domain names that either have immediate resale value or potential resale value in the future.

A lot of guides assert that domain flipping is a quick game, but this isn’t necessarily true. Some domains can remain for sale for a number of months/years before the holder makes a profit.

Additionally, like the real estate market, domain names can carry a hefty price tag.

Check out this list from GoDaddy on the most expensive domain names ever sold:

highest-domain-name-sales

This list also omits the sale of Cars.com, which allegedly sold for $872 million dollars based on SEC filings.

As you can see, people don’t mess around when it comes to purchasing the perfect domain name for their website or business.

What Makes a Domain Name Profitable?

If you look at the above list, you’ll also notice a commonality among these valuable domain names: they are single word domains or short letter phrases (with the exception of vacationrentals.com and privatejet.com).

This is a common trend across pretty much any niche or industry when it comes to domain name value.

Some characteristics of valuable domain names include:

  • Length: 3-4 letter domain names are inherently valuable because it is impossible to register more of these domain names (they’re taken), and many of these domain names can serve as exact matches for brands or companies.
  • Age and Authority: Aged domains typically have greater domain authority due to their age and the potential they’ve had for gaining backlinks over the years. This is another reason why short domain names (that were probably registered 10+ years ago) are so expensive.
  • Brand-Ability: zyxq.com or some random 4 letter combination isn’t the easiest domain to transform into a brand…privatejet.com or aaa.com on the other hand have potential and are very straightforward.
  • Domain Extension: .com domains are the most valuable domains around, but .org, .net, and some newer extensions like .io are still capable of putting up some impressive valuations.

domain-name-meme

Considering these value-adding factors is one of the most important parts of successfully flipping domain names.

The nature of what potentially makes a domain name valuable also leads to 2 main domain flipping strategies: topic based domain buying, and exclusivity based domain buying.

In other words, domains are either considered valuable (and a good flipping option) if they are excellent names for a topic/niche/business or because they are rare/impossible to register again (like 3-4 letter combos).

Here are some examples of each domain flipping tactic:

In his interview with Domain Sherpa, expert domain flipper Ali Zandi outlines some of his first successful domain name flips, which included:

  • BackupMac.com
  • CupcakeFrosting
  • ExoticCarAuction
  • NearestRestaurant.com
  • Flipped.net

Zandi also reached over $400,000 in sales after 7 months of domain flipping based on Flippa transaction records, reaching the title of Super Seller on Flippa.

As you can see, none of these flips involved profiting from extremely rare, 3-4 letter combo domains.

However, flippers like Steven McDonald and others aren’t afraid to go down that path.

Take a look at some domain flipping results mentioned in this Forbes article:

  • qsd.com – purchased for $620, sold for $12,000.
  • npt.com – sold for unknown amount
  • cjz.com – sold for unknown amount
  • cpc.com – sold for $202,000

So, as we can see, there is money to be made in the rare domain name sphere as well.

Now let’s look at how you can actually find domain names to start flipping.

How to Start Domain Flipping – Finding Expired Domain Names:

There were 326.4 million domain names registered as of 2016, with worldwide registration rates growing by roughly 11 percent every year.

The sheer size of the internet has created a very saturated domain marketplace in which it is practically impossible to register 3-4 letter combos, single word, or even popular double word domain names.

So, if you want to go the route of flipping rare domain names that will have inherent value off the bat, how do you go about it?

Well, you usually have to buy expired domain names.

There are a number of marketplaces where you can find expired domain names and acquire them.

However, unlike the guy who managed to buy Google.com for a minute, expired domain names rarely fall into your lap.

domain-name-expired-meme

It’s not like all domain names are available for $10 the split second someone forgets to register them.

Rather, expired domains start out as domains that are not going to be renewed. This happens quite frequently as people forget to renew their domain names or just don’t want to spend the money.

When this happens, the domain registrar (where the domain name was initially registered) will grant a 30 day period that the domain owner can still renew their domain.

Following this period, the domain name becomes ‘expired’ and is then entered into auction by the domain registrar.

Bidding typically lasts 7 days, and the highest bid wins. It’s as simple as that.

So, you can’t go and register aaa.com, but hey, maybe you can buy it in an expired domain auction.

What to Look for When Buying Expired Domains:

While domain rarity and appeal are subjective metrics you should consider, they don’t tell the entire story of a domain.

Here are a few key factors to consider when buying an expired domain name:

Domain Authority (DA) and Page Authority (PA):

Domain Authority is a SEO metric that was developed by Moz.

DA is meant to estimate how effectively a website can rank on search engines, and grants domains a value between 1-100 (with 100 being the best score).

Domain authority considers multiple factors such as backlink count, social signals, Moz Trust, Moz Rank, content quality, and how search engine friendly the domain/website is.

Domain authority is a metric that evaluates an entire website.

Page Authority, on the other hand, is page specific.

So, your first step in investigating an expired domain flipping potential should involve checking the DA and PA of the domain.

Age can have an influence on these metrics (the longer a website exists, the more chances there are to establish backlinks, social signals, trust, etc.) but age is NOT the entire picture.

You shouldn’t buy a domain just because it is 3 letters and 15 years old…do your homework!

You can research domain authority and page authority metrics by using the Link Explorer feature on Moz.com:

moz-site-explorer

Backlink Count and Quality:

As I mentioned, buying expired domain names is a popular tactic webmasters use when launching a new website/blog because of the existing backlinks/authority old domains can carry.

However, not all expired domains possess a high number of backlinks, and total backlink count doesn’t mean squat if the links are of terrible quality.

When examining a potential expired domain to flip, you need to dig into the backlink/SEO profile of the domain.

2 main warning signs I recommend looking for include:

  • A high number of spammy backlinks (often times these referring websites will be Russian or Chinese).
  • A suspiciously high number of backlinks from some related niche websites that aren’t too great in quality. In my opinion, this could be an indicator that the domain name was using a Private Blog Network (PBN) service or their own PBN to boost their authority…this blackhat tactic can work, but it places your domain name at risk and the PBN owner could pull backlinks at any time.

So, how can you check the backlink quality of an expired domain?

Well, you can pay for a research tool liks SEM Rush, Ahrefs, or many other popular choices, or you can use a combination of the free ones to get a general sense of backlink quality.

You can also use Link Explorer from Moz to get an idea of the domain backlink profile.

Some of the websites where you can buy expired domains also provide some of these metrics, but I’ll go into that later.

The Expired Domain’s Website History:

Old domain names can be great in terms of authority, but they can also have complicated history and some baggage.

Expired domain names sometimes pass through several owners before arriving at the auction you’re bidding on.

While domain names like BestSUVs.com have probably only been used for car related websites, 3-4 letter domain names could have been used for anything.

Even if you are buying a domain name that is obviously for a niche/industry, you should investigate what else has used that domain name.

To check the history of a website, use Archive.org.

Archive.org allows you to research 333 billion records of web pages that have been saved throughout the years.

That’s a lot of domain names…you have pretty decent odds of finding something about your potential expired domain flip.

For aged/rare domain names, you might find quite an extensive history:

internet-archive-wayback-machine

Learning more about an expiring domain’s history can prove vital for the final part of your domain vetting process!

Checking for a Google Ban or Adsense Ban:

Researching the ban history of an expired domain name is also a very important part of the vetting process in flipping.

Many webmasters buy expired domains to start an authoritative niche website or add to their PBN because expired domains can carry authority.

However, if the domain name has been banned from Google Adsense or Google in general, this would be a complete turnoff for any potential investors you’d be trying to flip the domain over to.

To check an expired domain’s ban history, use:

Where to Find and Buy Expired Domain Names or Other Domain Names:

There are dozens of popular websites out there where expired domain auctions occur, and I’m going to share some brief information on each one.

DomCop:

DomCop is a frequently referenced platform for flippers to search for expiring/expired domains.

For $56/month, you are able to view an extensive database of expiring domains that includes relevant metrics such as DA/PA, backlinks, Trust Flow (a Majestic Metric), domain age, Ahrefs information, and more:

domcop-expired-domains
This is just preliminary information: you can dig further into expiring domains.

domcop-info

In a nutshell, DomCop provides pretty much all of the information you would need to decide if an expired domain is worth investing in.

Pros:

  • Great metrics on expiring domains.
  • Can also research dropped domains (these are domains that have been deleted from the domain registry and are available for anyone to buy through backorders or a drop catching service)…this is essentially buying an ‘expired’ domain, not an ‘expiring’ domain.
  • Very solid UI and easy to research potential domain purchases.

Cons:

  • DomCop is a relatively expensive, premium domain researching service.
  • To access DomCop’s expired and archive database, you need to pay $98/month.

ExpiredDomains:

ExpiredDomains.net is similar to DomCop in that you can research expiring domains/deleted domains.

On ExpiredDomains, you can either buy expired domains on backorder, or simply register a deleted domain name just like you would register a fresh domain name (with a service like GoDaddy or SiteGround):

backorder-expired-domain

Both the expired domain and deleted domain section provide some handy domain metrics to consider:

expireddomains.net

The metrics are slightly different than DomCop, and include information such as total backlink count, backlink count from unique webpages, domain DNS status, and number of related domain names.

Ultimately, you’d want to do more research on a potential domain name to flip beyond just looking at these metrics, but this is still a decent start.

Besides, once you register for free, you’ll have access to the entire database of expired and deleted domain names.

Pros:

  • Free service.
  • Decent database of both expired and deleted domain names.
  • Easy to use.

Cons:

  • Fewer metrics to assist in the domain research process.

Domain Hunter Gatherer:

Domain Hunter Gatherer is somewhat unique in the world of domain flipping because it is a software service, not a website.

With Domain Hunter Gatherer, users can download domain researching software that offers a variety of tools based on their plan:

domain-hunter-gatherer

Now, the free version of DHG is just an auction scraper: free DHG users can use the tool to find current auctions on expired domain names.

This is nice because it can allow novice domain flippers (like myself) to research what domain names are hot on the market, what value these domain names have, and how the marketplace functions.

DHG also provides current bid data, bid end dates, domain age, buy-it-now pricing (if available), and useful metrics like DA/PA, social shares, Tust Flow, and Alexa/SEM/Ahrefs stats:

domain-hunter-gatherer-interface

 

Searching via keyword to find niche-specific expired domains is also easy with DHG.

Ultimately, I think this free domain hunting tool offers a great solution for novice flippers to get in on the action.

Pros:

  • Free.
  • Easy to install, easy to use.
  • Auction data is very handy for learning/buying purposes.

Cons:

  • A lot of content is locked behind their membership plans…although the Premium Plan isn’t too expensive.

Other Domain Research Tools:

There are dozens of other free and premium websites/tools you can use to research and buy expiring/expired domains.

Some popular options include:

  • Domainhole.com: A freemium tool that offers a handy solution to search for domains using keywords and relevant filters.
  • Dropcatch.com: A simple way to get in on expired domain auctions or backorder domains.
  • JustDropped.com: Find deleted domain names.

Is Domain Flipping Profitable?

If you registered fridge.com or computer.com 15 years ago, this obviously isn’t a question that’s hard to answer.

Premium, desirable domain names have value. There’s no question about it when websites like cpc.com are being sold for $200,00+ bucks.

However, a valuable asset isn’t a guaranteed flipping opportunity.

Additionally, the world of domain flipping has a steep learning curve, is immensely competitive, and can require years of patience to finally make a successful flip.

To give a glimpse of some successful and unsuccessful domain name flips, I’ll provide 2 historical references.

Example 1 – VReu.com sold for $605:

flippa-domain-name-sale

Here’s an example of what I think is 1 successful flipper selling a domain name to another flipper.

VReu.com is a 4 letter, aged domain that also asserts authority in the European virtual reality market.

This website was purchased 41 days ago but still has no active website (it just redirects to a Flippa landing page).

Therefore, I assume the new owner of this domain is just going to hold on to this domain name until some European virtual reality company decides to pay a few thousand dollars for it.

I mean, this seems like a reasonable purchase.

Virtual reality technology is continuing to grow, so betting on an increase in demand on this domain name seems like a decent bet.

As for the seller of VReu.com, he probably made a nice profit judging by his Flippa records and current listing that are also receiving bids and attention:

flippa-seller

flippa-history

Clearly this guy is used to domain flipping seeing as he has grossed over $21,000 from flipping domains and is currently flipping 3 other domains.

I think this example provides a general idea of the marketplace…

A guy buys a domain name that has some potential, and he flips it for a profit to someone else, who either builds a website off of the domain name or just flips it to the next person.

And so, the earth keeps spinning.

I mean, sometimes it can take years – check out this flip on zoma.com:

zoma domain name sale

Zoma.com was purchased for $1,510 in 2006, and then sold for $11,200 earlier this year!

I don’t know if the domain name unofficially changed hands between 2006 and 2018 or if a single owner was holding onto the domain, but in any case, that’s a $10,000 gain over 12 years.

That’s a far better return than if that $1,500 had sat in an index fund at 7% annual return for 12 years…although the risk is far higher.

That’s another flipping success story, but what happens when that second buyer never comes to the table?

Example 2 – yig.com:

Yig.com was a quick domain flipping attempt gone wrong:

Yig.com was sold on July 3rd, 2017 for $16,000…after it was purchased 4 months earlier for $20,500:

domain flipping loss

Yig.com is currently the domain name for a yacht and luxury property group, so it seems this specific domain has reached the end of its flipping days for the time being.

I assume the owner of Yig.com had a sudden need for cash to accept this sort of domain flipping loss, but this does show that domain flipping isn’t a get rich quick endeavor.

In fact, I am almost certain that most people will lose money on the first few domain names they attempt to flip.

Granted, a $20,000+ domain name is probably more than any novice domain flipper would start out with, but you get the idea.

Domain flipping is NOT a get rich quick business. For most people, it probably isn’t a get rich slowly business either.

My Own Experience with Domain Flipping and What I Suggest:

I registered for a GoDaddy Auction account 2 months ago and have attempted to buy 2 domain names in that time.

In both auctions, another buyer had an automated bid option setup that would have their account automatically bid on the specific domain name up until a certain price point.

And so, in these 2 of these auctions, I was continually out-bid every single time, with my highest bid reaching $175 in the second auction.

I have no idea how much these other buyers were willing to spend on these domain names, but both domain names ended up selling for between $300-$400.

Personally, I can’t afford to gamble with that sort of money.

And that’s the thing with domain flipping: it’s risky business, especially for novices.

Seasoned domain flippers might have reportedly lucrative track records, but even they don’t sell domain names for profit every single time.

Thus, when deciding if you want to start domain flipping, only spend money you can afford to lose.

Additionally, start out slow and small.

You don’t need to buy $1,000’s of dollars worth of domain names from the get go or invest in premium domain hunting tools.

Just stick to the free tools, and keep things simple.

If you read the Ali Zandi interview I mentioned earlier, you’ll see that’s exactly what Zandi did.

He started out slowly, purchased 10 relatively cheap domains, and he didn’t continue the side hustle until those 10 domains sold for profit.

I think that setting hard limits for your own budget, auction ceiling, and how fast you want to make money is very important to do before you even start domain flipping.

Using Expired Domain Names for Yourself:

I realize that there is a lot of value in an aged, expired domain besides any flipping potential.

I also realize that I left out this important tidbit of information in my post on how to start a successful blog.

See, I actually regret registering ThisOnlineWorld as supposed to buying an expired domain name because an aged domain name can have a lot more authority right out of the gate.

So, for other bloggers or webmasters out there, don’t discount the power of aged internet real estate.

Here are some useful things you can do by purchasing an expired domain name:

  • Build an entire website on the authoritative domain: Just launch your blog/website from a domain name that already has backlinks and DA/PA.
  • Utilize 301 redirect: Transfer some link juice from an expired domain with an impressive SEO profile onto your existing website.
  • Park the domain: If your domain name receives a lot of traffic from typos or referral traffic sources, you can park with popular parking service providers to earn money from advertisements placed on the page (I want to write a more in-depth blog post on this, so stay tuned!)
  • Build a mini PBN: If you own a few domains with some decent link juice potential, you can use them (very cautiously) to promote your own money-making website.

Final Thoughts on Domain Flipping:

This has actually been my longest post on This Online World, as well as one of the few money making methods I haven’t successfully used yet.

However, I wanted to do my best to summarize a lot of the information out there, as well as dispel the myth that domain flipping is easy money.

You can get rich by domain flipping, but you can also lose a lot of your money (and this is more likely to be the case).

Personally, I’m going to keep dabbling with a $100 budget to see what I can do, but I will definitely start slow.

I also encourage you to read more guides on domain flipping, interviews, and general info/terminology in the industry before getting into this side hustle.

I’ve just included some of the basics behind domain flipping and the researching/buying/selling process, but this is a complex field that can’t be fully summarized in a single post.

In any case, I hope you have enjoyed this slightly different post on online side hustles and making money online!

 

1
Leave a Reply

avatar
1 Comment threads
0 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
1 Comment authors
Karine Beriault Recent comment authors
  Subscribe  
newest oldest most voted
Notify of
Karine Beriault
Guest

Wow! Thank you for all that information! Will definately look into that!