The Zen and Art of Domain Flipping

By on March 19, 2008

Lately there has been a lot of buzz in the domain industry over developing vs. parking your domain. For domain owners with large portfolios, development just isn’t an option and parking is essential to monetize their domain names. Some domainers pick a segment of their portfolio to develop and then park the rest. However you choose to monetize your domain names there is one question you need to ask yourself, “Is my domain name appreciating?”

Your domain name appreciates based on a variety of factors. One of the best ways to increase the value of a domain name is by creating repeat monthly visitors. A domain will always start with an initial-value based on the name. If you own cars.com or weddingrings.com then your domain name is very valuable no matter how much traffic it gets. Still, it will be even more valuable if it has steady recurring monthly traffic. For a domain with little or no name-value like look4gr8deals.com traffic will be the most important component of the domain value. I always like to look at Sedo listings based on traffic. Looking at high-traffic domains there is always one thing in common – bids. Terrible domain names can sell for $x,xxx just for having great traffic numbers.

Domain parking can be a great way to monetize a domain that gets a lot of traffic. If you have a strong keyword domain, especially one that gets type-in traffic, then parking will most likely yield good results. Domain names are often purchased as a multiple of their revenue. Thus if my domain name makes $100/month, then I might expect 27x revenue, meaning I would expect $2,700 for this domain name. What if you could take the revenue you make on each domain and increase it by 10x. That would mean a domain making $100/month would now make $1,000. This would also mean your domain could now sell for $27,000!

Welcome to Domain Flipping. Domain Flipping means taking the time to create a high-quality website on your domain with well-written content that your visitors are looking for. Rather than making your domain a portal to content, put the content on your site! People that usually click a link within five-seconds of visiting your domain might stay a while now. This gives the user time to explore your site, visit different pages, maybe even interact with other users on your site. By making your domain a destination rather than a pass-through you can create a very valuable asset.

One of the main problems with parking pages is that users have no reason to stay on the website. Without a captive audience it is hard to get users to buy a product from your site. Instead you simply cross your fingers that the user clicks a link on your domain to get to another website. You might make thirty cents, maybe even fifty cents for this click. The website that now receives this user can now sell products that make $10, $20, or even $1,000+ a sale. A flipped website can provide your users with a place to buy products they are looking for. Now your domain that was making under a dollar per visitor can make ten or twenty dollars per visitor.

Domain Flipping also allows you to build organic traffic to your domain as your site can be optimized to rank well in search engines. Parked pages don’t rank well at all because they don’t have any content. Google is not a big fan of pages full of links, they know their users want websites with content. You can also offer advertising space directly on your flipped name. If you get thousands of visitors a month why not put a few banner ads on you site for $20/month? It is advantages like this that allows Domain Flippers to monetize their names at a much greater rate than parked pages.

It’s unrealistic to expect anyone to flip thousands of domain names. Instead, focus on the top ten or twenty domains in your portfolio. The extra revenue generated from each flip will become a huge motivator to flip more names. Domain Flipping isn’t for everyone; you need to understand how to build a website, create good-looking graphics, and provide for interactivity features like PHP. Paying a web design company is oftentimes out of the question as the expense can be too great. To make Domain Flipping truly successful you have to keep your design costs at $0.

Domain Flipping also requires a bit of writing as well. Not only do you serve the role of web designer but you are also the content-writer! The great thing is you don’t charge yourself anything! That’s right – you are getting the website and content for free! Once again, this is why I say Domain Flipping isn’t for everyone. If you absolutely hate writing and couldn’t write an interesting article to save your life, then flipping might not be your thing. There are a lot of domainers out there with good web design skills and the ability to write high-quality content that people will read. Are you one of these domainers? If not, what’s stopping you?

About the Author

Morgan Linton is the author of “Domain Flipping: How to Profit from the Domain Name Boom.” He also runs the popular blog, Bloggings of a Domain Flipper where he covers topics from domain monetization to search engine optimization and industry news. Morgan is the CEO of Linton Investments, a Domain Investment company in Boston, MA.

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About Mark Fulton

Mark is the Founder of DotSauce Magazine and a full time web developer, domain investor, SEO and online marketing professional residing in North Carolina, USA. Visit MarkFulton.com for information on freelance website development, SEO and consultation services.