Domain Name Business Ideas: How to Buy and Sell Domain Names


domain in a cart
Domain name trading
One of the huge profit businesses online is trading domain names that is buying and selling domain names. The business is very lucrative and experienced traders make thousands of dollars doing only domain name business.
Trading domain is done online so its not location specific so investment in this kind of business can be done so long as you have internet connection. Many internet entrepreneurs often discover and understand domain name trading after several years of searching for viable online business opportunities.
However, when they get the hang of trading domains they are hooked and virtually do nothing else but trade domain names. Therefore, anybody interested in trading domain names should learn the basic and start gingerly until they gain proper experience.
Domain names can point to a specific IP address or multiple addresses. They have a URL, which is an abbreviation of uniform resource location.
.com image

Image of.com | Source
What is a domain name?
So what exactly is a domain name? Domain names are sometimes referred to as internet real estate because of the way they function. A domain is an identification of an IP address that has been registered by a domain name system.
Domains generally have to do with an IP source and the location of a particular name. Every website has a domain name such as eBay.com, amazon.com, Google.com, or yahoo.com.
The name represents a hosted location of the website or online property by a particular host provider. Domains are rather interesting because they are not case sensitive and are easily written lower or uppercase alphabets.
Like most real estate or landed property, the value of land varies according the location. Prime property attracts premium prices while property in low income areas attract less price.
For example highbrow area attracts high property value in comparison to the suburbs.
 Top level domains

domain names

Top level domains
A beginners guide to Buying and Selling Domain Names


Different level of Domain names
So when looking to invest in domain name business it is logical to identify the different level of domain names. Most prime domain names are already taken like art.com, health.com pet.com etc.
This is because domain names first appeared in the early eighties and by 2009 had over 190 million registered domain names. Top-level domain names introduced in the 1980s, are mostly name extensions like .gov, .edu, .edu, .net, .com, .int, .mil.
Finding and buying a top-level domain name can be costly but like property increases in value over time. The more difficult to get a domain name the more expensive it gets.
Top-level domain names have sold for sums ranging from $1000 USD to $50,000 USD. While second level domain names are also good to buy but they do not attract as much money as top-level domains.
Each country also has domain names extensions like .ng for Nigeria and .za for South Africa. Some examples of second level domains are domain names like .co, .uk, .sos, .state.
There is also the third level, forth and even fifth level domain names but we do not think you should bother with domain names on the third level downwards.
Domain levels
Top level
   Second level
   Third level
.com
    .eu
        .me
.net
    .co
       .guru
.info
    .uk
       .co.uk
.org
.    os
       .club
Different levels of domain names
Different levels of domain names include
1 top-level domain names like .com .net .info .org .edu
2 country code domain names like .ng .gh .za
3 second level domain names like .co .uk
4 third level domain like .sos .state .oh .name .club .guru .too
Website/domain host providers
There are virtual hundreds of web host providers, so choosing the right one is important. Some good web hosts are GoDaddy.com, Wix.com, Namecheap.com, Hostgator.com Register.com, and many others.
The function of website host companies include website builder, hosting, domain packing, website designs, templates, domain search tools and registering domain names on your behalf.
Buying Domain Names
buying domain name

Image: Buying Domain names
I need to buy a Domain name
A woman thinking of buying a domain name


A woman thinking about buying a domain name


Buying a domain name
New players in the domain name business have three options when looking to buy a domain name. You can either search for brand new unregistered domain names using a domain search tool to choose a domain name you like. You can play with words to formulate new domain names that are search engine friendly and buy for as low as $0.99
You can buy a registered domain name from a domain market place like flippa.com, sedo.com, or GoDaddy.com. Many registers have market places where you can bid and purchase a domain name of your choice.
Therefore, the first step in trading domain names is finding the domain name you are interested in buying and registering with a host provider.
GoDaddy.com is a good starting place because their services are much cheaper than many host providers. You can purchase your domain name using GoDaddy.com search tool or register to trade in their market place for a small sum.
When you buy a domain name, it gets a designated postal address, contact information of official registrar and owner of the domain name.
Godaddy.com web hosts
free domain parking
parked domain names
Hosting a domain name
During the process of buying a domain name and the administrative documentation is completed, the web host charges an annual fee to hosts the domain on their server. The web hosts service includes registration of the domain name, hosting the domain name or packing it when not in use.
The host provider manages the name server of a domain name and collects fees and contact information from registered users. Hosts that provide free hosting for domain names usual place advertisement on the property to recoup their administrative costs.
Packed or Not
Not all domain names become websites some are packed free or at a low cost. Some host providers like sedo.com share a percentage of advertisement earnings with the owner of a packed domain. The more search-friendly a domain name the higher value the domain name has because of the advertisement and traffic potential.

How to sell a Domain name (GoDaddy auction)
Selling your Domain Name for Profit
If you want to start flipping, domain names quickly buy old or expired domain names. Old domain names attract better prices because of their age, traffic sources, and back links. You can buy them at auctions through bids but be careful so you get them at a reasonable price.
All you need to do when selling a domain name is to list them for sale in market places like sedo.com, flippa.com, or GoDaddy.com. There are many other market places where you can sell you domain name.
The sale is done through a bidding process for certain duration between 1 week and a month. The owner can specify the duration for the bids and even put a reserve price, which should be met, or no sales.
If the sale is successful then you are paid either through Direct Bank Transfer, PayPal or through an Escrow account.
Transferring the domain name
Transferring the domain name from your hosted account provider to the new owner is done through the help of your host provider. Most web host has specific instruction on their websites on how to transfer the domain name to the new owner.
You can buy a good domain name and park for a while or improve its profitability before selling. Trading domain names is highly competitive and lucrative but be careful when trading domain names.
Step by Step process in Trading Domain Names
1     Signup and Register with a good host provider it is usually free
2     Search in their market place for a good domain name or create a new one
3     Buy the domain name and host it with the host provider
4     If you have bought an old existing name you can immediately offer it for sale
5     A newly created one needs to grow and mature before sales.
6     When the auction process is concluded the host provider remits your earnings to your account.
7     You then transfer the domain name to the new owner. The host provider will provide support when transferring a domain name to a new owner.
Domain business is big business but you need to learn the ropes and trade wisely. To get a feel of all we have written visit sedo.com and see how they trade domain names.
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