So, you’re thinking about domain flipping. Maybe you’ve heard of profitable domains selling for impressive amounts or maybe you’re just seeking more than just a typical side hustle.
But one question holds you back: is domain flipping legal? The good news is: yes, domain flipping is perfectly legal. But like any business, there are rules and best practices to follow.
This isn’t a get-rich-quick scheme. It takes time, a good strategy, and sometimes, a bit of luck.
This post covers everything about the legality of domain flipping, how to flip domains, and the strategies to potentially make a profit selling domain names.
Is Domain Flipping Legal: Understanding the Boundaries
Domain flipping is entirely legal. It’s similar to real estate, but online. You buy a domain name at a good price, hoping its value increases, and later sell it for a higher price.
Trademark and copyright issues are where things can get complicated. Cybersquatting, or registering, buying, and selling domain names with the intent of profiting from someone else’s trademark, is illegal.
An example would be registering “Googl.com” and attempting to sell it to Google. This kind of domain drop catching is illegal.
Navigating Trademark and Copyright Issues
Before buying domains, due diligence is essential. Do some research before flipping domains to see if it’s profitable in that niche.
Checking if it is a friendly domain before purchasing it is important as well.
A search on the United States Patent and Trademark Office’s trademark tool can prevent future problems. Research existing trademarks.
Be wary of domain names that might infringe on a trademark.
Don’t limit yourself to U.S. trademarks. Consult the World Intellectual Property tool for international trademarks. Pay attention to international trademarks for a broader search and to avoid legal issues.
Finding Your Niche: Different Types of Domain Flipping
There are several types of domain flipping. Choosing the right niche can affect your profits selling domain names. It is important to pick level domains and stick to those.
Expired Domains
These are domain names with lapsed registrations. Catching a quality domain like an expired domain before others can be very valuable.
Websites like Dropcatch.com, Pool.com, and Nidoma.com help you find and buy expiring domains.
Short Domains
Short, brandable domain names are highly sought after. These brandable domains are easy to remember, type, and sound professional. Examples of successful domain flips are Voice.com (sold for $30 million) and Fly.com (sold for $2.89 million).
However, the competition for short domains is fierce. Many people want short, brandable domain names. If you find a valuable domain like this, the higher price will follow when flipping domains.
New Domains
Emerging Top-Level Domains (TLDs) create opportunities. These aged domains have created domains like the .xyz with over 5 million registrations, illustrating their success.
They provide options beyond traditional .com extensions. New TLDs can attract buyers looking for something different when buying domain names. Buying domains that are new may help increase site rank down the line.
From Zero to Hero: Strategies for Domain Flipping Success
Is domain flipping legal and potentially profitable? Absolutely. However, how do you succeed? How long does it take for domains to sell?
1. Research: Know Your Market
Market research is crucial. It’s time to become a domain hunter when doing your research.
Use tools like Google Keyword Planner to find keywords people search for. With millions of existing domains, tools like GoDaddy Domain Name Search can help you identify good and valuable available names.
A website’s backlink profile is important for site rank. Use SEO friendly practices for domain name search to find the perfect SEO friendly domain. Finding domains sell quicker with these SEO friendly strategies.
2. Buy Low, Sell High: The Art of the Deal
Finding a great deal is crucial. Buy domains at the lowest possible prices and negotiate strategically. Purchasing expired domains can be a cost-effective alternative to domain auctions.
Domain hunter gatherers often target expired domain names that can be caught through domain drop catching services.
3. Showcase Your Domain: Platforms for Selling
Use platforms like Afternic to list domains for free (they take a commission upon sale). Specialized platforms like Efty enhance the selling experience.
Each platform has different pricing policies (fixed vs. flexible) which impact seller profits. Understanding domain ownership and how to properly handle the buying domain names process are essential for this.
Afternic lets you buy domains while giving domain listings significant exposure to find potential buyers who buy domains regularly.
Selling domain names through such a service comes with potential profit loss due to how pricing policies are handled when compared with fixed price marketplaces for selling domain names like Efty.
4. Escrow: Securing the Transaction
While escrow isn’t mandatory, it provides a safety net for large transactions. Escrow services like Escrow.com protect both buyer and seller. Use escrow for the best domain flipping practices.
The Real Deal: What to Expect with Domain Flipping
Domain names can sell for significant amounts. Business.com sold for $350 million in 2007, up from $7.5 million. But success requires hard work and it still takes time even for the most in-demand domains to sell.
Not every flip is a winner. Domain authority is not created equal. Some domain flips might not be as profitable and end up in your domain collection for quite some time before getting bought by domain flippers or those looking to build website content.
When flipping domains it can help to take advantage of available WordPress hosting to provide more complete domain hosting packages that provide search visibility for hosted domain services.
It’s important to have reasonable expectations. The average monthly profit for sellers varies. This can be a lucrative venture but is not guaranteed.
Conclusion
Is domain flipping legal? Yes. Can it be profitable? Definitely. Is it a guaranteed path to riches? No. It requires a strategic approach and market understanding.
Like real estate, not every domain resells for a profit. Due diligence and reasonable investments are crucial for protecting yourself.
Ethical practices are paramount. Using an escrow service protects both buyer and seller in a transaction, acting as a secure intermediary.