Domaining

What is domaining?

Domaining is the business of buying, selling, developing and monetizing domain names.

Domaining is BIG business. It's just not about the big names. Experienced domainers can quickly cash in $10,000 or $100,000 on unknown domains, typos, etc.

Domainers, as defined by Wikipedia, are individuals whose profession is the accumulation and dealing of generic internet domain names. This guide will show you how to be a successful domainer.

Here's some known domains and what they have been sold for:

• AsSeenOnTv.com - sold for $5.1 million
• porn.com - $9.5 million
• vodka.com - $3 million
• Wine.com - $2.9 million
• Express.com - $ 1.8 million
• Websites.com - $970,000
• Rock.com - $1 million
• Altavista.com - $3.3 million

No big suprises there. What you don't hear that much about is a million of other domains that get bought and sold every day. Here's some less attractive domains that was recently sold, and as you can see there's still a lot of money to be made:

• calgaryalberta.com - 6,500 $US
• textarts.net - 5,600 Euro
• soundandfury.com - 10,000 $US
• städte.de - 11,100 Euro
• pow.com - 100,000 $US
• renewableenergy.net - 7,778 $US

Some of these were probably unregistered domains just months ago, and then all you would have to pay would be about $8 for the registration fee. Now do you see how big business this could be for you? At least Kevin Ham knows... he've buildt a $300 million empire from domaining! (more about this guy soon)

Mini Case-Study: Making A $300 Million Empire From Domaining

Before I go on with our step-by-step guide. Kevin Ham is a genious domainer. He recieves 30 million unique visitors (source) per month, which is an amazing profit opportunity.

When I think about typos in domain names I think of examples like "faceboo.com" or "facevook.com" instead of "facebook.com". But an even more common typo might be facebook.cn instead of "facebook.com".

According to CNN Money Kevin Ham is the man behind the latest domain scheme: "profiting from traffic generated by the millions of people who mistakenly type ".cm" instead of ".com" at the end of a domain name."

Kevin Ham is not the typical domainer though. He really thinks outside the box, and that's what it takes to reach the top in this industry. His .cm venture didn't happen by itself. Cameroon (the West African country) is actually a partner with Ham, and he has connections with the Cameroon government because they just happen to be so fortunate to own the top level domain .cm.

The lesson here is that not all visitors come from the Search Engines. Not everyone uses Google when they travel the web. Traffic is convertible, and what you get is money. Of course targeted traffic are more valuable, but all kinds of traffic has some kind of valuue

“Type-ins”, or the errors people make when they type in a domain name may create traffic that you could profit from, just like Ham does. But he also buys domains that are of more obvious value, like Religion.com and HotelDeals.com. Above all, success stories like those of Kevin Ham teach us mainly one thing: You really CAN profit BIG from domaining.

How To Make Money From Domaining

It's almost like buying stocks or real estate, or virtual real estate at least. It's the basic forces of supply and demand that could turn domainin into something profitable. It's all about buy low, sell high (or buy cheap, sell for more).

Domaining is all about traffic (and profiting from traffic). Here is the most common ways to profit from domaining:

• Domain hijacking is the process by which internet domain names are stolen from the rightful registrant. Individuals that participate in domain hijacking is, of course, criminals, and should be treated as such. Domain theft is all about fooling registrars to transfer domains, and identity theft is part of this business. While you could make a lot of money by involving yourself in such criminal activity, it's plain stupid as the risk of getting caught are too high. I do not recommend such methods because of their illegal and immoral nature.
• Cybersquatting is registering of domain names with bad-faith intent to profit from the goodwill of a trademark that you do not own yourself. Money is made by converting traffic, usually with landingpages or ad-pages, or building targeted services, until the cybersquatter finally sells the domain, usually to the rightful owners of the belonging trademark. Participation in cybersquatting involves extreme risk as you never know what the company of the respective trademark decide to do. They might pay for the domain, or they might sue you to get the domain name by using the Uniform Domain Name Resolution Policy developed by ICANN. If you decide to participate in cybersquatting, make sure you understand the legal aspects and the risks involved.
• Typosquatting (or URL hijacking) is a type of cybersquatting where the domainer buys domains that closely resembles those of well established domains to get traffic, and possibly to sell the domain at a higher price. Typosquatting may not include unlawful activity, but the immoral aspects of unfair competition remains. While corporations spend millions of dollars in branding their trademarks, a domainer can buy domain name variants similar to the trademark for less than $10. Kevin Ham is one of many that profits from typosquatting (Remember the .cm deal?). Other type-ins include not only typos of the domain name itself, but typos of the structure, such as wwwgoogle.com instead of www.google.com.
• Domain Tasting is, as defined by Wikipedia, the practice of a domain name registrant using the five-day "grace period" at the beginning of the registration of an ICANN-regulated second level domain to test the marketability of the domain. During this period, when a registration must be fully refunded by the domain registry, a cost-benefit analysis is conducted by the registrant on the viability of deriving income from advertisements being placed on the domain's web site.
• Domain Kiting is the process of deleting a domain name during the five-day grace period and immediately re-registering it for another five-day period.
• Domain Sniping is the process of registering a domain name whose registration has lapsed in the immediate moments after expiry. However, the Redemption Grace Period (RGP, ICANN) which allows registrants 30 days to reclaim their domain name makes domain sniping a less attractive activity.
• Speculative Domaining include the buying of any available domain (both unregistered and registered for-sale domains) to make a profit. Domainers then buy domains that they believe will become valuable at some point in the future, or the buying decition is based on an assumption of the value of the current traffic and the potential for the domain itself. For example, one could speculate in the names of future hurricanes. If you bought a set of domain names based on hurricane Katrina you could buy domains such as hurricanekatrina.com and get a lot of traffic from the search engines, or you could sell the domain name to others that might find the domain valuable. Buying porn.com for $9.5 million is a speculative purchase. On the other hand, buying a strange name like qwerty123456789.com might also be a speculative purchase.
• Domain Parking is the monetization of under-developed domain names by providing CPC ads or other revenue sources for random visitors. Both domainers and registrars depend on domain parking as a valuable source of revenue. Domain Parking could be used with any of the processes mentioned above.

STEP ONE: Select Your Business Model

There are many kinds of domainers. And each domainer has their own business model.

Let's see what business models there are to choose from in domaining:

• Domain Monetization - This business model is for the domainers that want to make money right away. They buy domains, and develop strategies to profit from the traffic they get.
  Example: You buy YouRube.com and then simply monetize type-in traffic and other exsisting traffic.
• Domain Development - This business model is used by domainers that brand the domain name, add a website and a service to the domain, and capitalize on traffic until they sell the domain name and its service.
  Example: You buy InternationalTravel.com and develp a site about traveling around the world. Then, when the site is developed and it has the traffic amount you were targeting, you sell the domain to an interested buyer.
• Domain Capitalization - This business model emphasizes the assumed value in the future.
  Example: You buy BananaWater.com and expect that there will be a product with that name launching some time in the future, or you might expect an individual to buy this domain.

A domainer could use all business models above, or he could specialize from just one or two of these. For example, you could buy a domain that you expected would be valuable to some other party in the future (domain capitalization) AND before this event you could profit from developing a website for the domain (domain development) AND exsisting traffic, if any (domain monetization).

Before you get started in domaining, you must select your business model. Of course, you might be new to domaining, and if you choose to change your business model at a later point, then there's nothing wrong with that.

STEP TWO: Buying Domains

When buying domains you will need a domain registrar or simply use a typical hosting service.

The domains that you want may be taken (already registered by another person or company) or they may be available and not owned by anyone (the domain name may have never been registered, or the domain name has become expired and are now available for anyone).

Buying TAKEN domains: Almost every domain is for sale if the prize is right. There are many services that offer domainers to buy and sell taken domains, such as sedo.com (Sedo is the leading marketplace for buying and selling domain names and websites). Here's some examples of what you could buy from their auctions: retireinscottsdale.com for 10,000 $US; flixi.com for 210 $US; and mexj.com for just 60 $US. Knowing what to buy and what not to buy is the tricky part of domaining – or in other words: Learning how to value domains. Sedo offers domain appraisals to suggest what your domains are worth.

Buying UNREGISTERED domains: I recommend you buy unregistered domains from Bluehost.com as they will allow you to buy UNLIMITED domains attatched to one hosting account for just $7.95. You'll get 600 Gigs of Web Hosting Space and 6,000 Gigabytes of Bandwidth and if that is not enough for you then it's easy to update anytime. Both newbies and professional domainers use Bluehost as a trusted business partner. I use Bluehost ourselves and have never had any problems with them. It's been a very positive experience. Go here to register domain names with Bluehost.

Here's some questions you should ask yourself when buying your first domains:

1. Is the domain already taken? (You can use Bluehost to check if someone already own the domain)
2. If the domain is actually taken, how much am I willing to pay for it? How much is it worth? (Sedo, among others, can help you with domain appraisals)
3. In which ways can I profit from this domain? (Hint: See the three business models above)
4. Does the domain already recieve traffic? (Even domains that are not taken could recieve a lot of traffic, for example because of type-ins.)
5. What type of traffic does the domain recieve? (Read our article about Traffic That Converts to learn how to value traffic)
6. Can I easily sell the domain to others once bought, at the prize I got it for? (Question helps you to determine if this domain is a speculative investment or a safe buy)
7. Can I easily profit from the domain once bought? (Question helps you to determine if there is sufficient demand for this domain)
8. Which business model (see the step above) do I intend to use with this domain? (Helps you to stay focused once the domain is acquired)

Now, go on and buy a few domains, either buy taken domains through Sedo.com or available domains through Bluehost.

There are good deals out there right now, all you have to do is to find them. Buy a few domains, and then continue to the next step.

STEP THREE: Learn About Domaining

The best way to learn the art of Domaining is simply by doing it. Don't sit for days and weeks and just read about domaining. Start softly by buying a few domains, and you could get your first sale pretty soon just by using common sense.

However, learning from other people's experience is a great way of enhancing your own skills as a domainer.

Here's a few great sources of wisdom and inspiration to begin with:

• Forums
  
  1. NamePros.com - an active community of domain name owners, investors, buyers, and sellers of all kinds.
  2. WebMasterWorld.com Domain Names - This forum discusses general domain issues, such as: domains as a brand, domain values, negotiating domain sales, domain inventory management, and domain monetization.
  3. DomainState.com - a free to use resource for people to discuss matters related to the domain industry in a professional environment.
  4. DigitalPoint: Domain Names - For discussion related to registration, transfers, reselling, etc.
• Blogs & News
  
  1. DomainTools Blog - The blog from DomainTools.com, very good.
  2. InsideDomaining.com - Great blog about the art of domaining
  3. Whizzbangsblog.com - A resource for domain name owners
  4. SevenMile - The blog of Frank Schilling, a known domainer
  5. Domainnews.com - Industry news for domainers
  6. Domainnamewire.com - a news source for the domain name industry written by industry experts and edited by Andrew Allemann.
  7. theDomains.com - blog about all things domain.
  8. Internet Corporation for Assigned Names and Numbers - ICANN was created through a Memorandum of Understanding (MoU) between the U.S. Department of Commerce and ICANN to transition management of the Domain Name System (DNS) from the U.S. government to the global community.
• Tools
  
  1. DomainTools - Wildcard search of all current/deleted/expired whois domains.
  2. Domain Age Tool - displays the approximate age of a website on the Internet and allows you to view how the website looked when it first started.
  3. Text Link Checker Tool - This tool will scan the links on your website, and on the pages that your website is linking to, and flag possible problem areas.
  4. DNS Report - This test provides comprehensive information (56 tests, to be exact) about the specified domain that may verify DNS 'health' or identify problems or issues.
• Books
  
  1. Domain Name Law and Practice: An International Handbook by Torsten Bettinger
  2. The Domain Name Handbook; High Stakes and Strategies in Cyberspace by Ellen Rony & Peter R. Rony
• Conferences
  
  1. DOMAINfest - an event built to serve the domain industry.

Want to Become A Rich Domainer? Start Learning Today!

Don't ever forget that as a domainer you're competing against thousands and thousands of professional domainers. It's a though market, but if you're determined you could still succeed.

Knowledge and skill is the key to becoming a profitable domainer. You absolutely have to fully understand the domaining industry to succeed, and you need to learn all there is to learn. Sure, you can't accurately predict what buyers would want to pay for your domain in the future, but you can gain knowledge about the current market and make very good assumptions about what they might pay.

Furthermore, domaining is not as different from investments in securities and even real estate investments: It's a speculative business and you never know for sure if you're going to loose what you've invested (the money you've invested and the time and energy you have spent on your domain name). If you want to get paid by the hour, then get a job.. On the other hand, If you want to make millions in the domaining industry, you'd better start learning as much as you possibly can, and start today.

STEP FOUR: Learn To Spot Scammers

Domaining is not free of risk. But what could possibly go wrong? Risks include: The risk that .com names (or other top level domains) decrease in value. If you're into Typosquatting you risk that companies might sue you. The risk of someone hijacking your domain. And of course: The risk of getting scammed when selling or buying the domain.

There are always some new scam going on in the domaining industry. Even most professional domainers have first hand experience with scammers, and they've been fooled too. Do not think you can easily aviod them.

Have you ever heard of The Domain Registry of America (or Domain Registry of Europe or EU Registry Services)? They typically send letters to domain owners that appear to be domain renewal notices, but on closer inspection are actually offers to transfer your domain name to another registrar. Although you're the one responsible for the renewal of your domains, most registrars will notify you when it's time for renewals.

Take a look at the letter below, it's one of many types of scams domainers encounter:

The scam har been mentioned all over the web, including this article from The Register, and is wellknown to domainers. However, scams like these are the ones that are easy to spot...

The best way to avoid scammers is to deal only with people and companies that you trust. New domain scams are popping up everywhere, but you can avoid getting scammed yourself by keeping yourself updated on industry news and trends. Read in forums and blogs (see the links above) to learn what others have to say, and learn from their experiences. Informing other domainers about scammers in the industry will make it harder for the scammers to destroy the business of serious domainers.

Other type of scams in domaining include lying about traffic statistics or providing deceitful information about the traffic and/or other issues related to the domain name. Again, the best way to avoid scammers is to deal only with the people and companies you trust completely.

STEP FIVE: Build Your Portfolio

Successful domainers usually own a lot of domains. These domains constitute their portfolio. You could read on CNN Money and other respectful media about domainers that sell their portfolio for hundreds of millions. There's no question about it: If you know how to find valuable domains, and a lot of them, then you too will make money as a domainer.

It's easy to be tricked into going on a buying frenzy after reading about successful domainers, but keep in mind that you need to buy valuable domains at a reasonable prize to make a profit.

Basically, if you know how to buy domains and make it profitable, then that's all you need to build a huge portfolio.

Your income will most likely vary, depending on your business model. Some domainers might not make anything worth mentioning for weeks, months or even years, then when they sell one of their valuable domains they might cash in millions on just one deal. Others create continious revenue through parked domains and developed domains while simultaneously searching to find the perfect buyer.

Domaining is BIG business and if you think the domaining industry got something for you, then go ahead and buy some domains today. You don't need to invest heavily from day one. Take one step at a time, and order a few domains. The best way for beginners is probably to register available domains through, and sell the site through Sedo.com, eBay.com or any other auction site on the web.