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How do people earn from domain names?

How to earn from domain names?

Not all everyone has made millions from domain name sales. However, a lot many – people like you are me – have earned hundreds of thousands! You just need to be a little smart and use a simple but effective business strategy.

For instance, Rick Schwartz, the “Domain King” who has been involved in several million-dollar sales, had purchased iReport.com for a measly $100. He later sold it to CNN, the omnipresent news network, for $750,000! Rick had ended up with a huge profit on his small investment. So how did he do it?

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Firstly, Rick was smart to spot the potential in iReport.com. It was short and apt for an company from the “news” industry (though I doubt Rick would have ever thought that CNN would approach him one day). Secondly, Rick held on to the domain name for almost a decade. Only when the right buyer approached, did he think of selling – a great strategy for the domain name business. Thirdly, Rick’s asking price would have been influenced by the fact that a news network giant wants the domain name. You’ll probably agree with me that iReport.com may have been worth a few thousands, certainly not three-quarters of a million!

This example clearly illustrates the fine nuances of how people have earned from domain names – a keen eye, patience and good negotiation skills. The domain name doesn’t need to be a “generic” word nor does it they need to be overtly-catchy.

Domain name trading – The strategy

After reading hundreds of blogs, web sites, white papers and books, I’ve realised that in order to earn big bucks from domain names, one just needs to follow a simple plan.

  • Identify a domain name that holds potential in future.
  • If it’s already in use, negotiate with the present owner.
  • Be patient and hold on to the name till the right buyer comes along. Domain name renewal costs only $10-$15 per year.
  • Identify potential buyers and pitch them your product. Buyers can be found at several online domain name auction web sites.
  • Negotiate with the interested parties.

One more thing… and this is important.
You need to expand your portfolio. A lone domain name cannot carry the key to riches. For instance, at one time, Rick Schwartz owned thousands of domain names. The few that he sold for the huge sums of money were more than able to recover the costs of his new purchases and renewals. Also, nowadays, most domain names can pay for their renewal fees if you set up redirections.

And this brings us to another method people have used to earn from domain names – this is separate from buying and selling.

A steady earning through redirection

Domain name sales may get you a large one-time payment. But, as any wise man would tell you, nothing beats recurring income. A lot of owners simply set up redirections or advertisements on the domain names.

This yields a small but steady earning. Put hundreds of domains in the picture and you can earn a sizeable sum each month. Also, the domain name isn’t just “laying around” – it keeps generating money while you hunt for potential buyers. And how much can a domain name earn through redirection?

The one example that I know of, and one which was made public, is of sex.com. The domain name was registered by Gary Kremen through NetworkSolutions. It caught the eye of Stephen M. Cohen who clearly understood its potential. Cohen conned NetworkSolutions into believing that he is the rightful owner of the domain name. To cut the long story short, Cohen managed to gain control of the domain name and set up redirections, which got him close to $500,000 per month! If you think about it, those are huge earnings from a simple set up.

Side note: The sex.com domain name was embroiled in a much publicised lawsuit. Kremen was able to regain ownership of the domain name and Cohen was arrested. You can read all the details in Kieren McCarthy’s book Sex.com.

Obviously, not all domain names would be able to generate as much as sex.com. However, never underestimate the potential in a domain name. As long as you believe in your product and work a little, the results will show.

Where can you get domain names?

There are now hundreds of domain names registrars. The two I trust are www.GoDaddy.com and 1&1 Online Store. Both the companies have the lowest prices and offer tens of TLDs (third-level domains) some of which are great alternatives to the .com. These companies will also help you set up the domain name quickly so that you can start earning from day-one!

Read how can I make money from domain names for tips an advice.

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Your comments
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  • Christine Montes on February 11th, 2017 4:15 pm

    Great outlook and output on buying domain names!!!
    I’m well on my way for further information. Thank you

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