Flipping Expired Domain Names

Flipping expired domain names can be profitable, very profitable. Recently, I purchased two expired domains names. I paid $6,400 for the one domain at an online auction. Once I controlled the domain, I set up a very simple WordPress website with my favorite theme for reselling domains, fielded some e-mails and calls, and resold/flipped the domain for $15,000. That’s a 134% return in just a few weeks with about five hours of work involved. I made $1,720 per hour for my efforts. I can get excited about going to work for that hourly wage!

I paid $160 for the second domain, received an offer of $1,500, and easily could have negotiated the price up to $2,000-$3,000, but decided to keep and develop that domain name. Even if the potential purchaser had offered me $4,000 or $5,000 for the domain, I’m not sure I would have sold it. I believe by building a website around this domain, it’s possible to juice those returns many fold and for many years.

The key to flipping expired domain names is having the experience and knowledge that it requires. You don’t have to be a genius and the examples I sited above could have been done by nearly anyone. The key is taking the time to understand what types of domain names have value and figuring out who the people are that will be willing to pay you the big bucks.

Flipping expired domain names is different than buying, hand-registering, domains that no one currently owns, or has registered. Personally, I’ve had some luck flipping some domain names that I’ve hand-registered. Hand-registering a domain name simply means you go to a website such as GoDaddy, type in the domain name that you’re interested in, and see if it’s available. If the domain is available, you purchase, or hand-register the domain for about $10. I wrote an article in the past about selling a domain name for $1,800 that I had purchased for about $8.

Expired domain names are domains that have been registered by someone. Some of those domain names had been used as the basis for websites. Some were just being forwarded to a site, and most often, expired domains were sitting dormant and not being used. In any event, the person or entity that had control of the domain name decided not to pay the yearly registration fee. If you don’t pay the yearly fee, the domain name “expires” and is often placed on a domain name auction site such as Namejet.com. Bids, called backorders, typically start around $69. Once you agree to pay a minimum backorder bid, you’ll be entered into an auction with the other bidders. The highest bidder “wins” the domain name. This is the process I went through to purchase the domain names sited above.

There are many thousand expiring domain names at any given time. You’ll need to figure out which of thousands of domains may have value to an end user. I think it’s best to find a niche in which you have an advantage in some respect and know something about. The other option is to keep track of hot new topics and products and find relevant domain names.

Without giving away too much, I search Namejet.com (there are other sites offering expired domains) and look for domains starting with the city in which I live. I also search for domains that start with the name of nearby cities. I’ve had more success flipping domains to people that live in the same part of the country that I do. Find a niche industry/business in which end-users, either individuals or companies, earn healthy commissions. It may be the insurance industry, real estate, finance, etc. There are many other different areas to consider.

To take some of the risk out of this process, some people start marketing the domain name once the online auction starts (on Namejet, once the auction begins, no one else is allowed to bid on the domain), even before they “win” the bid. If they can find an end-user quickly and know how much he or she is willing to pay, that in turn will dictate how high they’ll bid on the domain at auction. If they can’t find an end-user during the few days the domain is at auction, they just don’t bother bidding on the domain. With this strategy, a person will have to be careful not to bid too high just because they’ve got a verbal commitment from an end-user. I don’t personally use this method because I’ve got enough confidence that’ll I’ll be able to flip whichever name I’m bidding on or enough cash on hand to buy it and sit on it if need be.

If you are the “winner” of the domain name, it should be transferred to you within a few days of payment. Once it’s in your account, it’s time to begin marketing the domain to an end-user. As noted in the beginning of this article, I think this WordPress theme is perfect for pointing out all the benefits of purchasing and owning the domain name that you’re trying to sell. It’s possible that by setting up a simple site to market the domain that you may even have end-users contact you. I was fortunate enough to have several interested parties contact me about the domain name that ended up selling for $15,000.

Once I own the domain and have set up a website (setting up a website is not critical), I use the domain’s keywords and plug them into Google, Bing, and Yahoo. From there, I make a list of the people and companies that are using similar domain names for their websites, but not as good, and the entities that are paying for ads, and the ones that may not be ranking organically as high as they’d like. I send short, individual e-mails out to these people and companies. I also direct them to the website that I’ve set up in advance. That website will include a number of easy to understand bullet points pointing out all the benefits to the end-user.

If all goes well, I have end-users contact me and we work out a licensing deal (Licensing a Domain Name) or a sale. You can use the licensing angle to work out a better deal for yourself with the sale. Licensing a domain name instead of flipping it has it’s advantages as well, but that’s a completely separate topic. I hope you’ve found this helpful!

Update September 28, 2015:  In regards to the domain name for which I paid $160 and is mentioned near the top of this post, I tried partnering with someone. That person was not receptive or responsive, so I offered to sell the domain for $4,000 to someone else. That person accepted and we closed the deal shortly thereafter. I spent a grand total of $6,560 for both domains, sold them for $19,000 and was left with a profit of $12,440 for about four hours of work. That’s over $3,100 per hour of effort, not too bad.

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One Response to “Flipping Expired Domain Names”

  1. Donald says:

    I think in general the domain parking model for exact match domain names doesn’t work anymore. Before you buy it, you have to have a plan to flip the domain, or else spend some legitimate time and resources developing it. I learned this when I bought and ending up later re-selling footballhelmets.com.

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