It’s the dream of many web based entrepreneurs. They register a domain name, and at some point a big company comes around and offers hundreds of thousands of dollars for it.
This dream is the basis of a growing number of ‘get rich quick’ schemes being marketed on the internet. The premise is simple. Register a bunch of domains that others might find useful, put them up for sale, and sit back and watch the offers fill up your email box.
Like most ideas that offer quick money for little effort, the domain ‘buy and flip’ concept mixes a bit of reality with a lot of conjecture and wishful thinking. The truth is that most domains hold very little value for anyone other than the people who registered them. The vast majority of high value domains were registered in the first domain ‘gold rush’ back in the nineties. While it is still possible to secure a hidden gem, a high degree of luck and a lot of hard work is required to find unregistered domain names that have any value on the domain aftermarket.
Even after you find what you believe is a good domain name that warrants someone paying over and above registration cost, you have to market it. While there are good, legitimate aftermarket sites out there, such as Afternic and Sedo, you will be competing with millions of other names for a share of the market.
That being said, there are people making money selling domain names on the aftermarket. Most of the memorable, brandable dot com domain names were taken years ago, so there are many individuals and organizations willing to pay hundreds and even thousands of dollars on the domain aftermarket to secure a domain name that fits their needs.They rationalize that the value a good domain name brings to their web marketing efforts more than offsets this initial investment.
Web developers in particular have an added advantage in the domain aftermarket. They are able to add value to a domain name by building a site for it and attracting traffic. As the aftermarket for domain names increases in competitiveness, having a domain name with an established ‘brand’ and existing traffic increases its resale value. A case in point is Ebay.com; before it was developed, such a domain name had a value in the hundreds, possibly thousands of dollars. Try buying it now for that amount!