Make Money with Expiring Domain Name Auctions

Every afternoon around 2PM EST, one of the hottest auctions on the internet is taking place at a little known site called NameJet.com. Every day it’s the same small posse of bidders competing, yet prices routinely go into the tens of thousands of dollars per item. And most amazingly, those bidders are competing to buy something that someone else has thrown away.

Welcome to the bizarre world of expiring domain name auctions. Long the exclusive domain of professional domain investors, today expiring domain names are ripe for the picking by anyone who’s savvy enough to know the value of a good domain – and who knows how to work the auctions. Sites like SnapNames.com, GoDaddy.com, and NameJet.com auction off thousands of domain names every day. All you have to do is sign up for an account, and you too can be playing the domain name investing game. As multimillion dollar domain sales like Vodka.com or Toys.com can attest, there’s gold in them thar hills – but as with all investing, making a hefty profit relies on your ability to buy low and sell high.

Using the techniques in this article, you can get started with one of the easiest ways to make money online: buy quality domain names “wholesale” at expiring auctions, sell them “retail” through sites like Sedo.com, GoDaddy.com, and Afternic.com. It’s similar to flipping houses, but the capital required is a LOT less!

I’ve been buying at expiring domain name auctions for 5 years, and along the way I’ve learned several tricks to help you get the most valuable domain names at the best possible prices:

  • Don’t place a “backorder” for a domain until the last possible second. On NameJet and SnapNames.com, you need to place a backorder for a domain before being able to participate in the auction. Stated otherwise, the number of backorders placed equals the number of competing bidders in the auction. Hint: you want competition to be low. Placing a backorder for a domain is like holding up a big neon sign that shouts, “AT LEAST ONE PERSON THINKS THIS DOMAIN IS VALUABLE!” Many domain investors avoid the hassle of having to filter through long lists of expiring domains by only looking through the domains that someone else has already backordered. Some compete on almost every domain someone else has backordered. If you spend hours filtering through lists of expiring domains to find the handful of gems, don’t let others freeload on your hard work!
  • Use domain analysis tools to find the hidden gems. Thousands of domains is a lot to look over if you’re just hoping that one will catch your eye. One of the best investments you can make as a domain investor is to use automated analysis tools to help filter the lists of expiring domains to find the best ones. I use Freshdrop.net— it’s not cheap (currently $98.95/ mo.), but saves me hundreds of hours of time by allowing me to filter and sort domains by criteria like domain age, number of incoming links, or number and value of keyword searches. Some cheaper alternatives include DropDay.com, PremiumDrops.com, and DomainResearchTool.com. The latter is a downloadable application that allows you to analyze any list of domains, while the first two are focused on domains expiring at the major auction houses.
  • Go where the Big Money isn’t. NameJet.com usually has the most high quality domains on auction. Unfortunately, that also means that NameJet rarely offers any good deals. Every day of the year (even holidays and weekends!), professional domain investors monitor the NameJet auctions, ready to pay top dollar for the best domains. You can usually get much better value by monitoring less popular auctions like TDNAM.com, Name.com, or Afternic.com. On these sites really quality domains are somewhat rare, but when they do come through you’ll likely have a lot less competition bidding for them (and thus also a much lower price!).
  • Don’t get too attached to any one domain. Remember the Auction Winner’s Curse: in highly competitive auctions with limited information (such as domain auctions), the winner often overpays. It’s a good idea to estimate a “market value” for a given domain when you’re still thinking clear-headedly (eg, before an auction gets too heated). Once the bidding begins to approach your estimate of the domain’s market value, it’s time to drop out. After all, you’re in this to resell domains at a profit, aren’t you? Don’t assume that the other bidders know more than you just because they’re willing to pay more. Often they already have an existing business related to the domain, or they may just be a clueless n00b with more money than brains. If you’re focused on maximizing resale profit potential, you’ll probably find yourself winning in about 10% (or less) of the auctions you enter (yes, that means that in my opinion in 9 out of 10 (competitive) expiring domains sell for close to, or more than, the domain could be resold on the open market. So much for expiring domain auctions being an “insider’s secret”!)

That’s it, apply these secrets effectively and you’ll be ahead of 80% of your competitors in the expiring domain auctions. The only other skill you need to know is how to identify which domain names are most valuable, and you’ll be well on your way to making money as a domain name investor!

AUTHOR BIO
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Kevin Frost earns his living buying and selling domain names, and enjoys teaching others how to find their own path to Making Money Online.

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