As the title suggests, our latest article is all about providing those helpful tips that can make the difference between a good decision and a bad one when it comes to trading domains. Many of the points within this article are good practice for any form of investment and you will notice this as you read on.

Earlier in the year, we discussed how much the domain market is worth and we discovered some truly astonishing numbers. Did you know calculations at the time of writing that article put the domain market at a potential value of $249 billion dollars? What an incredible market, full of potential!

This shows the appetite and chances for profit in such a dynamic field and is one of the reasons why the team at Cloudname have developed our all-in-one domain trading platform. We’re helping people realise the potential rewards of buying and selling domains.

Given the rewards and also risks involved in domain trading, it is essential to do the research and gain a full understanding prior to making any investment decisions. As a result, we’ve put together this helpful top tips article for those looking to buy and/or sell domains.

Why would you want to buy and sell domains?

The sentence above talking about $249 billion is a big enough reason for many to consider buying and selling domains. However, there are actually plenty of fundamental reasons why people choose to undertake such an activity.

Whether an individual looking for some extra income or a professional aiming to build up a portfolio, let’s explore a few of the reasons below.

Buying domains

Build or diversify your portfolio: If you’re looking to build or diversify an investment portfolio then buying domains is a fantastic way forward. It is becoming a genuine, mainstream option alongside more traditional investments like property and shares.

Start or expand your business: Every business needs a website and it may be that your perfect domain is taken. If so, you may be able to buy that domain from the current owners and potentially even take advantage of the existing SEO that has been built up.

Protect a brand: With the increasing shift to blockchain technology and e-commerce, it is becoming harder to protect a brand. For those worried about it, you can buy domains up to ensure you have control over a domain that looks similar to your existing brand. Equally, it might help your business or brand to diversify into new areas such as cryptocurrency and Web3.0.

Selling domains

Make a profit on domains you own: An easy and relatively obvious reason why people sell domains, but worthy of comment. For those out there who are new to this world, it is a great way to make a profit if you do your research and don’t just rush in thinking you can make a quick buck.

Free up funds to invest in other domains: Domains can be a risky and expensive investment, so you may wish to free up funds by selling a domain that you currently own. This is a good way to ensure you use funds you can afford to risk or ditch riskier domains that may lose you money in the future.

Diversify your portfolio: One of the best ways to reduce risk is to diversify your portfolio of investments so you’re not relying on the performance of one market, one niche, one country. Diversifying to different markets or different types of investment may require you to sell domains to then invest in other areas.

So what are the top tips for buying and selling domains?

Now that we’ve introduced you to the idea of buying and selling domains, as well as reasons why people choose to it’s time to check out those top tips towards success. 

Do your best to stay focused

If you go into domain trading with a scatter-gun, random approach then the likelihood is you will lose more than you gain.

By trying to narrow your focus and think about a particular industry, niche or sector that you have some experience of then you will start off in a much stronger position. The reason for this is that you will be able to more confidently perform keyword research, assess the importance and relevance of searches and the performance of existing domains.

Equally, if you’re trying to sell a domain then the more you understand it the easier it will be to connect with the right customers. You will be able to develop its authority more effectively and target prospective buyers in the right way.

Understand the value of the domain

A domain’s value can be hard to calculate because of the various characteristics you must take into consideration.

Firstly, you need to understand the industry or niche that the domain resides within so that you can understand whether it is a growing market with demand or potentially one that has reached saturation.

Furthermore, for both buying and selling a domain you need to have a clear picture of its performance with search engines. A highly optimized domain will drive up the price, which as a seller is a good thing or may even mean you get a bargain if it’s for sale at a relatively low value.

Other characteristics you should consider in order to understand the value of the domain include potential brand connections and the popularity of it’s TLD (Top-level domain).

Do your research

True for any decision you make within the world of investment. If you’re going to risk money by buying a domain, or perhaps want to ensure you sell a domain for the best price then you need to do as much research as possible.

When buying or selling a domain, think about researching:

• – The health of the domain including authority with search engines
• – The industry or niche that it is connected with
• – Similar domains that have been bought or sold recently
• – Keywords that are researched and how the domain could take advantage of that

No matter if you’re trying to buy or sell, researching these points is important and will play a significant role in deciding if you pay or receive the best possible price.

Promotion is key

If you’re buying a domain then you may think promotion isn’t entirely relevant. However, it is important to think about what you will do with the domain once you’ve bought it. Promoting it is important if you wish to build up its value to then sell on or perhaps use it as a landing page for your business.

For those looking to sell a domain then promotion must be considered as a way to drive up the value and get as much interest as possible. Promotion whilst owning it will help improve the health and attractiveness of the domain and by getting more people interested in buying it, you can potentially have people bid against each other.

Think about the long term

You will get warnings on almost every webpage and article about domain trading, specifically that buying and selling domains is a long-term game for those wanting to make money.

The idea of flipping domains or quick wins isn’t realistic and whilst it may happen sometimes it is far better to plan for the long-term. If you’re buying a domain then be prepared to wait months and maybe even years for it to increase in value.

Should you be looking to sell domains then it may take time to find an interested buyer, or perhaps you will need to spend time and money on developing the authority of the domain in order to get a price you’re happy with.

Use the right platforms

You will want to promote your domain on social media and forums when it’s time to sell a domain but before you can begin to buy or sell one, you need to decide on the best platform to use.

There are various platforms out there for trading domains such as Namecheap and Cloudname. Always do your research on the best one for your individual requirements and look to see which has your preferred domain if you’re looking to buy.

One great feature of Cloudname is that once you own a domain, you can transfer it to the Cloudname system and manage everything in one place. This will make life a whole lot easier if you wish to manage a portfolio of domains.

Are there alternatives to buying or selling domains?

Yes! There are in fact two fantastic alternatives to buying and selling domains that many readers will not be aware of. In the same way that you can rent a property or buy shares in a company, you now have the ability to do these things with domains and that opens up a whole host of new investment possibilities.

Domain rental

If you own one or more domains and you wish to make money from them, but don’t wish to sell then renting them out is the answer. Imagine being a new business in need of the perfect domain but without the expertise or funds to start SEO from scratch. Being able to rent one from an owner that is already established will save time and money.

This is becoming a more and more desirable option for people, making it a great time to take advantage if you currently own domains.

Domain tokenization

An even newer concept in the world of domain trading, tokenization can be thought of in much the same way as buying shares in a business. It is often referred to as fractionalization.

Imagine there is a domain that is worth $100,000. That is clearly far too much money for many smaller investors out there and could be hard to buy or even sell as the owner. By tokenizing it, you can sell 100 shares worth $1000 to 100 people.

This instantly increases your chances of generating funds because you will open up the market to potential buyers. We’ve got a helpful article on this topic here if you’d like to know more.

A final thought on buying and selling domains

The opportunities available to those wishing to buy and sell domains are clear to see. Just like in any other form of investment, it is vital to always think about how best to mitigate risk and maximise profit.

By exploring the best tips and tricks for buying and selling domains you can do just this. When you’re ready, head on over to the Cloudname platform and start your investment journey!