Making money from domain names

Real Estate Concept Australian DollarAlmost every day I get asked by someone what I do for a living.

If I say “I’m a domainer”, I’m almost guaranteed to get a blank look! And a follow up question of “what’s that?”. 🙂

This was always a challenge at first, so now I give an analogy – equating it with being akin to a real estate investor / developer. Except of course I do it in a cyber sense by acquiring “cyber property” i.e. domain names (instead of land or buildings).

So how do I make money?

It boils down to two simple ways. Rental income; or re-sale. And in most cases, a combination of both.

When I acquire domain names (and I do so almost every day), my first step is to “park” them with a specialist provider. The company I use is Fabulous.com. I’ve been with them for years – and whilst there may be better income generating companies out there, I appreciate the level of features their platform offers. Service wise they are fantastic too – simply a phone call away.

With a few clicks, I can have a landing page up and running in minutes. This has advertising links relative to the domain name (generally!); and I can also enable a “For Sale” or “Enquiry” banner should anyone wish to make me an offer.

Analogy: So to compare with a “property developer”, this is akin to having a vacant block of land that I charge people to park their cars on (pending future development or sale). And of course, I have my “For Sale” sign out the front to let everyone know it is for sale.

Does “parking domains” give a good return?

On some it does – and on others, it is minimal.  The majority of my domains earn just a few cents a day on average – and then I have some that make “dollars” per day! A few examples are:

workinjurylawyers.com.au – occasionally I can make more than $40 a day on this domain.

adelaidemassage.com.au – amazingly, this earns me on average over $5 a day. What do they do in Adelaide!

earlylearningcentre.com.au – good traffic makes this a consistent earner.

There are many others like these.

Importantly though, every single day of the year, I earn “parking” revenue from my domains. And with a large portfolio, this adds up.

Sale time!

Most importantly, my business model ultimately benefits when I decide to accept an offer for a domain.

By having that “For Sale” banner on each of my domains, I get offers to purchase every single day! If the offer is fair and reasonable, a deal gets done (generally a bit of back and forth negotiating goes on!). What assists me is that I have good “response templates” – with these I’m quickly able to reply to a prospective buyer with further information. Things like price expectation; sales comparisons – and very importantly how a transfer of “cyber property” works.

Many offers aren’t reasonable though, so these buyers get a very simple “No thanks” response.

Lately I find that I’m doing a lot more “terms deals” e.g. a price is agreed on, but the purchaser pays this off over 6 or 12 months. They get immediate use of the domain, but “title” doesn’t pass until fully paid for. I get my price – and the purchaser doesn’t have to make a big payment immediately. Win / win!

Some classic examples of these types of deals are: Logic.com.au & Road.com.au – I think it’s fair to say that the buyers of these premium domains are very happy. 🙂

Final thoughts

  • I am a domain investor, and I don’t have to sell. Nevertheless, I do love doing deals!
  • Nor am I greedy – I never put astronomic prices on my domains. My adage is that you always leave something in the deal for the next person.
  • To my mind, good “cyber property” bought at the right price should always appreciate in value.
  • Being a domainer is a great life – and you don’t need the huge capital resources of a property developer! Nor do you have all the red tape. 😉
  • The R.O.I. on a domain name sale compared to a real estate transaction is mind blowing!

7 thoughts on “Making money from domain names

  • tim
    July 14, 2015 at 12:25 pm
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    i really like the vacant block of land example

    nice article, thanks

    tim

    • Ned O'Meara
      July 14, 2015 at 6:05 pm
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      Thanks Tim.

      Definitely are a lot of similarities between real property and cyber property.

      Regards, Ned

  • Avatar
    July 14, 2015 at 9:09 pm
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    Thanks interesting article
    Leasing a domain? do you just change name servers to the buyer’s hosting?

    • Ned O'Meara
      July 14, 2015 at 9:19 pm
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      The two domains I referred to were sales Asantha – but on installment terms.

      But the same principle applies – I either change nameservers to their requirements; or I re-direct domain to their existing website.

      Important to have a good agreement though – my terms are all contained on the invoice. Keeps it simple!

  • Avatar
    July 15, 2015 at 5:58 pm
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    Interesting to hear that more of your sales are made on “payment plans”.

    Any chance you’ll be doing up a post about the terms you offer with your payment plans?

    ie what are the pros and cons of a payment plan.

    • Ned O'Meara
      July 18, 2015 at 8:10 am
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      I will put together something soon Chris. It’s a good idea for an article.

      Just did another one two days ago for a locksmith who bought city / town locksmith.com.au. Slightly different this one – he is paying weekly which suits his cashflow. He gets use of the domain – and I keep control until fully paid. Trully win / win.

  • Avatar
    July 15, 2015 at 7:02 pm
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    A good read. Funny when people send you offers in the hundreds, as though you could be bothered transacting alone for less than $1,000. Few buyers understand the impact a good name will have on their bottom line, even fewer how to defray the costs over time. Everyone wants a bargain, but when there’s only one name you need and other people want it, the new ‘bargain’ is being able to buy the thing to begin with.

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