Earlier this week, Namepros.com member Randomo revealed that he sold exactly 1,700 domains in 2007 mostly through quick turnaround sales (domain flipping). At first glance, 1,700 domain sales would seem to equate to easy profits but a closer look at the numbers reveals that flipping domains is, in fact, hard work.
First off, in order to sell 1,700 domains in a year, one would have to average just under 5 domain sales per day (7 days a week). Flipping 5 domains a day is one thing, getting high sales amounts for all of them is another. Randomo was kind enough to disclose that his average selling price was 3 to 5 times registration cost. This exact amount is open to interpretation but when totaled up, it appears that he was able to generate somewhere between 50k and 70k in revenues through domain flipping. These are my estimates based off the information provided.
To determine profitability we need to factor in the acquisition costs for the 1,700 domains that were sold. Again, the exact figures were not provided but I can safely assume a minimum of 12k if all domains were bought at standard registration fees and perhaps as high as 22k if the average domain acquisition cost was $12.95. Deducting the acquisition costs reveals the domain sales profits to be somewhere between 28k and 58k. This is a very wide range but it should be helpful in determining a worst case and best case earnings scenario.
The last factor we’ll consider when it comes to domain flipping is time. After all, these domains don’t find themselves. Once registered, it also takes time to market and sell them. Receiving payment and transferring domains to a buyer’s account isn’t always the smooth transaction that one would hope for. Randomo estimates that on average, he spends between 3 to 6 hours a day domaining. That comes out to 4.5 hours a day or roughly 1642 hours a year.
Great article, information. In order to do domain flipping I suggest first finding buyer/s. They are all over the place, especially for x2-x3 registration fee. Many will let you send them a list to go over before you even register the domain, letting you make money without taking a penny out of your pocket.
How do you find these investors? Message boards, WHOIS. Top investors understand the issue of lack of time on their hands to do it all, and will be willing to compensate you for your work.
More on the link above, or visit the related NamePros thread here (I suggest visiting both).
Yea, great, but how many domain names did he buy and NOT sell?? If he was lucky enough to sell 1 in 3 domains for example there go all of his profits.
Spend your time developing 3-4 sites folks and you’ll be much better off…
-M
“Yea, great, but how many domain names did he buy and NOT sell?? If he was lucky enough to sell 1 in 3 domains for example there go all of his profits.”
2007 totals:
Domains sold = 1,700
Domains unsold and dropped = about 300
So the unsold domains _did_ affect my profits, but not by nearly as much as that person speculated.
I do agree with their main point, though, and plan to spend more time developing [and also selling to end-users] this year.
-Randomo
Flippers in my experience are either conmen or fools. Most of the stuff out there being flipped is worthless junk, but there is value in some niches. There are Chinese IDNs being flipped by local for a quick buck. These guys will probably regret many of their sales later on.
He let 300 domains drop in 2007. So we’re looking at an additional expense of approximately $2100 which wouldn’t change my numbers very much. Very efficient, he must really be in tune with his buyers!
-Bill
“Flippers in my experience are either conmen or fools.”
Well, I’m all too honest, so I guess that only leaves one possibility …
I view myself as being like a gold prospector in the old west. I unearth some nuggets and take them to the assay office, where I’m paid enough to feed me and my mule, with a bit left over. That buyer aggregates the nuggets and sells them to a jeweler, who melts them down, makes them into pretty things, and sells the jewelry for breathtaking sums.
My goal for this year is to move further up that ladder - spend less time rooting around in the dirt and more time selling high-priced trinkets to the jeweler’s customers [end users]. But it’s hard to ignore the half-buried nuggets winking up at me ….