If you frequent sites that discuss the domain name industry, you’ll likely come across the term “flipping”. It’s often associated with the term domain name speculation, is where a party registers a name with the intent to resell it at a later date.
Domain flipping was a huge business some years ago and is still popular today, as evidenced by the large number of domains registered that have no real site attached aside from a page of ads and/or an invitation to make an offer on the name.
Those who engage in domain flipping are known as “domainers”. For some it is a part time pursuit providing a little extra spending money and for others it’s a full time enterprise that returns hundreds of thousands of dollars a year; although the latter is relatively uncommon.
For many who attempt to enter the industry, spurred on by the lure of stories of people making millions, their efforts will often leave them disappointed and a little poorer than before – it’s by no means an easy business.
Domainers look for available names containing generic words and may keep a close eye on industry publications for new terms that evolve and register those as names. Others haunt domain marketplaces looking for bargains. “Bargain” is a relative term as some participants are well cashed up and think nothing of spending thousands on a name if they know they will be able to resell it at a much higher price.
When a name is registered, little may be done with it prior to resale except to “park” the name using various services that will run ads on the domain, from which the registrant will receive a share of the revenue.
Other domainers will build a site related to the theme of the name, usually using a well-worn template approach, making development a very quick process. After that, it may be advertised for resale straight away as a “turnkey” web site ready to operate, or it may allowed to sit for a while to become established and build up traffic. These “value adding” strategies may take little effort, but will often maximise returns on the domainer’s investment.
While domain flipping is quite common in relation to TLDs such as the com extension, domainers need to be a little cautious attempting to flip some of the various ccTLD’s (country code Top Level Domain).
A case in point is the Australian extension,.au. According to.au registration eligibility criteria, registering Australian domain names for the sole purpose of offering them for resale or transfer to another party is prohibited.
