Timing is of the essence when purchasing domain names. Domain names are a very unique product in the fact that the product doesn’t exist until someone creates it with a domain registration. Many people purchase domain names with the intent of reselling them for a profit to those who were too late to the game. The domain industry can be extremely lucrative for experienced trend forecasters and others who find themselves in the right place at the right time when buying and selling domains. 

Buying and Selling Domains

Domain investing is a niche market. The domainers who have been in the industry since the Internet began, have profited from selling premium one-word domain names for six figures and higher. Take, for example, Insurance.com, one of the highest recorded domain name sales of all time.

What makes insurance.com such a remarkable case is that it was initially registered in 1994 before e-commerce became mainstream.

The domain owner trusted his instinct in buying and selling domains and patiently held onto the domain name for 16 years before the investment paid off.

Cybersquatting vs Domain Investing

Domain investors profit from buying and selling domain names acquired fairly and in good faith. A cybersquatter is someone who registers a domain name in bad faith and with intent to profit from the goodwill of a trademark belonging to someone else. Unlike cybersquatters, successful domain investors are experienced professionals who have a well-rounded understanding of the market and the legal nuances associated with buying and selling domains.

Tips for a Fircely Secure Transaction

1. Avoid Intellectual Property

New and inexperienced domain investors sometimes fall into the category of cybersquatting simply based on lack of knowledge in buying and selling domains. Many newbies think that any domain name that is available can be registered and sold for a profit, including trademarked names. Seasoned domainers understand the difference between infringing on a trademark and capitalizing on an untapped opportunity. The success of a domainer directly correlates with his or her ability to get ahead of the trends and capitalize on generic terms rather than intellectual property. 

2. Always Use an Escrow Service

With all of the advanced social engineering, phishing, fraud, and malware tactics out there today, it is extremely important to protect yourself. Domain names are a target for criminal schemes, whether the domain name was stolen or someone is trying to chop a new seller off for a quick buck. Using an escrow service is the smart move for both buyer and seller. You’ll want to negotiate who will pay the escrow fees (usually 5-8% of the transaction amount).

Here’s how it generally works:

1. Set up the transaction
2. Both parties buying and selling domains agree to the terms
3. Buyer funds the transaction through the escrow service
4. Escrow service confirms the funds were received and clear
5. Seller transfers the domain to the buyer via the escrow service
6. Buyer confirms they received the domain
7. Funds are released to the seller 

3. Shield Your Identity

We like to say that domain names predict the future. Having a pulse on domain name sales is a really great way to get a glimpse of a brand’s future business plans. If you want to be discreet about your secret project or plan there are ways you can acquire domain names anonymously. We offer a domain concierge service in which our team of experts will contact and engage a seller buying and selling domains and work to get the domain name for you while keeping your identity private throughout the entire process.

4. Be Cautious of Crypto

Crypto is a powerful tool and we are all for supporting new technologies, like the Ethereum and .luxe partnership. However, we have become aware of a new scam targeting people buying and selling domains. You should be aware of this scheme so you can protect yourself from becoming the next victim. Crypto appears to be at the heart of the scam as described by a Namepros member DNCafe:

That seems to be the scam, using stolen credit cards to buy sought-after domains that will sell fast, push to the users GoDaddy account, have the buyer approve the escrow and get your Bitcoin return….all before GoDaddy has caught the stolen credit card.

Buying and selling domains can be a very rewarding hobby, side hustle, and full-time business if you take the steps to secure your transactions and stay safe.