Domaining: is it possible to earn money by selling domain names?
Interview with domainer David Chelly on the little-known domain name selling industry.
Often associated with cybersquatting, phishing, or contacted when a domain name is not available, the profession of domainer is hardly or poorly known among the general public. Nevertheless, by buying and reselling domain names, domainers represent a significant part of the overall domain name economy.
Or at least this is the image one would like to project considering some spectacular domain name sales.
What does a domainer’s job involve and what does the future hold for this industry? How to understand the success stories linked to the sale of domain names?
The domainer’s job between myth and reality
A promising start before 2010
It was in the early 2000s that the profession of domainer made its appearance. The concept is simple: buying and reselling domain names. The availability of a domain name is essential for any company. By acting as an unavoidable mediator, the domainer makes sure to resell the domain name previously purchased at a higher price.
This practice is one part of the profits received from the sale of domain names. However, we all agree that the time between the purchase of a domain name and its resale can be long. This is why, until 2010, domain name holders could use their domain names as a “parking page”. This meant that these pages were used to display advertisements that generated income for the owners (the domainers).
At that time, the domainer profession was more lucrative and prolific than it is today. It enjoys a modern image, placing a high value on domain names. The domainer’s profession was considered to be an Eldorado. Especially in the United States, where many success stories have emerged featuring domainers who have made a lot of money, as David Chelly explains:
“More often than not, the reality is romanticized to a minimum, taking great care to choose heroes who look like everyman (…). For example, the emphasis was placed on the great success of the famous Frank Shilling, whose parents sent him to Canada when he was a child to escape communist Germany (…) Rick Schwartz, a ruined salesman (…) or the visionary character of Scott Day, a former watermelon farmer. »
After 2010, the domainer industry: a declining sector
Over the years, digital legislation has evolved. Unfortunately for domainers, these changes have been made at the expense of their business model. Indeed, from 2010 onwards, the incomes generated by the “parking pages” will fall sharply. A decline that will not improve the status of the domainers since parking pages allowed them to ensure a stable income.
Today, the sources of income are weak and the real players in the domaining sector are becoming increasingly rare. In fact, as David Chelly says :
“At least 99% of people who claim to be domainers stop working as soon as the first renewals occur, or before”.
Domainer, always a burning issue
Amazing sales…
Although the domain name business is no longer as flourishing as it once was, some sales of domain names are still generating serious profits. Relayed on several media, they always provide a combination of credulity and enthusiasm. How can the sale of domain names reach tens of millions of dollars?
The latest one is voice.com. Sold in 2019 at 30 million dollars, it is the most expensive domain name ever sold. Closely followed by 360.com then Sex.com sold at 17 and 13 million dollars respectively.
There are actually many rankings of record domain name sales in the world. The truth of these rankings can still be challenged as many sales are taking place away from the public. In any case, the figures reported are official and give an idea of the (perhaps fictitious) value of some domain names.
To be put into perspective
If some sales may seem excessive, it may be because they are. In fact, some sales, through their excessive media coverage, make it possible to enhance the value of an extension, a market, etc. According to professionals, some sales are actually “communication hits” and do not reflect the real health of the market.
“One of the best-known cases was the alleged purchase in 2006 by Rick Schwartz, self-proclaimed “Domain King”, of the domain name flowers.mobi, for the modest sum of … $200,000! Even though all participants were shocked by the poor acting of the protagonists in this sham auction, the sale was indeed published and even relayed by the media around the world, giving an exceptional boost to the MOBI extension, which was obviously the aim of the operation. »
By artificially increasing the value of a domain name, the benefit is twofold: on the one hand a higher sale, and on the other a gain of visibility.
These practices are not uncommon and make it difficult to get a good reading of the market.
The final word!
So, is it possible to make money by selling domain names? We would be tempted to answer yes. Finally, the domain name sector is no exception to the majority of businesses. Admittedly, since 2010, the sources of income have been limited and the sector considered to be prolific is much less so today.
Some resellers manage to generate a significant activity and to make a living out of it, but this is a minority. As David Chelly says:
“For my part, it’s more of a hobby, the market is not fluid enough to make it its main activity. I recover and sell a few thousand domains a year, but the margins are very low and the activity is time-consuming and difficult to automate”.
Netim works with many resellers and has a dedicated program (API, white-label, etc.). If you would like to find out more, check out our reseller program.
