What is domain trading

what is domain trading

Domain trading is the process of buying and selling domains, often with the goal of making a profit or as part of growing an investment portfolio.

No matter the reason for engaging in this activity, there are some fundamentals you should be aware of so that you can be successful at domain trading.


What is a domain name and what domain extensions are available?

A domain is a series of characters that points to a particular website or cryptocurrency wallet, in the case of crypto domains. As a result, you can think of a domain name as the address for the online home of your business and a reflection of your brand or identity.

Each domain is unique and it can often be a challenge to find the perfect domain name for your latest project. There are some key rules to follow if you want to find an effective and memorable domain name and these are as follows:

  • Make it memorable and brandable
  • Make it easy to spell and easy to pronounce
  • Make sure it doesn’t conflict with existing brands or trademarks
  • Make it relevant to your keyword or industry where possible

Understanding the different TLD extensions

You will spend the majority of your time thinking about the name of your website, the part of the domain between the www and the .com. This is understandable as it is how your website and potentially your business will be known, but there is more to a domain name than this.

There are different types of top-level domain (TLD) extensions available and these are the final part of the URL, with the most common TLD being .com. These TLDs can be broken down into two main types:

Generic Top-Level Domains (gTLD) are the most common, frequently used TLDs and include .com, .info, .org etc. They have been around for a long time and do offer a degree of trust to consumers but as the internet has got bigger and more competitive there is a new range of TLDs to choose from.

These include gTLDs like .blog or .tech and offer a way to get even more creative with your domain name.

Country Code Top-Level Domain (ccTLD) are restricted domains in the sense that they are to be used in a specific country. For example, for the UK would be .co.uk and Canada would be .ca.

These are fantastic choices if you can’t get the .com equivalent but if you’re aiming to have an international appeal then it may put some others off.


What are the characteristics of a domain worth trading?

Do you have a domain that you’re thinking about trading? Or perhaps you want to get into domain trading as an investment opportunity?

Either way, understanding the characteristics of a domain that make it worth trading is the key to success. Just like any other form of investment, research and understanding help reduce the risk and increase the chance of making money.


Is it brandable?

A domain is so much more appealing to investors and existing businesses when they can see it has brandable potential. Will customers be able to connect with the domain on an emotional level in the same way they do certain products?

If they’re able to do this, then that increases the value of a domain and makes it worth trading.


Does it have links and SEO value?

If you want to flip a domain or you have a long-term domain that you feel is worth trading then the stronger its SEO performance and links the better.

When an investor looks at the characteristics of your domain and sees performance in keywords and authority with search engines then this will make them more likely to pay a higher price.


 

Is the domain short and generic?

No one wants to have to remember a long, complicated domain name. It’s easy to get it wrong or forget part of it and the potential customer ends up on the wrong site or goes with a competitor.

By going for a short, snappy domain then it will be more marketable.

The more generic a domain is the wider reach it has and that increases its appeal to potential buyers. For example, if you have a domain including the term ‘carsales’, then you narrow down your potential trading partners.



How many times has it changed owners?

In a similar way to a car, the more times it has changed owner then the potential for there to be problems!

For example, the more times a domain has been dropped, the lower the domain value as Google may think it is less trustworthy than other domains.

There are situations where this isn’t a massive red flag and you should balance this out against the other characteristics of the domain. It may be that it still has enough value to be worth trading or adding to your portfolio.


Are there any red flags on Web Archive?

You should take the time to check for any red flags on Web Archive, such as whether it has been hacked or was inactive for a long period of time. It may also be that the domain has drastically changed appearance and content and you should consider why this is the case.

The benefits and risks of domain trading

With any form of trading or investment, there are both benefits and risks to consider before making any decisions.

Domain trading offers a fantastic alternative to traditional investment or business activities but there are no guarantees you will make a profit on each trade.



Benefits of domain trading

The benefits of domain trading fall into two main categories: short term and long term. As entrepreneurs, established businesses and personal investors we set different targets for domain trading.

  • Short-term domain trading, often known as ‘flipping’ is the buying and selling of domains in a similar way to shares in a company or a house.

You can buy a domain that is relatively cheap, add value via SEO and then sell it again for a quick profit if the market allows. For example, domains such as toys.com and slots.com have all sold for over $5 million.

  • Long-term domain trading is for those with a long-term plan in place. Buying a domain with a view of reselling it in a year, 5 years or 10 years time at a much higher level. 

This allows people to build up investment portfolios to generate future income, create a passive income or hold assets as a safety net.


Risks of domain trading

The risks of domain trading reflect those risks found in any other form of investment. There are no guarantees that a domain you buy, will go up in value in the short or long term. It is important to trade in a responsible and intelligent way to help mitigate these risks.

Here are a few steps to follow with every domain trade you undertake:

  • Do your research on the domain in question. Look at its SEO performance, current design and use, and reputation via customer reviews.
  • Do your research on the industry that the domain is linked with if it isn’t generic. Is the industry going through a period of growth? Perhaps it is a relatively stable option that means less profit but less risk?
  • Take the time to plan your finances. Understand what you believe the domain is worth if you’re buying or selling. Understand what you can afford to risk and potentially afford to lose.

What other options are there for generating revenue through domain ownership?

You may now be comfortable with the basics of domain trading and what to look for when searching for an investment opportunity. However, there are some alternatives to the standard buying and selling of a domain and these include tokenization and domain rental.

Tokenization uses blockchain technology to let you turn a domain into a series of tokens, that can then be traded.

This is a great way to fractionalize a domain that may cost too much or perhaps you wish to raise funds without selling the entire domain. We’ve got a great article here on this topic if you’d like to find out more.

Rental is for those that are uncertain whether to buy or sell a domain, or perhaps those who want to generate a consistent revenue stream from their domains.

By allowing others to rent your domain, they can use it for their business and then either stop the rental at the end of the contract, renew or buy it outright.

You can find out more about the benefits of this approach here.

Authority or Affiliate sites are an option for those wanting to trade domains and then use them to build up affiliate marketing revenue.

By researching domains in the same way as when you want to buy/sell them, you can see whether they offer a good platform for generating passive revenue via affiliate marketing.

I’m interested in domain trading – where can I find domains to trade?

The next step in your domain trading journey is to find a platform from which you can begin trading. There is a range of platforms out there to choose from and we’ve put together some information on three to help you out.


Cloudname

Cloudname is a revolutionary new platform that has been purpose-built for domain trading. It is a platform for registering a domain and then trading it on our bespoke marketplace.

You will be able to interact with buyers, sellers and renters without having to use external forums and websites.

Cloudname also allows you to tokenize your domains via NFTs, allowing for distributed ownership of high-value domains.

This platform uses Artificial Intelligence to analyse and understand the market, making it easier to value your domain and make a profit from your domain trading.

You can find a fantastic breakdown of the key features and benefits of Cloudname here.




Expired domains

Expireddomains.net is a domain name search engine that allows you to search through thousands of expired and dropped domains. You can sign up for a free account that allows you access to more features and they currently support close to 500 TLDs.

You can search through pre-populated lists such as GoDaddy Featured Domains or Catched.com Auction Domains.

Alternatively, you can search through tables of millions of expired and dropped domains and see the number of backlinks for each and the domain’s availability.

Once you’ve found a domain of interest, you can go through to the registrar or trading platform to buy/bid on your chosen domain.



Spamzilla

Spamzilla is a platform that helps you find expired domains that are worth buying, with the goal of trading them or using them for your next project.

They also offer the chance to find dropped domains, which are expired domains you can often get cheaper through traditional registrars without bidding on a platform like Spamzilla. 

Where Spamzilla stands out from others like expireddomains.net is that it utilises metrics from Ahrefs and Majestic to review the SEO and backlinking performance of a domain.

You can review the backlinks used to make sure they are relevant and effective, as well as check a special SZ score, which is a score allocated by Spamzilla to a particular domain based on all the data available.


Where can I sell or rent out my domain?

If we’ve persuaded you that domain trading is a fantastic investment opportunity, or you want to find out more then sign up to Cloudname today and get started.

We have a community of experts and domain traders ready to help you if you have further questions and exciting new developments being launched soon! 


Cloudname is the innovative platform for online domain trading. Discover the world of cloudname and everything you didn’t know about domain trading.

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