You'll sometimes hear people ask, "Can we really profit from buying and selling domains?", and the answer to their question is that they can. In fact, there are claims that many individuals make a comfortable living, to say the least. There are a number of ways this can be done.
The essence of making money in this way is the old principle of buy low and sell high. It's often what you do in between that affects just how high you can sell. What you need to do is add value in some way. This may be done by developing the site associated with the domain name into a valuable piece of property by boosting its search engine ranking.
You may have intimate knowledge of a particular field or a specialist company that is bringing out a new product that you feel will be a winner. Or you could just be good at guessing what is likely to succeed in business or technology through reading the news. Domain names related to these could earn you good money if you're lucky. Don't think that all the names have been used up, you can always use combinations of words creatively.
The question as to whether the top level domain is important or not is debatable. It depends to some extent on what you intend to do with it. Nobody would argue that, all else being equal, the . Com TLD is the most desirable for a company to own. It is also worthwhile having the . Org and . Net to make a package for sale. From the search engines' point of view though, the TLD doesn't have much influence on its value. Look out for upcoming releases of country specific TLDs that can make up relevant, possibly valuable names.
You should aim to cover the cost of your domain by monetizing the website while you're waiting for it to sell. You can do this by putting your own AdSense ads on the front page, or by parking it with a site that will share any PPC earnings with you.
Don't think that buying up unused brand names will benefit you in any way. Quite the opposite, in fact. Although this has worked in the past, the law has tightened up on misuse such as this and you can be forced to give the domain name to the genuine brand owner. Nor does buying similar sounding names or typographical errors help, because that is also considered to be abuse and will be stopped.
Whichever strategy you choose to use, you should be aware that there are many tools on the web for those wishing to earn money by this means. You'll be able to source tools for automating the finding, selecting and buying of names, whether you are doing it on a large scale or as a small, spare time activity.
So, next time you hear someone ask, "Can we really profit from buying and selling domains", tell them that they certainly can. You will encounter those who say that the days are gone when money could be made in this way. They assume that because large, organized groups have covered the field on a massive scale, that individuals can no longer find a niche. As always, they reckon without the creativity of the human mind.
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