Flipping websites and domains

How to make extra money online: Strategies for flipping websites and domain names

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You can make money online with this strategy. Believe it or not it is simpler than what we think. I was struck by the fact that anybody can flip websites like flipping real estate. There is potential for you to start a website, build it to the extent that you want to, and sell it for profit. This process can be scaled to generate income on a constant basis.

In this article I am going to elaborate a bit on the subject of flipping websites and domain names and include some aspects that was covered by Jay Neill during the live training at Wealthy Affiliate on the 05th October 2018.

A while ago I identified a few lucrative domain names in my niche of cloud accounting which to my surprise were not yet bought. I thought: “Buy the domain names now and when the time is right I will flip them”. Hopefully I will be approached by a large corporation begging me to sell the domain to them, making a killer profit. Friday’s training on WA actually proved that I was not totally insane and that my plan is not unattainable. I also realized that my strategy needs some fine tuning and that I have some rough edges that needs to be smoothed out.

flipping domains

A summary of questions and answers that you may need to consider

Here is a summary of questions and answers that you may need to consider and think about when embarking on the strategy to sell websites and domains for profit. This strategy can be explored as an additional source of income. Even to get rid of that old domain names you haven’t touched yet or a niche where you do have a website but have lost interest in.

Can you sell domain names and websites for profit?

Yes you can!

Can I only sell domain names or does it have to be websites?

You can sell a brand new domain name or well established website. You can be directed by what you have available and which one will be the most lucrative to you at this point in time.

You can also sell domain names without having a website. But you cannot sell websites without having a domain name.It is like trying to sell a property without a title deed. The domain name gives the website the property title.

I saw a domain name that is 15 years old “timing the market” up for sale for $75000. Without even having a website. That is a brilliant domain name. I can see the potential of somebody making a lot of additional money in future with that specific domain name.

Can I sell a brand new domain? and why would anyone want to buy a brand new domain?

Yes you can sell a brand new domain name for profit. 

Remember one man’s garbage is another man’s treasure. To gain immediate access to a niche. A unique strong domain name in a specific niche have the ability to give somebody immediate access to that niche market, which will otherwise take a lot longer time to unlock. Think about a business in the stock exchange market that can benefit from the domain name “timing the market”

What determines the sales price of websites and domain names?

The biggest driver of value is revenue/profit and the no.1 factor people consider when buying a website.

Another factor to consider is the future revenues that can be unlocked by adding a unique spin on the website or optimize it for Search Engine Optimization.
It is important that you can generate a profit and loss statement of your website because it is essentially a business on its own.

Another determining factor is: What kind of revenue and profit is being generated, is it once off sales or recurring? Is it affiliate commission or drop shipping?

Another method being used to value a business is the cost-basis of valuation whereby the value is determined by adding up all the costs of the assets. This could be costs to build the website to get it into a specific state or position. Additional costs such as of photos, logo designs, blogs written, domain registration as well as hosting. 
Again by keeping accurate records of your website/ domain name, the value can be determined. I use the online business accounting solution of Sage to effectively keep records of all my website expenses.

What type of websites can I sell?

You can sell any website or domain name. You might be surprised by the demand for these assets.
The better the domain name in a focused, unique niche, the higher the price. A bad name in a general niche will not attract a lot of attention except if your website generate high profits.

The following websites are examples of websites that can be sold.
1. Review style website typically being used by Affiliate marketers
2. E-commerce website for physical products
3. Amazon FBA

What other elements determine the value of my website or domain name?

Jay from Wealthy Affiliate calls it the virtual curb appeal. It is the process of making the exterior looks appealing to create the perception of value. The same strategy is being used by people when selling real estate property.

As a guide you can use the elements below to measure your website against. If you address these elements you might be able to increase the value of the website you would like to flip and increase your asking price.

On which platform is the website build
Is it WordPress, Shopify, or handcoded?As 80 % of all websites are being built on WordPress it means that if you are selling a WordPress website you will access a bigger market who can carry on with the website. The bigger the market, the higher the price.

What is the website’s trend in terms of traffic?
Is it constantly growing? Has it reached a plateau? Or is it declining? Is the website traffic generated organically by good Search Engine Optimization (SEO) or is it achieved by paid advertising. This can impact severely in future costs considerations and time that has to be invested in the website.

How old is the domain name?
How old is the website? Age adds value and if it is an old website why is it not generating profit?

Social accounts?
Have you set-up any social accounts and is it part of the package being offered?

Does the website have an existing email list?
Effectively enabling the buyer to just carry on where you left off. Will the list be sold with the website?

Think about the brand that is being created by this website. The better the deal is packaged, with all the elements that are in place the higher the value for which the website can be sold. Time is money and people do recognize the value of time and effort. If someone can just take off from where you left off it adds value.

How can you add value to your website by getting some of these elements in place? Many of these elements are simple and relatively quick to put in place. 

How can I determine the asking price?

You can roughly follow the same principles as when selling real estate. With selling residential real estate property, values are determined by the Comparative Sales Method. It is a process of taking a property that has been sold and then compare your property against the property’s sales price, and making adjustments for all the various different elements of the two properties. For example two neighbouring properties in the same area, with the exact same size but one has a swimming pool. You add the value of the swimming pool to the value of the property. You might also add the cost of the additional bathroom etc. Get the picture? You follow the same steps with your website. You compare your website to other websites on the market that may be similar and adjust your price for the elements that you may or may not have.

What are the costs associated with selling a website or domain name?

The costs vary based on whether you are going to sell it on an auction type of website or eBay. No two places where you sell websites are going to have the same costs. Costs such as listing fees, premium position etc. will differ. If you sell it privately there are no costs associated with it. And that may be the best strategy to follow. 

On the website auction platforms the costs are determined by 3 criteria
1. Just a domain name listing fee can be $9 and classified listing at $1;
2. Starter sites have a website but doesn’t generate revenue yet. Typical listing fee $9 and $9 for classified listing;
3. Established sites are sites that already generate revenue. The listing fee amounts to $29 and $9 for classified listing.

You pay a success fee once sold, which varies from 12% to 15% which is added to the costs.

Where can I sell my valuable website?

The no. 1 place to sell is: People you know. Before selling it on an auction list you can reduce your costs of selling by offering it to people you may know. It can be friends or family who followed your site building with a keen interest. Your followers or fans, your email list, fellow forum members, social media followers and friends.

Beyond that, the number one market place to sell websites is Flippa. You can find them on flippa.com.

Then there is Empire Flippers at empireflippers.com which have also been around for some time. These two are the biggest players in website listings and selling. Empire Flippers focus on the higher-end established websites.

You can also sell your website on eBay.

Can you sell local specific domain names and websites?

Yes you can. If there are trademark names or even a company associated with the website you can certainly increase the asking price. Before you buy, do your due diligence on the website to ensure that there are no trade infringements or restrictions on the name.

Some final thoughts on strategies for selling websites and domain names.

I think it is important to identify the trend before you sell your website or domain name. You should also pay careful attention to what is happening in your niche.

I hope what I have shared here can possibly open a whole new world of opportunity for you that will open more doors for generating additional money online.

If you have ever sold a website or domain name I would love to hear how it worked out for you. Where and how did you sell it and how much profit did you make?

If you are planning on selling your domain name or website did any of this advice help you?

About Louis Munro

Louis is the founder of Infinite Affiliate Marketing. Louis is a qualified Chartered Accountant (SA) and an entrepreneur for the past 16 years. Louis is passionate about helping people to become successful online entrepreneurs. 

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