Earn a Passive Income Flipping Domain Names for Profit

While browsing through the threads at one of my favorite forums, I came across a post, which discussed making money by flipping expired domain names. I became immediately interested in this topic and decided I wanted to try this myself.

My first attempt to buy and sell an expired domain name was a trial but was successful. I purchased the domain name "happypuppy.com" back in December 2005 on one of the Internet's aftermarket sites. I paid less than $100 for the domain name and resold it less than a month later at a 60% profit! That experience got me interested in the profit potential of buying and selling domain names.

How exactly did I do this? Read on.

First, I went to TDNam.com to see if I could find an interesting sounding domain name that was inexpensive. TDNam is a site where one can go to buy and sell domain names. I searched through their extensive listings and came across a listing for the domain name "happypuppy.com" I thought it sounded pretty catchy and decided that I would buy it. At the time it was listed for sale for under $100. I purchased the domain name and registered it in my name.

I then opened an account at Sedo.com. Sedo specializes in working with domain name speculators who want to sell domains as easily as possible. Here's what SEDO has to say about themselves:

"Sedo is the global marketplace for buying and selling domain names and websites. Our goal is to help website owners find a great name for their new online business. We've assembled the world's largest database of high-quality domain names -- over 4.0 million names! -- and a community of domain professionals from around the world.

Sedo's network includes domain-oriented sites in five languages and a full range of domain name services: domain auctions, domain name consulting, domain name appraisals and valuation, and domain name escrow/ transfer services."

I listed my domain name and decided on a sale price, which would guarantee that I would make a profit on my initial investment. Listing a domain name with SEDO is free. You only pay a commission if and when you sell your domain through them. If you sell it outside of SEDO, you don't owe a commission. You can remove your domain name(s) from SEDO at any time.

How does it work? Well, when someone types in your domain name in his or her browser they are taken to the SEDO hosted page and are informed that your domain name may be for sale.

Want to see what an actual SEDO for Sale page looks like? Here's a link that SHOULD end up on SEDO: http://www.ebookalley.com. If it doesn't, a domain name speculator has probably just made some money!

Once a potential buyer arrives on the for sale page, and click through to see if the name is actually for sale, they will see the seller's proposed sale price and they can use the form on that page to enter their offer. The offer is sent to the seller without your name or contact information being revealed. You can accept the offer, reject the offer or make a counter-offer. If a deal gets struck the buyer makes their escrow payment through SEDO. You get the money after you have completed transferring the domain name to the buyer.

After that experiment, I have since purchased quite a few more domain names for the sole purpose of flipping them, and have been pretty successful doing so.

There's no guarantee that you'll sell every domain name that you buy, and there's certainly no guarantees that you'll get as much as you hoped to get, but there is enough potential profit there to make it worth the effort.

So a few weeks later, I received an e-mail from Sedo informing me that someone wanted to buy my domain name at the listed price. Boy was I excited! I immediately accepted the offer and waited for their instructions on how to complete the sale. Once the sale was completed, I received payment fairly quickly via PayPal.