A domain name refers to the URL that people type into their browsers to access a website. It consists of characters followed by an extension or top-level domain (TLD), such as .com or .org.
Every domain differs from each other, creating value and demand for certain domain combinations. Due to the exclusive nature of domain names, many people see this as a business opportunity. This is where the concept of domain investing comes in.
One wise domain investment might reward you with up to six-figure profits. But to achieve this, you will need to have a solid domain portfolio.
A domain portfolio is essentially a collection of domain names that you sell to generate profit. Having them in one place makes it easier for you to manage the domain names and for prospective buyers to browse through your collection.
We have included the five practical tools you can use to build a profitable domain portfolio. Before we go into detail, let’s learn more about the concept of domain investing.
What is Domain Investing?
Domain investing, also known as domaining, is the practice of buying a domain name in order to generate a profit. Domain investors purchase domain names for a number of reasons, including to direct passive income from pay-per-click advertising and resell them to end-users.
Over the years, domain investing has become one of the most profitable commodities. Especially since the pandemic, many companies and businesses have started to establish an online presence. In 2020 alone, NameBio reported over $90 million in domain name sales.
Just like various products and services, domain names sell at different prices. Depending on the keywords, some domain names can sell for thousands of dollars, and others can sell for hundreds.
That said, there are several factors to consider when looking for domain names to invest in:
- Keep it short – a good rule of thumb is to use only up to 12 characters. This is because the shorter the domain name, the easier it is to remember.
- Use keywords – incorporate relevant keywords into your domain name to increase its visibility on search engines. Using keywords also helps convey the site’s purpose.
- Top-Level Domains – the .com, .net, and .org domains hold more value than other domain extensions due to their popularity. This allows you to sell them for higher prices.
- Avoid numbers and symbols – using characters other than alphabetical letters makes domain names harder to spell and remember.
5 Tools to Build Your Domain Portfolio
Now that you understand how domain investing works, the next step is to build a strong domain portfolio.
Below are five tools you can use to build an effective domain portfolio.
1. Domain Marketplaces
A domain marketplace is a platform to buy and sell domain names. From there, sellers list domain names at various price ranges, and buyers can place an offer and make a purchase.
Although the prices here are relatively higher compared to domain registrars, the marketplaces offer unique and valuable domain names.
Domain marketplaces, like Sedo, Dynadot, and Afternic, provide a wide range of domain names – ranging from the generic and niche-based domains to the ones with high value and desirability.
Browsing through marketplaces can also help you come up with the best prices for your domains. Examine the types of domains listed on the platforms and identify what factors make the prices vary. This way, you can find out the market prices and set your rates accordingly.
However, note that every marketplace has its own rules and regulations, so be sure to do your research.
2. Escrow Services
A domain escrow is a facility run by a third-party company that holds the money until the domain is securely transferred to the buyer. The service ensures security and prevents both parties from being scammed. This comes in handy, especially for high-value transactions.
Once you have made or received an offer on a domain name, the escrow service helps establish terms and conditions. The service will walk both parties through every step of domain acquisition, from payment to money reimbursement.
Moreover, as a seller, an escrow company will make sure you receive payment verification. Thus, you won’t have to worry about any credit card fraud or incomplete payments from the buyers.
With that in mind, start looking for a reliable escrow service provider so you can rest assured that every transaction you do is protected. Some of the most popular escrow companies are Escrow and Dan.
3. Name Bio
NameBio is a domain database that stores and tracks domain name sales. This tool is helpful to evaluate how well a domain name is valued on the market. This way, you will be able to predict if a domain is likely to be sold before purchasing it.
Let’s suppose you want to see how well the .com domain extensions sell over the year. You can simply use the Advanced Search feature, click on the Extension menu, and choose .com.
Adjust the date range accordingly and click Search. The system will present you with a list of .com domain names along with their selling prices and domain venue.
The NameBio database is updated regularly – it contains more than 62,000 domain names with a total of over $200,000 in sales volume. Using data from this platform makes it easier to target specific categories and keep up with the most relevant trends.
4. Appraisal Tools
Another tool that can help you identify a domain’s worth is an appraisal tool. As the name suggests, the tool helps you estimate a domain’s value and compare it to other similar names. Hence, helping you to make informed decisions and get the best deals.
With an appraisal tool, you can skip the hassle of researching and guesstimating the right prices for your domain names. Not only does it help measure a domain’s worth, but it also gives you information about what factors influence the value.
Many appraisal tools are available in the market, such as GoDaddy’s domain valuation, Free Valuator, and Estibot. These tools determine the value of a domain name based on various factors like extensions and keywords – the more brandable a domain is, the better the value.
5. WHOIS Tools
WHOIS is an internet record listing that provides information about domain registration and ownership. The WHOIS database stores the contact information of individuals who registered domain names, including the names, the addresses, and sometimes even the phone numbers.
Moreover, the record also includes information about the registrar and the domain itself. This includes registration and expiration dates, as well as the name servers and IP addresses. A WHOIS lookup tool, like DomainIQ and Whoisology, gives you access to the WHOIS database, making it easier to contact the domain owners.
Since WHOIS is regulated by the ICANN (International Corporation for Assigned Names and Numbers), all data listed there is official and accurate, making WHOIS an excellent tool to lookup domain ownership records.
You can also adjust your WHOIS privacy and include your information in the database as a domain investor. This will help potential buyers to reach you whenever they want to purchase the domains directly.
Domain investing is one of the most profitable practices in this digital era. It is the process of buying a domain name, holding on to it, and selling it for a higher price when the demand is high.
Although the practice comes with a learning curve, getting started with domain investing is easier than you may think. Start by building a domain portfolio and make your way up from there.
To wrap up, here are the five tools you can use to build a strong domain portfolio:
- Domain marketplaces – helps you resource valuable domain names.
- Escrow services – ensures the security of your domain transactions.
- Name Bio – predicts and evaluates a domain’s value in the market.
- Appraisal tools – estimates a domain’s worth by comparing it to similar names.
- WHOIS tools – provides information about domain ownership and registration.
Paired with solid investment strategies, these tools can help you gain significant profits in the long run. Should you have any questions about the domain portfolio, don’t hesitate to drop them in the comments section below. Good luck!