Domain investing is a lucrative business model, and it’s easy to get immersed in the domain name market. But what kind of domains are worth the premium? If you’ve been asking yourself that question for a while, then this guide will help you gain a better understanding.
What are Premium Domains?
Short answer: any domain can become a premium domain, provided it adds brandable value and is in high demand. You need to understand that a domain becomes “premium” only when it is desired by a potential buyer. If you’ve been on Twitter and followed the right set of accounts, you’ve likely seen a lot of four-digit sales posts by them. In most cases, you may also be wondering, “Why did it sell at that price? Is there a secret technique that I don’t know yet?”
There are techniques, but they aren’t secret in nature—they’re logical! By the time you’re done reading this post, you will know what I mean by that.
How Many Domains Should I Buy to Make a Profit Each Month?
The answer to this question is quite tricky. The average STR (Sell-Through Rate) of the industry is between 1-2%. However, that doesn’t mean that if you build a portfolio of 120 names, you’ll sell at least one each month! It depends on market trends and the demand for the SLD (Second-Level Domain).
At this point, let me first help you get used to the terminologies here:
- TLD refers to Top-Level Domain, which comes after the second dot (e.g., .com, .net, .io, etc.).
- SLD refers to Second-Level Domain, which comes before the first dot (e.g., Google, Microsoft, Earningify, etc.).
Making a profit in domain investing heavily depends upon these two combinations of TLD and SLD. To make a profit, you need a very strong and desirable combination of TLD and SLD to sell a domain within 12 months!
There are several types of domains within these categories that have their unique value. I’ll talk about a few of them below.
What Are Brandable Domains?
A brandable domain is any domain around which a company can build a brand. These brandable domains are usually made-up words or combinations of words. Such domains are the hardest to sell, as you really need to explain the name and the value around it. If you look around, you’ll see several such domains: Dunzo, Zepto, Google, Microsoft, Shopify, and so many more!
These words aren’t exactly in the dictionary. They are made up using prefixes, suffixes, or were popularized by media. For example, “Dunzo” doesn’t really mean anything; the word gained fame when it was used in the MTV reality show Laguna Beach.
“Google” can be considered a made-up name or a combination of two words—“Go” and “Ogle,” which together make Google. Let’s talk more about two-word combinations.
Two-Word Domains
As the name suggests, it’s a combination of two words. What matters is the combination of the two words and the sense they make. These can be any combinations, but the deciding factor for selling them would be the placement of the two words. For example:
- “WaterPurifier” makes more sense than “PurifierWater.”
- “BuyCars” is better than “CarsBuy.”
To make a sale, search for two or even three-word combinations that make sense and are not randomly arranged. Some three-word combinations can still make sense when you change their order. For example:
- “ShopFreshFood” and “FreshFoodShop” both make sense.
- However, “FreshShopFood” or “ShopFoodFresh” may not make as much sense.
Although, sometimes even ill-arranged words can turn a profit. Such domains are generally called Exact Match Domains (EMDs).
Exact Match Domains
An exact match domain is exactly what it sounds like. If you’re into SEO or have someone working for you in SEO, you must be familiar with keywords and search volumes. The logic is simple here: find keywords that businesses use to run ads and identify the volume and CPC (Cost Per Click) they are already paying to use that keyword in their ads to drive traffic.
Once you identify such a keyword and are able to register it, go ahead and register it! However, to sell such domain names to potential businesses, you need to reach out and help them understand why it is worth the investment.
Let’s take a hypothetical scenario: Assume I have an EMD domain, and I am well aware of the fact that the CPC is between $1.50 – $2.50, with a massive search volume of 1,000 each month. Now I prepare a list of all businesses using that keyword (which is my EMD) and send them a simple email explaining how they are paying anywhere up to $1,500 per month to run ads using that keyword ($1.50 x 1,000)
Pitching EMDs to Buyers
You can pitch businesses on why EMDs are more valuable for them and how they can save costs by purchasing the domain from you, which will recover its cost by reducing up to $1,500 per month on advertisement expenses alone.
Since it’s an EMD, search engines like Google will most likely prioritize it in search results, as it matches the exact query used. Of course, the business would need to work on the domain by adding some content and building authority, but over time, these efforts will yield significant results. Eventually, the company can save up to $18,000 annually ($1,500 x 12 months).
How to Build a Portfolio of Profitable Domain Names
If you’ve skipped the rest of the article and jumped right to this section, I recommend going back and reading it from the beginning before proceeding further.
Now, let’s get to the logical part.
Aim for Popular TLDs
The most popular TLD is .com—no denying it. It’s consistently ranked at the top of all domain sales since the DNS (Domain Name System) was created. Owning domain names with the .com extension is still the most desirable in the world! You should follow platforms like Afternic, Sedo, and Atom on X (formerly Twitter), as they share a list of top keywords and TLDs each month.
I suggest starting your portfolio with the Top 5 TLDs as it’s a safer bet. However, these domains are difficult to acquire for as little as $5–$15, as several domain investors aggressively compete for these names. Expect to pay anywhere between $100 to $600 to acquire a good domain name.
Aim for Desirable SLDs
Most popular SLDs are generic dictionary words like atom, apple, solar, power, red, blue, dry, wet, etc. These names are highly desirable, and buyers often look for such names for their businesses.
There’s a website called ExpiredDomains.net where you can search for a word and see exactly how many TLDs have been registered for these SLDs. This gives you an idea of how popular (or competitive) the name is.
For example, if there’s an SLD like “solar” that’s registered in over 600 TLDs, you know it has tremendous value. Of course, owning the most popular TLD for this SLD (e.g., solar.com) would hold the highest value proposition, whereas other TLDs would have lower value.
Aim for 20+ Registered TLDs
If you search for a “great two-word name” and purchase it immediately, thinking, This is definitely going to fetch me thousands of dollars, you might be setting yourself up for disappointment. If the name isn’t registered in any TLD, it means there’s no demand for it.
As a beginner, it’s easy to lose focus and purchase tons of names, thinking, This is a cool name and definitely worth it. In reality, if it were valuable, other domain investors would have already purchased it.
At this point, let me highlight the types of domain investors out there—people with portfolios of thousands or even tens of thousands of domain names. These portfolios are massive, with some investors making 7–15 sales each month. The industry standard STR is still 1–2%, so imagine how large their portfolios must be.
Acquiring domain names registered in 20 or more TLDs (the more, the better) is the safest bet for ensuring a return on investment. The logic is simple: if there’s high demand for an SLD, even a lesser-known TLD or ccTLD (country code TLD) can yield a profit much faster.
Where Can I Check the Number of TLDs Registered for an SLD?
Several websites provide this information, but the most popular one is dotDB.com. Personally, I prefer ExpiredDomains.net for this purpose, as they don’t have usage restrictions or limitations.
After creating a free account on ExpiredDomains.net, type your SLD into the search bar at the top-right corner. The website will populate the information on your screen. Click on “Reg,” and you’ll see how many TLDs the SLD is registered in, along with data on whether the other TLDs are listed on platforms like Sedo or DAN and their asking prices.
This data can help you strategically acquire domain names and price them appropriately.
How to Buy Popular Domains to Resell?
Here’s where it gets interesting. To purchase high-value domain names, you need to explore several marketplaces, especially those with auction features. Create accounts on platforms like GoDaddy, Dynadot, NameSilo, and Daaz, among others.
There are different types of auctions, each with its own competitiveness. Let’s break them down:
- Expired Domain Auctions – These auctions feature domains that have recently expired and entered a bidding phase. This is where the big players in the domain industry fiercely compete to acquire domains potentially worth four, five, or even six figures. Unless you have deep pockets, it’s best to stay out of these battles, as bids can easily exceed $1,000.
- Backorder Auctions – Backorder auctions occur when multiple parties express interest in a domain that’s currently registered but might expire soon. Backorder services attempt to acquire the domain if it becomes available. This process is highly competitive, as investors aim to “snatch” domains before they enter the public expired auction phase.
- Expired Closeouts – This is where smaller investors thrive! Expired closeouts feature domains that weren’t purchased during the expired auction phase. Since hundreds of thousands of domains expire daily, many slip through the cracks. Most are worthless, but with enough effort, you can find valuable ones. These domains are sold on a first-come, first-served basis, with prices decreasing over three days:
Day 1: $30 (plus renewal fees).
Day 2: $15 (plus renewal fees).
Day 3: $5 (plus renewal fees).
If you’re lucky, you can acquire a domain with a perceived value of hundreds or even thousands of dollars for just $5.
Where Can I List My Domains for Sale?
While there are several marketplaces where you can sell your domains, the choice of platform depends on the type of domain name you’ve purchased. Let’s break down the options:
Atom (SquadHelp)
Atom.com is currently the best marketplace for selling brandable domain names. They feature a “Contests” section where businesses provide briefs about their requirements. This allows domain sellers to pitch brandable domain names—essentially gibberish or made-up words like Glaciaro, Diagosil, or Wehydr8.
These names may not be widely searched, as they’re often unknown words. However, brands looking to stand out often value these unique names. For example:
- “Glaciaro” could evoke the serenity of icy glaciers and be used by a beverage company for a summer product.
- A trekking company might find it fitting for glacier tours.
- A fashion designer named Enrique Glaciara might name a collection “Glaciaro.”
The versatility of these names gives them a premium value in the eyes of the right buyer. Atom is the ideal platform for showcasing such domains.
Brandpa and BrandBucket
Both platforms are well-known for selling brandable names. However, their processes differ:
- Brandpa accepts only .com extensions, and its selection process is automated.
- BrandBucket is more selective, manually appraising each submission—a process that can take months.
Note that commission rates are higher on these platforms, typically ranging from 20% to 30% on successful sales.
Afternic and Sedo
These are two of the largest platforms for selling domains:
- Afternic is a favorite among North American domain investors and is now owned by GoDaddy.
- Sedo shines in the European market.
Both platforms are massive, partnering with numerous smaller registrars. Afternic is linked to over 150 registrars, while Sedo boasts partnerships with 650 registrars. Combined, they syndicate your listings across 700+ registrars (some partners overlap). This makes listing your domains on both platforms essential.
If you’re new to domain investing, you’ve likely heard of these platforms. Following domain investors on X (Twitter) will reveal countless screenshots of sales made via Afternic and Sedo.
If you must choose one, I recommend Afternic for its reach and ease of use.
Let’s Wrap Up
I know you may still have many questions, especially about different domain registrars, but this article is already longer than intended. Too much information at once can be overwhelming, so let’s save those topics for another time. Meanwhile, you can read other articles on domain investing strategies or the top 10 domain registrars in the world to expand your knowledge.
Key Takeaways
- Good names are hard to come by.
- Made-up names are harder to sell (it takes years).
- Two or three-word domains are great starting points (they’re cheaper to acquire).
- EMDs have value—but you need to demonstrate that value to potential buyers.
- Stick to Closeouts when starting out.
- Always check how many TLDs are registered for an SLD (the more, the better).
- List your domains on multiple reseller platforms—you don’t know where your buyer is looking.
- Afternic and Sedo are must-haves for their fast transfer feature, as they syndicate your domain listings across several registrars.
- Don’t rush to build a 100-name portfolio in under a year (unless you have deep pockets). Take your time and be vigilant; great names often slip through the cracks, waiting to be acquired.
When I started, many told me to be patient: Quality over quantity! But I didn’t initially understand what they meant. What exactly is “quality” in domaining? Now you know!
While some investors have portfolios of 10,000 domain names worth millions, others achieve the same value with fewer than 100 names. More domains do not equal more opportunities. However, opportunities always exist in domaining!
