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Why Domain Name Trading

Domain Name Trading1. The domain name trading market is still expanding.

2. We do not hear many Singaporeans doing this yet. We will, soon.

(This is for my Singaporean readers. I think many Singaporeans are born traders so there must be someone in Singapore already making lots of money quietly trading domain names.)

3. Everyone who starts an online business needs a good domain name eventually.

Reason: You don’t want to put your income at risk because someone in Google decides to close down your BlogSpot.com blog.

4. People are willing to pay several hundred dollars upward for a domain name they fancy.

5. It’s a truly global business, you target people from the USA, Europe, Japan, India, Middle East and Asia who are looking for domain names because of the

– letters and words in the domain name
– pagerank
– existing traffic

I started to trade domain name seriously only last September. I registered accounts with TDNAM.com and Afternic.com. So far, I’ve lsted about 40 domain names at Afternic and sold a domain name recently for US$500. To replenish my inventory, beside registering new domain names, I also buy expired domain names at TDNAM.com. I had spent over US$300 over the last 4 months on expired domain names.

In fact, I traded my first domain name about 2 years ago – IndexFuturesTrading.com for US$150 on SEDO.com. I guess I could easily sell it for US$500 today.

What You Need to Get Started Trading Domain Names

MONEY

You’ll need to put aside US$500 to US$1,000 to start this online business and build up your domain name inventory over the next 12 months.

DISCIPLINE

You are not about to go on a shopping spree and spend all your capital in a weekend. For a start, you MUST NOT buy more than 5 domain names a month – no matter how cheap they are. There are always better domain names coming to the market if you look hard enough.

DON’T BE CHEAP

You are in the business to buy and sell good domain names – NOT cheap domain names. Do not buy a domain name because it’s cheap. If people are selling cheap, very likely, there is no buyer for that name. Buy a domain name because you have done the research, and opinion based on your own research, the domain name is undervalued.

SPECIALIZATION

Domain Name TradingDeal with a specific category of domain names. Start with only .COM domain name. This is most in demand and you can expect to turn over a profit quickly. You want to specialize in a certain industry e.g. real estate, finance, health or etc.

CASHFLOW IS MOST IMPORTANT

Domain name trading is different from domain name speculation. In trading, you focus is on the cashflow – as long as you make a profit, you will sell your domain names to increase cashflow.

In domain name speculation, you focus on the profit margin and hope that you will make the most money with a domain name – you have to be lucky all the time.

Would you want to become a successful domain name trader?

If you are already making money trading domain names, do not stay quiet, we want to hear from you.

Update Jan 9, 2007: Here’s an article by Mercanti Group, an investment bank, on Virtual Land with some interesting statistics on e-commerce in relation to the rising prices of domain names.

{ 7 comments… add one }
  • Kian Ann 8 Jan 2007, 11:43 pm

    I was thinking about this… I think domain names are like pieces of land – it can only get more expensive! Nobody wants to use a long domain name whether marketing online or on the business card. Soon, all the Internet marketers will take up all the three word domains (even the one separated with hyphens) and unless there is a new system altogether, businesses 10 years from now will need to either buy a domain name from someone, or settle for four or five word domains… its a matter of time. The Internet can only grow bigger, the number of websites can only grow.

  • rangga 9 Jan 2007, 12:33 am

    there’s no value added on this kind of trading. and less more like gambling, I saw many silly domain bought only to be parked.

    sorry if it’s a bit rude, someone has taken domain name I really want I hate it 😉

  • Shi Heng Cheong 9 Jan 2007, 8:53 am

    Hi rangga,

    I can understand how you feel about your most wanted domain name being snatched away before you even realized it. I hated it when I found out that someone had registered shi.com.

    However, let’s face it. The real value of a .COM domain name is not the $9 or so you pay to GoDaddy. That’s the cost for registration only.

    Good domain names are getting fewer as more people are coming online. So instead of hating it, why not protect your interest by registering the domain names first. When you have “too many” domain names, you can start selling them. Treat it as a hobby like stamp collecting.

  • Shi Heng Cheong 9 Jan 2007, 9:05 am

    Hi Kian Ann,

    You are right about similarity of domain name and real estate. Here’s an excerpt from a report published on Dec 27, 2006 by Mercanti Group, an investment bank, on domain names.

    Just as open land led settlers expanding westward in great numbers, “virtual land” on the Internet continues to proliferate and increase in value as consumers and businesses embrace the medium and transfer more of their daily activities online… Forward thinking investors and companies that analyze this shift in behavior and emerging landscape and develop competencies as brokers, owners and marketers of virtual land will be handsomely rewarded, Mercanti concludes.

    You could have been the one to sell Sony the domain name, FeelEverySound.com and make yourself a few dollars richer.

    I see domain name trading as a good option for some of our friends to start doing something more worthwhile than trying to sell e-books on the Internet.

  • April 25 May 2007, 6:11 pm

    Hi Shi Hengcheong, pls advise how much is the .SG domain and where can I register? In SEO, does a .COM supercede .SG for searches? Thanks for your help.

  • Shi Heng Cheong 5 Jun 2007, 8:48 am

    April,
    You can get a list of SGNIC partners at http://www.nic.net.sg

    As far as Google is concerned, it is the relevance of your web page content that is the most important.

    If you are targeting Singapore market then it is good to have .sg domain. Also, if you are targeting foreigners looking for information on Singapore then .sg is also ok.

    If the domain name I wanted is available in .com and .sg, and I am targeting Singapore-base traffic, I will register all.

    You may want to read my post on Google is serving localized search result listing on the latest development on local search.

  • April 5 Jun 2007, 2:01 pm

    Thanks. That .sg domains cannot be traded is a setback which seems to go against the spirit of the internet and free enterprise.

    Although it may sound like the right no-nonsense way to do things from the days gone by, I am quite certain this restriction is a bad decision in today’s modern economy.

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