Passive Income: The Hidden Potential of Domain Names

 

 

Passive income is a topic that always finds its way into the conversation when I meet up with associates.

This past year, over the holidays, it was no different. As a business associate and I reminisced over the last 12 month’s positives and negatives, I asked, “If you had discretionary dollars to invest in the next year, what would be top of mind?

What Would Your Passive Income Answer Be?

How about you? Same question, “If you had discretionary dollars to invest over the next 12 months, what would be top of your mind?

Like my friend, here is what I am confident will most likely not hit your passive income list – investing in domain names.

Yes, domain names. You know, those addresses we enter in the web browser.

Passive Income Through Investing In Domain Names

Domain names, when selected and managed properly, can be a lucrative road to diversify your portfolio and generate passive income.

How lucrative? Like real estate, it depends.

For example, it is reported that

  • Tesla.com sold for $11 million (2014),
  • NFTS.com $15 million (2022),
  • Connect.com $22 million (2022),
  • AI.com $11 million (2023).

But not all domain name sales are in the millions. Most domain name flips are in the hundreds and thousands. For example, in the first week of  January, 2024, here’s a sample fo what sold …

  • WorldCinemaParadise.com $6100 (GoDaddy)
  • HannaMchain.com $4150 (GoDaddy)
  • ElbowBeachBermuda.com $5800 (GoDaddy)

Unlike the list of one-word domain names that sold in the millions, these domain names are simply everyday descriptive word combinations.

Profiting From Everyday Word Combinations

Imagine this. Domain name registration history shows someone bought ElbowBeachBermuda.com in 2009. Let’s say that person paid $20 to register it. In January, 2024, for whatever reason, the owner flipped it. It sold for $5800.

As an aside, the domain name history for ElbowBeachBermuda.com shows the name just didn’t sit dormant. Whoever owned it had put it to use. Some years there was a lot of activity on the domain name and others minimal activity.

In any case, the owner flipped it for $5800 USD. Let’s say the

  • owner’s 15 years of registration totaled $300
  • GoDaddy’s commission for brokering the sale roughly $1000

That is a net profit of approximately $4500.

Even if I am off by $500, that is still a serious gain for a domain name that was actually used for several years and then, when it possibly no longer fit into the owner’s plans, instead of simply letting the registration lapse the owner flipped it pocketing roughly $4000. Nice!

Summary Passive Income: The Hidden Potential of Domain Names

Passive income through domain names is indeed a possibility. From the sales listed above, it is evident domain names can individually sell for millions. However, in general everyday sales are in the hundreds and thousands.

Cost of a dot com domain name registration today averages about $20. That is a small fee to pay to build a portfolio of domain names for future sale.

This also means that passive income through flipping domain names is an income avenue available to just about anyone.

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By the way, if you have a domain name that you believe might make a good flip, our team at Domain Buyers Market would be delighted to discuss a strategy with you.

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