Domain Flipping – Flip it Like You Mean It
Two letters plus a .com can give you all the money you will ever need in your lifetime. After you spend that money in your lifetime, you might even have lots of it left in your afterlife. Imagine that.
Flip for me by San Diego Shooter, on Flickr. This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License.
Domain Flipping – well, almost.
What is Domain Flipping?
You bought a raw land. After a few weeks and not doing anything at all to it to add value, you sell it for a considerably higher price than what you paid for it. Imagine doing that to a domain. You have got the picture? That is what we call domain flipping. You buy a domain and sell it quickly for a hefty profit.
Success Stories
I heard about the pizza.com story. Chris Clark registered the domain, pizza.com for $20 about 14 years ago. He paid a minimal amount to maintain the registration every year and then he thought of putting the domain in auction. He thought that maybe pizza companies might be interested to pay a few bucks for the domain. That few bucks turned out to be a whooping $2.6 million as companies waged a bidding war to buy the domain.
I also heard about the fb.com story. In 2010, Facebook bought the domain, fb.com from American Farm Bureau Federation for $8.5 million. I do not really know why Facebook bought fb.com but sometimes companies buy domains very similar to their existing domains so that they would be able to catch all traffic to their websites. For example, let us suppose that it was found out from statistics that a large number of visitors who wanted to visit the Facebook website kept on typing on the address bar the shorthand version fb.com by mistake. If Facebook bought the domain, fb.com and pointed it to the Facebook website, a visitor typing either facebook.com or fb.com will be directed to the same Facebook website and thus enabling Facebook to avoid traffic leak.
Is Domain Flipping a Viable Business?
The pizza.com and fb.com stories got me thinking that it could happen to me. I got inspired and registered to a website specializing in domain auctions. Although I know that the registration of mcdonalds.com is probably not expiring anytime soon, I put an order to buy it. I was hoping maybe with the help of a freak chain of events, registration of mcdonalds.com will expire and the registrant will forget to renew it and I will be able to register it to myself. My imagination is already painting a picture of McDonalds on bended knees begging me to sell the domain to them and offering me pots of gold with a Big Mac. “Name the price and consider it sold”, they say. I grin from ear to ear.
Back to reality. So, is domain flipping a viable business?
Hell no. I do not really believe that selling something without adding or creating value to it will result in a business that can run for a long time and be a source of your staple income. It is my belief that all business owners must add value in all products or services that they sell or provide. Shame on you if you sell me crap. Yes, it is true that some domain flippers sold some domains with a profit margin anyone will be proud of. Yes, it is true that there probably is a learning curve to attain success in domain flipping. Personally, domain flipping to me appears to rely heavily on luck. Maybe it is just me but it does not make me proud to say that I earned $8.5 million by selling two letters with a .com at the end. It sounds like the most unfair thing in the world and it sounds a lot like cheating.
There is a topic in the forums called “Is Domain Flipping a Viable Business?”. What say you?
