Domaining (domain investing) is the practice of buying and selling Internet Domain names. There are two main monetization methods for domain names: buy a domain and sell it for a higher price, and buy a domain and generate income from it.
The first method involves buying a domain name (probably an expired domain), and reselling it for a higher price.
The second method involves buying a domain name and placing either adverts or a full website on it. You’ll use this website to produce a monthly revenue, which hopefully will cover the cost of your original outlay plus the domain name’s renewal fees.
In this sense, domain investing is very much like investing in real estate. You can buy a property and make a monthly income from renting out a property whilst still retaining your ownership of the property, or you can buy a property and sell (flip) it for a higher price.
An example of domain flipping would be a domain name that I bought in August 2014 and sold in October 2014 for 14 times what I paid for it. I did nothing to the domain name at all apart from finding someone who was willing to buy the domain name from me.
An example of domain development would be a domain name that I bought for $260 in January 2013. I built a website, and by the beginning of March 2013 I had a lead generation partnership in place with a company that would pay me $50 per lead. I made back my initial investment inside a month.
The Domain Name Lifecycle
If you are going to be buying and selling domain names, you need to know about the typical domain name lifecycle – from registration to deletion. The first thing you should know is that a domain name is not technically owned by you. Even Facebook.com, or Google.com are not owned by Facebook or Google respectively.
Every domain is rented at an annual cost. If you register a domain name, you have the right to use that domain name for the length of time you’ve registered the domain name for (one year, five years, ten years). You can choose to renew the domain name for as many years as you like. If you choose not to renew your domain, that domain name is rereleased, where it is available for someone else to register.