How Domainers Make Money

Typical strategies used by domainers to make money include:

1. Buying a name and then “parking” it with a domain name parking company. “Parking” essentially means pointing the domain name to a third‐party’s website which is owned and operated by the parking company. This website generally includes only one or two pages and displays content and advertising designed to appeal to visitors to that domain name. The parking company enables you to choose a keyword or keyphrase based on the likely traffic to the website and displays content and advertising based on that keyword or keyphrase. Depending on the parking company, you can choose between different layouts and graphics, and may be able to upload your own content. You make money by having visitors click on the advertisements on the site, and the parking company takes a cut (generally the majority!) of each payment per click.

2. Building a “content” website where you feature free content such as a blog or articles, and display advertisements and/or affiliate links. You make money every time a visitor clicks on such advertisements and/or buys through your affiliate links.

3. Building a product or service website where you aim to sell products and services to people who visit the website.

4. Parking the domain with (pointing it to) one of the domainer’s existing sites, which may be a content website or a product/service website.

5. Selling the domain name to someone else. This might be another domainer, broker or corporation.

Although each of the above can be lucrative strategies, most domainers generate income through parking their domains and, at some point, selling them. So much so that “domaining” is often interpreted as buying, parking and selling domains (rather than buying domains and building fully‐fledged websites around them). Indeed, throughout this report I will generally refer to domaining only in the context of buying, parking and selling.

Why do domainers mainly focus on buying, parking and selling? Aren’t they likely to make more money per domain name if they build a fully‐fledged site around it? The reason boils down to what is the optimum use of one’s skills, money, time and other resources. For example, building content and product/service websites involves a certain skill set… while the process of finding money‐making domains requires a totally different skill set. To become an expert in finding the right domains, optimizing them for the purposes of parking, and selling them at a good price, you need considerable knowledge, skill and experience. That only comes with devoting as much time as possible to those activities. You just won’t develop that kind of expertise if you’re too busy creating websites, products and services. Likewise, by becoming an expert, you will inevitably discover that buying, parking and selling domains is the best – i.e. the most income generating – use of your time. You will simply make more money by doing more of these activities, than by spending some of your time on these activities and some of your time on other activities. In other words, if you work a 40 hour per week, you’ll make more money by spending those 40 hours analyzing, buying, parking and selling domains… than allocating some of that time to domaining and the remainder to building websites and creating products.

Of course, you may be able to achieve the best of both worlds if you partner with someone who builds and optimizes content websites or creates product/service websites around the domains you find. But you are still better off spending your time finding, analyzing, buying and working out the best strategy to monetize them, rather than doing else.

Now, although I’ve said that most high‐earning domainers make their money by acquiring, parking and selling websites, they often park their domains and then may, or may not, choose to sell them.

Put it this way, even if you find a great domain name that could be worth thousands of dollars, you are often wise to park it – and generate a steady stream of income – than let it get de‐listed by the major search engines (if it’s still ranking) or lose value while you try to find a buyer. Of course, there are some domains that may not make money from parking, in which case you have no choice but to wait.

However, even if your primary goal is to sell the domain, you may actually increase its value by parking and optimizing its revenue potential.

Nevertheless, in many cases you will simply make more money parking a domain than by selling it and trying to use the proceeds to find another domain to sell. It comes down to determining which strategy brings about the highest return on investment (ROI) over a given time frame. Traffic and Conversion Generating income – whether from a parked domain or your own website – is about getting the maximum volume of traffic, and having as much of that traffic as possible perform certain actions that make you money.

For parked domains and content sites (including “Adsense sites” which generate income by running ads from Google’s Adsense network), such actions are clicking on ads. For each click, you earn a certain amount of money. For content sites running affiliate offers, those actions are clicking on affiliate links and/or buying the product or service being offered. For product / service sites, the actions include people opting in to a mailing list and buying a product or service. Each instance of a visitor performing the desired action is a conversion.

Therefore, your aim, as a domainer, is to maximize your conversion rate – the percentage of traffic that performs the desired action. So, if you’re parking a given domain name, you want to increase the number of visitors who click on the ads displayed on your website.

While the volume of traffic and conversion rate are both important, what really matters is how much money you make. When it comes to parking, there are three (3) key variables: traffic, the pay‐per‐click amount or rate you receive and the conversion rate. As will be discussed below, one parking company may attract less traffic or offer lower pay‐per‐click rates, but still earn you more income than another, simply because it has a higher conversion rate.