Domaining
Domaining is usually referred to as the business of buying, selling, and developing domain names. Sometimes, it is also used to describe the practice of monetizing domain name registrations. Domaining must not be confused with domain monetization which involves marketing activities to increase earn profit from traffic by means of advertising programs such as PPC (pay-per-click)). [1]
Short overview
Domaining is also called "domain name speculation" and describes the actions of purchasing and selling domain names as a main activity to earn profit.[2] In this way, in order to start a domaining business, the entrepreneur must be able to purchase and register unique and profitable domain name with the purpose of selling them at a later date. The difference between the cost of the domain at purchase and the price at selling represents the profit earned.
How it works
In order to start a domaining business there is a need of an entrepreneur which in this case is known as domainer. The domainer basically buys and sells domains while his decisions are based on entrepreneurial skills and instincts. If the domainer oversees an important domain to be purchased in the near future at a higher value than today, he will purchase and register it. But all these facts are speculative issues which lead us to the risks involved in the domaining industry.
The domaining business is the least risky business because even if the price of the domain purchased will not increase, it will neither decrease. In this way, the domainer has always the possibility to sell the domain name to bulk domain name buyers and recover his initial investment. Some domain names may increase in value exponentially (case in which the profit rate achieved is very high), while other domain names may increase with moderation (case in which premium domain name buyers are the main target). [3]
However, in order to determine which are the most profitable domain names the domainer must analyze the most popular keywords that generate a lot of traffic, as well as new trends. This is as easy as it may seem, but the rewards are definitely worth it.
Necessary domaining elements
In order to be part of the domaining industry there is first the need to become a domainer. There are plenty of resources and online guides related to domaining and how to be successful in this field of activity. Risk-takers are the ideal match for domaining. Besides a domainer, some basic entrepreneurial skills are required - especially developing the ability to identify an opportunity and choosing the right timing to invest in domain names. These two elements are crucial for a successful domaining business.
Reasons for Domaining
When deciding to purchase a domain name, the domainer will perform this transaction for one of 3 reasons:
- There is a high probability that a company will require the domain name and due to the low availability of domain names, the price will rise.
- By means of marketing techniques, monetizing or other such methods the domainer will be able to increase his revenues and even increase the attractiveness of the domain.
- To loosen up the competition or to prevent another competitor from purchasing the domain name, while being aware if its importance. Then, the domainer will expect a negotation process to start in order to sell the domain name to his competitor. [4]