The Beginner’s Guide to Domain Name Investing.

A domain name is worth whatever amount someone is willing to pay. While most domains sell between $2,000 to $20,000, premium domains, category killers, and short domains can easily command $100,000+.

Here are the top 10 domain name sales of all time.

1. Sex.com — $13,000,000
2. Fund.com — $9,999,950
3. Porn.com — $9,500,000
4. Porno.com — $8,888,888
5. We.com — $8,000,000
6. Diamond.com — $7,500,000
7. Z.com — $6,784,000
8. Slots.com — $5,500,000
9. Toys.com — $5,100,000
10. Clothes.com — $4,900,000

*Other expensive domain names not listed by DNJournal (either because they were sold before 2003 or other assets were sold with the domains):
Insurance.com — $35,600,000
VacationRentals.com — $35,000,000
PrivateJet.com — $30,100,000
Internet.com — $18,000,000
Insure.com — $16,000,000
Hotels.com — $11,000,000
Fb.com — $8,500,000
Business.com — $7,000,000
Beer.com — $7,000,000

20 years ago names like these were bought for only a few $100 in the aftermarket, and the cost for registering them directly — $60! For example, in 1996 “Domain Name King” Rick Schwartz picked up eBet.com for $100, held on, and sold it in 2013 for a whopping $1,350,000.

The good news is, you don’t need millions of dollars to purchase a valuable domain name. Like any inefficient market, there are a lot of great deals out there where people don’t see the value, need money, and sell.

At this point, I bet one or two of you are going to stop reading, jump on eBay, and try to begin amassing your millions.

Before you do…

Here are my “six pillars to starting out”

1. Buy “.com”

Don’t even think about flipping .org, .net, etc. until you have bought and sold a few .com names.

2. Quality over quantity. Period.

Let’s say you have $500 to invest. Do not go out and register 50 domains! Instead, buy one or two, and try flipping them for at least 50% profit.

The fees on auction sites will eat into your returns if you’re not careful. Flippa.com charges $49 to have your domain featured on their homepage. Domain name auctions are a crowded space, so it’s often worth the exposure. That being said, the last thing you want to do is pay more for a promotion than you did for the actual domain name.

3. Research comparable sales.

You will lose a ton of money if you don’t. Namebio.com is a historical domain name sales database containing more than $1 billion in sales, and trust me; it will quickly become your best friend.

4. Look where others aren’t.

As they say, “In the land of the blind, the one-eyed man is king.”

Sellers who know the value of domain names are educated and will try to squeeze out as much money as they can for their domain. As an investor, your goal is to buy something undervalued. Instead of established marketplaces like Sedo and Flippa, try scavaging Craigslist and eBay. Better yet, go to who.is and reach out to the owner of a domain directly. Roughly 1/20 times you’ll find an owner that isn’t aware of the value of their domain.

5. Use Estibot.

Estibot.com is a quick way to gauge whether or not a name is worth investing in, but please, take the appraisal with a grain of salt. Domaining is more art than science and many of the names that Estibot values at $2,000 won’t go for more than $20.

6. Lastly… Learn from others.

My father used to say, “The way you get from point ‘A’ to point ‘B’ is by asking those at point ‘B’ how they got there.” Stalk the forums on namepros.com for at least two weeks before you buy anything.

32 years after the first .com domain was registered, it’s still the Wild West out there. The only way to test your ability to buy and sell is to give it a try. Keep these six pillars in mind, and you’ll be off to a good start.