Make Money From Domain Names

There are lots of different ways of making money online, but one often overlooked is making money through domain names themselves. The domain name is the address of the website - for example Microsoft.com, or coca-cola.com.

Domain names are commodities like any other, and so are valuable and tradable. These two examples given are trademarked, and so are valuable for that reason in itself, but there are many generic domain names which still have great value.

An extreme example is diamond.com, which recently sold for $7.5million. Obviously, not all domain names fetch that sort of money, but on a more down to earth level, there are lots of domain names which have some value.

So, how do you actually make money from domain names? There are 3 ways to generate income.

1. Parking the domain, and using Pay Per Click (PPC) advertising

Parking is a very simple strategy. It relies on natural traffic from people who just take a chance that there's a site called, for example,'florist.com', or books.com, and type it into their browser.

If there is, and it's yours, you'll get that natural traffic, or 'type-in traffic' coming to your site. About 10 to 20 percent of Internet searches worldwide are done this way, so that's adds up to a lot of traffic every day. Park your domain name at a domain parking network, and all this natural traffic will be sent straight to a site full of relevant pay per click ads, and that's where your money comes from.

2. Affiliate marketing

Affiliate Marketing can be very profitable if you have natural traffic, but here you have a slightly more active role than in PPC Parking.

Rather than having adverts placed for you, you sign up to affiliate programmes. You, as an affiliate, then advertise other peoples' products and for each actual sale, you get paid a percentage of the sales proceeds. Your share will vary a lot from one product to another, but some pay up to 75% commission. A good starting point is clickbank.com.

Of course, you can always sign up to place pay per click ads on your affiliate site as well.

3. Buying and Selling Domain Names

This strategy probably requires the most time and effort, but it can be the most lucrative. Domain names are the 'real estate' of the Internet. Being able to locate a website 'store' on a prime domain name that gets natural traffic is like having the best spot in every high street.

It is difficult to get the very best spot (most of them are gone), but you'll still be able to find a lot of lower value domains, and many of them will be worth something to someone. In the meantime, you can increase the value of the domain using the first 2 strategies.

If you hold on to a domain for some time, you can develop it and make money from affiliate links or PPC parking. This revenue shows a potential buyer how desirable it is, putting you in a stronger negotiating position. Higher traffic volumes to any particular domain will create higher earnings, and therefore make the domain more valuable.