Domain flipping is buying internet addresses cheaply and reselling them at a profit. The pitch is seductive because the headline numbers are real: Voice.com sold for $30 million in 2019, CarInsurance.com for $49.7 million, and a handful of three-letter dot-coms change hands every year for six figures.
The pitch is also misleading, because those sales are not the business. The business is a portfolio of names that mostly do not sell, carrying an annual renewal bill, against a small number that do. Whether you make money depends almost entirely on two numbers that most guides never mention: your sell-through rate, and the minimum commission your marketplace charges.
This guide covers both, along with the fee structures, the legal exposure, and the specific circumstances in which domain flipping is a bad idea.
Marketplace commissions are quoted as percentages, which makes them sound proportionate. They are not, because the major marketplaces also enforce a minimum.
Sedo, one of the two largest aftermarket platforms, publishes its terms openly. Its marketplace commission is 15 per cent on a sale from a Make Offer listing, an auction or a Buy Now listing. Its price list sets a minimum SALES PRICE of 20 USD/EUR/GBP on Category I TLDs, the category containing .com, .net, .org, .co.uk, .io, .ai and .com.au. There is no minimum commission on those. The 60 USD/EUR (45 GBP) minimum applies to its second category of TLDs, not to the common ones.
Work that through. You register a domain for roughly $12, list it, and sell it for $100. A headline eight-fold return. The commission on a $100 marketplace sale of a .com is $15, the 15% rate. You receive $85, and after a $12 registration your profit is $73. Sell the same domain for $60 and the commission is $9, leaving $51. A parked Buy Now listing runs at 10% rather than 15%.
The real drag is not a minimum fee. It is renewals: every year a name fails to sell costs you the renewal, and most names never sell at all. Cheap domains are hard to flip profitably because the carrying cost compounds while the sale probability stays low. The minimum commission sets a hard floor beneath which the platform takes everything, which means the viable business is in names that sell for four figures or more. And those are considerably harder to acquire for $12.
Sedo's published fee list carries several other charges worth knowing before you list:
Afternic, the other major platform and part of GoDaddy, is harder to pin down. Third-party comparisons published in 2026 disagree with each other: some report a flat 20 per cent commission reduced to 15 per cent if you use Afternic nameservers, others describe a tiered structure of 20 per cent under $5,000, 15 per cent plus $1,000 between $5,000 and $25,000, and 10 per cent plus $4,000 above that. Afternic's own pricing page did not serve a readable response when this guide was written.
Sell-through rate is the proportion of your portfolio that sells in a year. It is the number experienced domain investors track and the number beginners never calculate.
Take that seriously for a moment. At a 1.5 per cent sell-through, a portfolio of 200 domains produces three sales a year. Those three sales must cover the renewal cost of all 200.
If your names are the kind that sell for $100 to $300, the portfolio loses money every year, quietly and predictably, while feeling like a business because sales keep occurring.
This is the mechanism by which most domain portfolios fail. Not a bad name, not a missed sale, arithmetic.
Buyers of aftermarket domains fall into a small number of categories, and understanding who they are tells you what to buy.
The advantage of expired names is that many carry existing backlinks and traffic. The disadvantage is that you are bidding against professionals with better tooling.
Automated appraisal tools produce a number instantly, which is precisely their appeal and precisely the problem. They are trained on aggregate data and are poor at the thing that determines value, which is whether a specific buyer wants this specific name.
Appraisal tools routinely value worthless names in the thousands. Sellers then price accordingly, list, and wait years. The tool is not lying, exactly. It is answering a statistical question that has little to do with a sale.
Two cautions on comparables. Reported sales skew high, because large sales get publicised and small ones do not. And a comparable tells you what someone paid once, not what anyone will pay again.
Registering a domain containing someone else's trademark is not a clever arbitrage. It is a recognised category of dispute with an established resolution process.
The Uniform Domain-Name Dispute-Resolution Policy (UDRP) lets a trademark holder file a complaint against a domain registration. If the complainant shows the domain is confusingly similar to their mark, that you have no legitimate interest in it, and that it was registered and used in bad faith, the domain is transferred away. You do not get your money back, and you pay your own costs.
Registering a name specifically to sell it to a trademark holder is close to the textbook definition of bad faith. So is registering a variant of a well-known brand, or a common misspelling of one.
This risk is not theoretical, and it does not require the complainant to sue you in court. Before buying any name that resembles an existing company, search national trademark registers: the USPTO in the United States, the IPO in the United Kingdom, EUIPO across the European Union. And do not buy if there is a plausible conflict.
Nothing here is legal advice. If a name is genuinely valuable and you are uncertain, the cost of an hour with a solicitor is small against the cost of losing the asset.
Administrative Realities
Transfer locks. A newly registered domain, and a domain whose registrant details have recently changed, is locked against transfer to another registrar for 60 days under ICANN policy. This catches sellers who agree a sale and then cannot deliver in the timeframe the buyer expects. Plan for it, and disclose it if a name is inside the window.
Escrow. Never accept payment for a significant domain by direct bank transfer or PayPal without escrow. Escrow.com is the established option and marketplaces build equivalent protection into their own transfer process. The fee is trivial relative to the risk.
Privacy. WHOIS privacy is standard and usually free, but a domain listed for sale needs a contact route. Use a dedicated email address rather than a personal one.
Tax. Domain sale proceeds are taxable. Whether they are trading income or a capital gain depends on your jurisdiction and how you operate, and the distinction can materially change what you owe. Keep records of acquisition cost, renewal cost and sale price per name from the beginning; reconstructing them later across a large portfolio is miserable.
A Worked Example
Consider a realistic first year, run honestly.
You hand-register 50 names at an average of $11, spending $550. You research each one against comparable sales rather than an appraisal tool, and you avoid anything resembling a trademark.
At a 2 per cent sell-through, you sell one domain. Suppose it goes for $1,800. A good outcome for a hand-registered name.
Commission at 15 per cent is $270. You receive $1,530. Against $550 of registration cost, you are up $980 for the year.
That is a real profit, and it is also roughly minimum wage for the hours spent researching 50 names, listing them, and handling enquiries. Meanwhile 49 names come up for renewal, and you must decide which to keep paying for.
Now run the same year where the sale is $300 instead of $1,800. Commission is the $60 minimum, you receive $240, and against $550 of registrations you are down $310.
The difference between those two years is not effort or skill. It is whether the name that sold happened to be worth four figures.
Who should skip this
Anyone who needs income within twelve months. The sales cycle is long and the timing is not under your control. A domain sells when a buyer appears, and you cannot make one appear.
Anyone who cannot afford to lose the registration costs entirely. A portfolio is a set of options that mostly expire worthless.
Anyone attracted by the headline sales. Voice.com is not a case study, it is a lottery result. Treating it as evidence of an achievable outcome is the single most common error in this field.
Anyone unwilling to let names go. The discipline that makes the portfolio work is dropping names that have not sold, and it is psychologically harder than buying them.
Anyone hoping to automate it. Bulk-registering names generated by a tool is how portfolios accumulate renewal costs without accumulating value.
Domain flipping suits someone with genuine commercial intuition about how businesses name themselves, patience measured in years rather than months, capital they can leave illiquid, and the discipline to cut losses annually. That is a narrower group than the marketing suggests, and it is worth deciding honestly whether you are in it before spending anything.
First 90 Days, Realistically
Weeks 1 to 4. Learn valuation before buying anything. Study completed sales on NameBio until you can predict roughly what a name sold for before you look. Register nothing.
Weeks 5 to 8. Buy no more than ten names, hand-registered, each with a written note of why you think it will sell and which specific type of buyer would want it. That note is what you will grade yourself against later.
Weeks 9 to 12. List them. Compare marketplaces on total cost including minimum commission, not just the headline percentage. Set prices from comparable sales. Then wait, and start tracking sell-through from day one.
Expect no sales in the first 90 days. That is the normal outcome, not a sign you have done anything wrong.
Scams That Target Domain Sellers Specifically
Owning a domain that is publicly listed for sale makes you a target. The schemes below are well documented and recur constantly, and the first one catches more new sellers than every other risk in this guide combined.
The appraisal scam. You receive an unsolicited offer, usually far above what the name is worth. The buyer is enthusiastic and moves fast. Then they explain that before proceeding, their process requires a formal appraisal: and they name a specific service. You pay the appraisal fee, typically $50 to $200. The appraisal comes back, and then the buyer either vanishes or explains that the valuation revealed a problem.
The appraisal service is controlled by the scammer, or simply pays them a referral. The domain was never going to be bought. The tell is unmistakable once you know it: a genuine buyer never requires you to pay for anything before a sale. They may want their own valuation, and they will pay for it themselves.
The generalised rule: never pay an upfront fee of any kind to complete a sale. Verification fees, transfer fees, release fees, certificate fees, legal processing fees, all are inventions.
Fake escrow sites. A buyer agrees terms and proposes an escrow service you have not heard of, or a site that looks like a known one at a slightly different address. You transfer the domain on confirmation that funds are held. The confirmation was fabricated and the site belongs to the buyer.
Escrow.com, which handles a large share of legitimate domain transactions, publishes guidance on spotting fraudulent escrow sites: hastily built pages, missing or false company information, and customer service numbers that ring out or answer with a generic recording. Insist on an escrow provider you selected, not one proposed to you, or use the marketplace's own transfer process.
Fake broker approaches. A scammer registers a domain resembling a well-known brokerage, enables WHOIS privacy to obscure ownership, and contacts domain owners claiming to represent a corporate buyer with a substantial budget. The approach is flattering and specific. It ends at a fee request.
Verify a broker independently: find the firm's real website through a search rather than a link in the email, and contact them through the number published there.
Fraudulent renewal invoices. You receive an official-looking invoice for domain renewal from a company that is not your registrar. Paying it either buys nothing or, worse, initiates a transfer of the domain to the sender's control. Renew only by logging directly into your registrar. Never through a link in an email.
Overpayment and reversal. A buyer pays more than agreed and asks for the difference refunded, then reverses the original payment. This is why irreversible settlement through escrow matters more than payment speed.
The pattern shared by all of these is manufactured urgency plus an unusual payment step. A real transaction is slow, boring, and uses infrastructure you chose.
Parking: Small Money, But Not Nothing
While a domain sits unsold, it can display advertising. Parking services including Bodis, ParkingCrew and Sedo's own parking product serve ads on the page and share revenue.
Set expectations correctly. For a typical portfolio of speculative hand-registered names, parking revenue is negligible: often a few dollars a year across the whole portfolio, because nobody types those addresses. Parking becomes meaningful only for names with genuine type-in traffic: former active websites, common misspellings of popular destinations, or generic terms people enter directly into a browser.
This is one reason expired domains with existing traffic command a premium over freshly registered names. A domain earning $30 a month in parking revenue pays its own renewal many times over and can be held indefinitely while waiting for a buyer, which changes the portfolio arithmetic entirely.
Two cautions. Parking a name that resembles a trademark strengthens a UDRP complaint against you, because displaying competing ads is evidence of commercial bad faith. And parking revenue has declined structurally for years as browsers changed how address bars behave.
The Expired Domain Lifecycle
Understanding what happens when a domain is not renewed is what separates people who acquire good expired names from people who watch them disappear.
For most generic TLDs the sequence runs roughly as follows, though exact periods vary by registrar and registry:
Expiry. The name stops resolving. The registrant can usually still renew at the ordinary price.
Auto-renew grace period. Typically up to 30 to 45 days, during which the original owner can reclaim the name at standard cost. Many expired names are recovered here. An owner who forgot, not an owner who quit.
Redemption period. Around 30 days. The name can still be recovered but at a substantially higher redemption fee, frequently $80 to $200 on top of renewal. Most names that reach this stage are genuinely abandoned.
Pending delete. Roughly five days. Nothing can be done; the name is queued for release.
Drop. The name becomes available. For anything desirable, it does not reach the open market. Drop-catching services fire registration attempts at the release moment. If more than one service catches interest in the same name, it goes to auction between their customers.
The practical consequence: you cannot simply wait and register a good expiring name. You need a backorder placed with one or more catching services, and you should expect competition on anything genuinely valuable. Services differ in which registries they are effective at, which is why serious buyers place backorders with more than one.
Before bidding on any expired name, check its history. A domain previously used for spam, adult content or a penalised site carries that history into your ownership, and a buyer conducting diligence will find it. The Internet Archive's Wayback Machine shows what the site used to be, and it takes two minutes.
Negotiating a Sale
Most domain sales are negotiated, not bought at list price. A few principles hold consistently.
Do not open with your floor. Buyers expect to negotiate and an immediate acceptance signals you priced too low.
Ask what they intend to build. A buyer with funding and a launch date behaves differently from one browsing. This is not manipulation, it is qualification. And it tells you whether you are speaking to a business or an intermediary.
Do not disclose what you paid. It is irrelevant to the value of the name and it anchors the buyer downward.
Be willing to walk. The single strongest position in a domain negotiation is genuine indifference, because your holding cost is roughly $12 a year. That is a real advantage over the buyer, who wants the specific name and cannot substitute it.
Watch for the low first offer as information. An opening offer of $200 on a name you priced at $5,000 usually means a small business rather than a funded company. That does not make it a bad sale. It makes it a different sale, at a different number.
Consider instalments for larger sales. Marketplaces support payment plans, which can close a deal a buyer cannot fund at once. The trade-off is that you hold the name until the final payment.
Regional Notes
United States. The deepest aftermarket, dot-com dominant. Sale proceeds are taxable; whether they are ordinary income or capital gain depends on whether you are treated as a dealer, and that classification depends on frequency and intent. Worth a conversation with an accountant before your first significant sale rather than after.
United Kingdom. Dot-co-uk has a real domestic aftermarket, though prices sit well below dot-com equivalents. Nominet administers the registry and operates its own dispute resolution service, which is separate from UDRP and in practice cheaper and faster for complainants. Meaning trademark exposure on a dot-co-uk is if anything easier to enforce against you.
Australia. Dot-com-au historically required an Australian presence and a connection to the name, which suppressed pure speculation. Eligibility rules have been reformed and continue to evolve; check current registry policy before buying, because a name you cannot lawfully hold is a name you cannot sell.
Canada. Dot-ca requires Canadian presence to register. That restriction limits the buyer pool but also limits competition among sellers.
Across all of them, the same rule applies: a country-code domain sells into that country's market. Do not assume a British buyer for a name that only makes sense in American English.
Keeping Records That Survive a Tax Enquiry
A domain portfolio generates a large number of small transactions across several platforms, and reconstructing them years later is genuinely difficult. Set up the system before you need it.
For every name, record acquisition date, acquisition cost including any auction premium, registrar, renewal date, every renewal paid, and eventual sale price with commission deducted. A spreadsheet is sufficient; the discipline matters more than the tool.
Two reasons this matters beyond tax. It gives you the sell-through rate and the true per-name cost, which is the only honest measure of whether the portfolio works. And it forces the annual renewal decision to be made on evidence rather than attachment.
Consolidating registrations at a single registrar makes the record-keeping considerably easier, at the cost of concentrating risk. Most investors accept that trade.
Pricing a Name, Step by Step
Pricing is where most portfolios go wrong in a way that is invisible for years. Price too high and nothing sells while renewals accumulate. Price too low and the minimum commission eats the sale. Here is a method that survives contact with reality.
Step one: find twenty comparables, not three. Search completed sales for names matching yours on structure rather than meaning. If you hold a two-word dot-com combining a common adjective and a common noun, search for other two-word dot-coms of that shape. Meaning matters less than pattern, because buyers are pricing a category.
Step two: throw away the top and bottom. The highest comparable sold to a buyer with an unusual reason and the lowest went to someone who caught a motivated seller. Neither predicts your outcome. Work with the middle of the distribution.
Step three: adjust for extension honestly. A dot-net or dot-org equivalent typically sells for a fraction of the dot-com, and the discount is larger than sellers want to believe. If your comparables are dot-com and your name is not, apply a substantial reduction rather than a token one.
Step four: set the Buy Now above the middle, and a floor you will genuinely accept. The listed price is an anchor, not a prediction. The floor is the number below which you would rather keep paying $12 a year, and you should decide it before a buyer appears, because deciding it during a negotiation produces regret in both directions.
Step five: check the floor against the minimum commission. If your floor is $150 and the marketplace minimum is $60, you are netting $90. Ask whether that justifies the years of renewals. Frequently it does not, which is a signal the name should never have been registered.
A note on Buy Now versus Make Offer. Buy Now converts more sales and converts them faster, because a large share of domain buyers want to complete a purchase without a conversation. Make Offer preserves the possibility of a higher price from a buyer who really wants the name. The honest trade-off is that Make Offer produces more enquiries and fewer sales, and many of those enquiries are the scams described earlier.
For most portfolios of moderate names, Buy Now at a researched price outperforms Make Offer, because the value of your time answering enquiries is real and the upside on a $2,000 name is limited.
The Portfolio Mistakes That Recur
Buying on volume. Registering 500 names because each is only $10 produces a $5,000 annual liability against a portfolio you cannot individually justify. Quality does not average out; renewal costs do.
Falling for keyword tools. Software that generates available names by combining high-search-volume keywords produces exactly the long, unpronounceable, multi-word names that never sell. Search volume for a phrase is not evidence that a business wants to be called it.
Confusing traffic with value, and value with traffic. A name with type-in traffic has parking income and a plausible buyer. A name with search volume for its keywords has neither, unless a business wants the brand.
Renewing everything. The annual renewal cycle is the portfolio's only pruning mechanism. Using it properly means letting go of names you were once excited about, which is the hardest discipline in the field and the one that determines long-term profitability.
Ignoring the extension's renewal price. A promotional first-year registration at $2 that renews at $45 is a trap, and it is a common one among newer TLDs. Check the renewal price, not the acquisition price, because you will pay the renewal many more times.
Selling too cheap out of relief. After two years of silence, a $250 offer on a name you value at $2,000 feels like vindication. It is usually better to hold, because the arrival of one buyer is weak evidence that another will not appear, and your holding cost is trivial.
Treating an unsolicited approach as validation. Most unsolicited offers on a listed domain are either lowballs or the appraisal scam. A genuine buyer usually arrives through the marketplace listing, not through a personal email.
What the First Sale Teaches
Nearly everyone who completes a first sale reports the same two surprises.
The first is how much the fees take. A $1,200 sale becomes $1,020 after a 15 per cent commission, then less again after payment processing, and it arrives weeks after the buyer agreed. Modelling net rather than gross from the start avoids the disappointment and, more importantly, changes which names you buy.
The second is how ordinary the buyer turns out to be. The mental image is a corporation with a budget; the reality is usually a small business owner who wanted a better name and negotiated hard. That reframing is useful, because it tells you what to buy next: names that ordinary businesses need, not names that sound impressive.
Domain flipping rewards patience, arithmetic and a willingness to be wrong about names you liked. It punishes volume, urgency and attachment. If that trade appeals, start small, track everything, and judge the portfolio on sell-through rather than on the one name you are certain about.
After You Accept: How Transfer Actually Works
Agreeing a price is not the sale. Delivery is, and sellers routinely lose deals here by not knowing the mechanics.
There are two ways a domain moves. A registrar push transfers the name between accounts at the same registrar. It is fast, often instant, and it is the smoothest option when both parties happen to use the same provider. A full inter-registrar transfer moves the name to a different provider and takes up to five days, requiring you to unlock the domain and supply an authorisation code, sometimes called an EPP code or auth code.
Before agreeing a completion date, check three things. Whether the name is inside the 60-day post-registration or post-contact-change transfer lock. Whether WHOIS privacy needs disabling for the transfer to proceed, as some registrars require. And whether your registrar imposes its own hold after a payment method change.
Where escrow is involved, the sequence is: buyer funds escrow, escrow confirms funds held, you initiate the transfer, buyer confirms receipt, escrow releases payment. Do not transfer before confirmation of funds, and do not accept a screenshot as confirmation: log into the escrow account yourself.
If a buyer pushes to complete outside the marketplace after meeting there, decline. Marketplaces charge commission partly for handling exactly this, and the request is a common prelude to non-payment.