The internet is present in every part of our lives, and is essential for the majority of businesses. It’s no surprise investors have found a number of ways to make money out of the internet, and one of the most accessible and, in many ways, affordable is buying website URLs or domain names.

Buying domain names

Domain names that are not currently registered can be widely bought from domain registrars for just a few pounds each. The exact price depends to some extent on the registrar, but more significantly on the domain extension, such as .com or .net. Generally, more expensive options are more in demand, and .com is the most popular.

Domain names that have been registered may also be offered for resale by their owners, but often this is because they have been registered by investors who are themselves trying to make money. As such, this is often not a great bet for investment, though if you believe the domain is undervalued or you could make profitable use of it, then there may still be potential.

Making money from website URLs

Using domain names as an investment obviously involves not just buying them but making money from their ownership. There are a few ways that investors have found to do this. The most common involves buying domain names that you believe there is a demand for and then selling them on at an increased price. This means domains that are relevant to popular markets, have strong search marketing potential, and make for easy-to-remember URLs.

Alternatively, some investors buy URLs that they think they can make good use of relatively easily themselves. This involves buying domain names that can be optimised for high-traffic search terms, constructing a low-maintenance, static site – for example, a set of informational articles or an auto-updating feed of links to the latest news stories – and then optimising that site for search traffic and monetising it through channels such as advertising or sponsored links to products.

Is domain name investment profitable?

The big question about domain name investment is whether it is profitable. The simple answer is that it can be, but this is not as simple as many people believe. Those who buy up as many domain names as they can find, a common beginner’s error, often find that this is more likely to be a waste of money. This is definitely an area where quality is better than quantity.

This leads to the next point that potential investors must bear in mind: profitably buying and selling domain names tends to be more time-consuming and take more effort than most people think. It may be true that buying a domain name takes seconds, but working out which domain names are really likely to be in demand, not to mention actually available, takes a lot more planning. Working out how best to price them and finding a buyer, or otherwise monetising them yourself, also takes time and effort. There are also risks, as with any kind of investment, such as difficulty finding buyers or misjudging what will make money. All these things must be borne in mind in deciding whether domain name investment is right for you.