Domain Investing Basics: How People Buy and Sell Names
By Thomas Lovas Lokoy — researched and drafted with AI assistance, then fact-checked and approved by Thomas before publishing · Editorial policy
Domain investing is buying domain names, either by registering unused ones or buying existing ones, and holding them until someone who needs the name pays more than you did. It is a real market, but it is a slow and lopsided one: every name costs a renewal fee every year whether or not anyone wants it, and a sale pays a marketplace commission of 10% to 20% at the largest marketplace we checked. For a beginner the honest answer to "is it worth it?" is: only with a small number of names you can justify one by one, a budget you could lose, and the arithmetic below done before you buy.
How domain investing works
There are three ways in, and each has a different cost profile:
- Hand registration. You register an unused name at the normal registration price. Cheap per name, but anything obvious and valuable was registered long ago, so this is where most beginners lose money on names nobody searches for.
- Expired and dropping names. Names that their owners let lapse are released after the redemption period and can be caught or bought at auction. How to buy expired domains covers that route, and domain auctions explained covers the bidding.
- The aftermarket. You buy a name someone already owns, at a negotiated price, and hope to resell it higher. This is closer to trading than to registering, and how domains are priced is the place to start.
The supply side is enormous. Verisign's Domain Name Industry Brief for the second quarter of 2026 counted 401.6 million registered domain names across all extensions on 30 June 2026, of which 166.6 million were .com. Your name competes for a buyer's attention with every one of them.
The cost side: renewals are the business model
A domain is not bought once. You pay a renewal fee every year you hold it, so a portfolio is a recurring bill. Using Porkbun's published price list as read on 16 October 2026 (USD per year, a registrar that renews at the same rate it registers for .com), here is what holding 50 names costs:
| Extension | Renewal per name | 50 names, one year | 50 names, five years |
|---|---|---|---|
| .com | 11.08 | 554.00 | 2,770.00 |
| .net | 12.52 | 626.00 | 3,130.00 |
| .org | 11.84 | 592.00 | 2,960.00 |
| .co | 31.20 | 1,560.00 | 7,800.00 |
| .io | 51.80 | 2,590.00 | 12,950.00 |
| .xyz | 14.21 | 710.50 | 3,552.50 |
The five-year column assumes renewal prices stay where they are, and the wholesale side says they may not. Verisign, which runs .com, raises its wholesale price to registrars from USD 10.26 to USD 10.97 on 1 November 2026, and its 27 August 2026 SEC filing sets .net at USD 12.00 from 1 March 2027, up from USD 10.91. Whether and when a registrar passes a wholesale rise on is its own decision, but a portfolio plan should not assume renewals only go down.
The other cost is choosing the extension by first-year price. Several newer extensions register for one or two dollars and renew for ten times that; at Porkbun on the same day a .online cost USD 1.96 to register and USD 28.84 to renew. A portfolio built on promotional first years becomes a very different bill in year two. Domain registration cost 2026 lists first-year and renewal prices side by side.
The sale side: what a sale actually nets
When a name does sell, the marketplace or broker takes a cut. Sedo's own seller page, read on 16 October 2026, says its "commission fee ranges from 10% up to a maximum of 20%", explains that sales through its SedoMLS partner network carry 20% rather than 15%, and offers a transfer service for deals agreed elsewhere at 3% of the price. Other marketplaces publish their own rates; read them before you list.
A worked example (an illustration, not a forecast). Fifty .com names held for five years at the prices above cost USD 2,770.00. Suppose one of them sells, once, for USD 3,000 in year five:
- At a 20% commission you receive USD 2,400.00, which is USD 370.00 less than the five-year renewal bill.
- At a 10% commission you receive USD 2,700.00, still USD 70.00 short.
- To break even at 20% with one sale, it has to reach USD 3,462.50 (2,770.00 divided by 0.80).
That is before what you paid for the names in the first place. The lesson is not that investing cannot work; it is that the number of names you hold is the single biggest lever on whether it does. Thirty fewer names in that example saves USD 1,662.00 over five years.
What makes a name sellable
A name is worth what one specific buyer will pay for it, and most names never meet that buyer. The names that do sell tend to share a few traits, none of which guarantees anything:
- An obvious end user. A business, product or profession that would plausibly want exactly this name. If you cannot name three companies that might buy it, the name is a guess.
- Short and easy to say. A name that survives being spoken over the phone without spelling it out.
- The extension that buyer expects. For most commercial buyers that is still .com; for a business serving one country it may be that country's code, and the ccTLD guide covers where country domains have their own demand.
- No one else's trademark in it. This is not a trait of good names; it is a condition of keeping the name at all, and it is covered next.
The risks beginners miss
- Trademarks. Registering a name that contains someone else's brand is the fastest way to lose both the name and the money. A rights holder can file a UDRP complaint, and if the panel finds the name was registered and used in bad faith, the name is transferred. UDRP disputes explained sets out the test.
- Renewal increases. As above, wholesale prices for the two largest extensions are rising in November 2026 and March 2027.
- Forgetting to renew. A lapsed name goes through a recovery window and a 30-day redemption period and is then released, often to a drop-catching service. Domain renewal: how to never lose your domain covers the safeguards.
- Illiquidity. There is no exchange where you can sell a domain at a known price today. A name you need to sell quickly is usually sold cheaply.
- Parking income. Parked pages earn from type-in traffic, but most names receive very little of it; domain parking and type-in traffic explains why parking rarely covers renewals on its own.
Where to hold a portfolio
For more than a handful of names, the registrar's tooling matters as much as its price: bulk renewals, bulk DNS changes, an API, and a way to list names for sale. Dynadot advertises bulk pricing tiers and has its own marketplace, and our Dynadot review covers how it handles a portfolio; you can see Dynadot's current prices on its own site. For a few names, any of the value registrars in our best registrars roundup is fine, and bulk domain registration covers buying and managing names in quantity.
Whichever you choose, keep a simple ledger per name: what you paid, what it renews for, the date it renews, and the one or two buyers you think it suits. A name that has no buyer you can name by its next renewal date is a name to let go.
Frequently asked questions
Is domain investing worth it for beginners?
It can be, at a small scale and with money you could afford to lose. Every name costs a renewal fee each year, sales are infrequent, and marketplaces take a commission: Sedo's published range is 10% to 20%. Fifty .com names at Porkbun's USD 11.08 renewal cost USD 2,770.00 over five years, so one modest sale does not cover a large portfolio.
How much money do you need to start investing in domains?
The minimum is one registration fee, about USD 11 for a .com at Porkbun on 16 October 2026. The useful question is the annual renewal bill you are willing to carry while waiting for buyers, multiplied by the number of years you expect to wait.
How do domain investors sell their names?
Mostly through marketplaces and brokers, which list the name, handle the payment and transfer, and take a commission, and sometimes by direct approaches to likely buyers. How to sell a domain name safely covers listing, pricing and escrow.
Can I get in trouble for registering a domain with a brand name in it?
Yes. A trademark owner can bring a UDRP complaint, and if the panel finds the name was registered and used in bad faith it orders the name transferred. Court action is also possible. Avoid names that contain someone else's brand.
Sources
Last updated:
