Once upon a time, domain trading was synonymous with making a quick buck online. And some people have got extremely rich doing so. But the majority of domain traders are still waiting for that life-changing deal.

Back in the early 90s Rick Schwartz was a furniture salesman. A tough job. But in 1995 the US native stumbled upon a new idea, somewhere between kitchen tables and upholstered furniture: he could just go out and buy internet addresses and sell them on for a profit. So he got out of the furniture game and bought a huge number of domains. It was a decision that he would never regret. Today, he is one of the most prominent figures in the global domain trading business, and one of its most successful investors. Without any false modesty, he calls himself the Domain King. Schwartz registers and buys domains – and is so good at it that every now and again he can sell them on at extremely high prices. In 2003 he parted company with men.com for a cool USD 1.32 million. And he shares his business model with the world on twitter and via his blog. He regularly sends out tweets saying things like: “Domaining is the greatest business ever!!” or “What used to be a game played by only a handful of people is now a flourishing industry.”

Several hours a week dedicated to domain trading
Schwartz has to be something of an outlier in this industry, though. In an interview with domain.com he shares a number of his hottest tips for people looking to get started: “You should start out slow and don’t quit your job quite yet” he says. “Domain trading can be the most rewarding hobby and a fantastic business, if you understand it.”
Trading domains as a hobby? This is where Niels Buntrock comes into the picture. A dedicated family man, he actually has a full-time job as a software developer. But the domain business has a hold over him. “I got interested in it early. I watch the market and keep on going back to buy domains,” Buntrock explains. He devotes several hours a week to his hobby at his home near Hamburg, sometimes more. “But that’s not all down to trading, there’s also admin and preparing for projects.”

Looking for the gold mine
For Buntrock, the kind of success enjoyed by the Domain King remains a long way off. To date, he has only earned a few hundred euros with a handful of domains. “And I’ve learnt some expensive lessons along the way,” he admits. As a result, he is now focusing on the new endings: “Not everything is all that exciting, but I am hoping for some decent performances.” For a long time, top-level domains (TLDs) were almost exclusively made up of country domains such as .at and generic endings like .com. But that all changed with the introduction of a fresh crop of endings known as the new gTLDs. Buntrock shares a word of caution: “I still haven’t found my gold mine.” He thinks he has hit on a strategy that will lead to success in time: “I buy domains that I find interesting. I think about what I could do with this good name, what kind of project I could base on it,” Buntrock explains. things like a web service or a niche marketing page for real estate. “I try to find some meaning in the name that has the potential to add value.”

Domain trader network
Domain trader is not a legally protected professional title. “You don’t need any particular qualifications,” Buntrock confirms. But you do need a lot of experience. This relatively small and closely knit industry has brought Buntrock into contact with plenty of like-minded individuals. One popular place to get together is the annual gathering for domainers in Hamburg, where around 20 domain traders meet up to compare notes. “It is a very good opportunity to talk to other people about their portfolio,” Buntrock says. Participants network and pick up useful tips. “There are a lot of old stagers there who have been trading domains full time for 20 years now. They are genuine experts, entrepreneurs, salesmen with years of experience of domain trading and they also know their stuff from a technical point of view.” Not all domainers bet on the same horse, though. “There are lots of dyed-in-the-wool vendors of .at or .eu endings. Everyone ends up gravitating towards their own niche.” Unlike his colleagues from the Hamburg meet, Buntrock relies on his day job to stay afloat. Patience is the order of the day. “Domains don’t just sell from one day to the next. It often takes years,” he says.

Marketing for domain traders
Domainers either register free domains with resale potential or snap up domains that have already been registered, with a view to selling them on for a profit. Daniel Dingeldey, domain expert and owner of the domainrecht.de blog explains: “The goal is to buy a domain for USD 200,000 and sell it on at a later date for two million.” He outlines the golden rules of domain trading on his blog. In his view, marketing is particularly important. “Imagine that you have a ‘good’ domain and no-one is interested in it.” If you are looking to sell it, you have to make sure that the whole world knows about it.

Picking up the pace
The industry has changed. Many domain traders now use back order service providers. These services automatically register a domain as soon as it becomes available or is deleted. “There are platforms that come to life when domains are deleted,” Buntrock explains. Traders pay a fee that that enables them to snap up domains if they are the highest bidder. “Registering all domains manually would take too long; speed is the order of the day.”
And what drives traders to dip a toe in the world of domains? Niels Buntrock explains: “The hope of finding that one special idea.” The breakthrough, that big pay day. And what about Domain King Rick Schwartz, who has already achieved so much in this field? On his website the American gives an insight into his impressive biography. And under ‘Interests’ he’s put a single word: Success.