Understanding the Ins/Outs of Domain Name Speculation

By | May 27, 2011

In this era of high gas prices and tough real estate purchases, the word “speculation” gets a pretty bad rap. If you’re not familiar with the term, a “speculator” is essentially an investor who buys up something with an eye on selling it for a profit when the price goes up. You might be able to see why buying oil or real estate with speculative intentions might carry a stigma with it.

They say that speculators drive prices up or down – whichever’s worse. They say that speculators enhance volatility in the markets. But speculators are just investors, like you and me, and in many cases they can actually make prices stable: they’re buying more when the market is down and selling when it’s up.

Whatever your own opinions about speculation, you came here to WebsiteBroker.com to learn about the “ins and outs” of domain name speculation. So without any further ado, let’s take a look at what flipping sites might look like in this day and age.

Buying Low, Selling High

Speculators have one mantra: buy when prices are down and sell when prices are up. But the market for domain names is so wide-reaching that it can be hard to say when they’re down or up. For example, even when the economy’s bad, domain names that focus on saving people money might be up. The key for the website speculator is to buy domain names that have potential – and sell them for much higher when someone comes along looking for the same thing.

Some people might call these speculators squatters – people using space in order to sell it, without any real intention to provide people with any sort of value. But from one perspective, a squatter can be a good thing. Sometimes they keep corporations from buying up a domain you might have wanted. Sometimes they might even work as a de facto “holder” for you until you can come up with the money to buy the site. There are pros and cons wherever you look.

Should You Be a Domain Speculator?

Put quite simply, it’s up to you. But domain speculation can be a lucrative business if that’s what you’re good at. And whatever your own feelings about speculation, there are certainly some arguments that suggest speculation is just part of a free market of constantly-flowing trade. It might not be either “good” or “bad,” but simply another way of making money in an economy that shifts more and more to an online model. Domain speculation can be inconvenient for some at times, but it can be convenient at other times.

If you’ve already done speculation in the past – such as flipping houses or even just fixing up old cars – you might be interested in purchasing domain names with an eye on one day selling them, as well. Keep reading all across this site for more tips on doing just that. You can also buy, sell, and trade domains using WebsiteBroker.