Buying and selling a domain name second hand: the do's-and-don'ts

07.12.2016

You have undoubtedly heard the powerfully evocative stories of people who once registered a domain name for a trifle, and sold it later for staggering sums of money. But is this legally permissible? How can you sell your domain name and how is the transfer carried out?

Domain names as investments:  the stories

Did you know that some people have made fortunes by registering a domain name with a certain general word (known as a generic term) very early on, and then sold it for a lot of money?  The figures are staggering.  The top 5 to date are:

  • Insurance.com: $35.6 million (2007)
  • VacationRentals.com: $35 million (2007)
  • PrivateJet.com: $30.18 million (2012)
  • Internet.com: $18 million (2009)
  • 360.com: $17 million (2015)

The full list with all domain names that have been sold for more than $3 million is provided in Wikipedia.

What is permissible?

In principle, the registration of a domain name for purely speculative purposes is not permitted. The intention is to make real use of your domain name in order to host a website, for an e-commerce, or an app. But no one will blame you if you register a domain name because you have plans for a certain project in the future. This is often the first step people take to start their own business.

There are however many legitimate reasons why you would transfer your domain name to a third party. If a third party has concrete plans for a project for which your domain name would be ideal, then it is perfectly understandable that you will transfer your domain name to that other party, for a certain remuneration. If you wish to discontinue your current project, you can then offer to sell that project with the related domain name.  

Conversely, if the domain name that would be just perfect for your project is no longer free, but the current owner does not really use it, you can contact him to reach an agreement on the procedures for a transfer. You can use the Whois function to find out who the current owner is, and you can search on our website for the current owner of a .be, .vlaanderen or .brussels domain name.

Careful with trademarks!

Be careful with registered trademarks: you may not, for instance, register a .be, .vlaanderen or .brussels variant of a registered trademark, i.e. no coca-cola.vlaanderen or disney.brussels. If you do this, and then try to sell the domain name to the trademark owner, you are guilty of cybersquatting. The UN copyright agency, World Intellectual Property Organization (WIPO) and the Belgian Centre for Arbitration and Mediation (CEPANI) have an arbitration system for such cases. Furthermore, the use of trademarks in combination with other words such as apple-winkel.be is strictly regulated.

You can transfer domain names with generic words such as schoenen.be, tapijten.be, kinderoppas.be to third parties for payment or free of charge without any problem, when you change the plans for your project.

How to sell your domain name

If you want to discontinue your project and to transfer your domain name (for remuneration), you can publicise that you are prepared to do so in several ways.
Do not mention on the website of your current project, your web shop or your web service that the domain name is for sale. This will impair the credibility of your project and undermine confidence among your customers.

The best thing to do is to:

  • Approach other parties who have a similar project and offer them the domain name.
  • If you do not have a website in this domain name yet, create what is known as a “parking page,” and mention that the domain name is for sale.
  • Have your domain name auctioned in specialised auction houses such as Sedo.com. In this case, it is best to fix a minimum selling price.

Actual transfer

Once an agreement has been concluded with a third party for the transfer of your domain name, for payment or free of charge, the actual transfer must still be carried out.  The procedure is defined by the Registry, the organisation which manages the domain extension, and may therefore vary.

DNSBelgium.be is the registry for the .be, .vlaanderen and .brussels domain names. You will find the right procedures for the transfer of a .be domain name and for the transfer of a .vlaanderen or .brussels domain name on our website.  For the precise procedures for other domain extensions, it is best to ask your registrar.

WHOIS

Look-up which gives information about the registrant of the domain name, his registrar, the name server and also some information about the domain status. 

registrar

Is the entity that registers a domain name for a company, organization or person. Next to the “resale” of web addresses registrars can also offer hosting services, web design... 

registry

Organisation that handles the registration of domain names. A registry maintains the data base containing information about one (or more) domain name extension(s) as .be, .com, .org, .vlaanderen, etc.

cybersquatting

Harmful practice where a cybersquatter registers domain names that are identical to well known and registered brand names or trade names, merely with the aim of harming the brand name holder or the trader or to sell the domain name at an inflated price.
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