LLLL.coms and Domain Name Arbitrage
LLLL.coms are obtainable for $20-$25 and relatively easy to resell for $30-$40. Do I smell opportunity? While many small players in the LLLL.com space complain about having limited funds and how that limits their ability to make a serious stake in the extension, a whole gang of domainers are making profits, sometimes upwards of $100 a day (count me in that group) by merely buying underpriced LLLL.coms and reselling them for their current market value.
Unlike what some would have you believe, it’s not all that hard to get started in the LLLL.com arbitrage business either… It will definitely take some time before you see the level of success some of us are seeing — most of my business is through repeat customers, so building up that list is essential. Good service, prices, and LLLL.coms available for purchase really go a long way towards forming lasting long term relationships. Don’t forget to build contacts on the other end… That dropcatcher who’s great at catching names but has limited monetary resources just might be willing to flip his names to you at a discount if you opt to buy them in bulk… You’ll never know if you don’t ask!
4 Letter Noob 
hi Reece – just remember, you’re earning your money by putting it on the line and assuming some risk that resale price may not go much higher, or could even go lower, at least in the short term (and certainly at least theoretically in the long term as well). But if you can afford to take on that risk, then you certainly are providing value to the market by “adding liquidity” (as hedge funds claim to do in an ideal world) – as well as adding your own analysis of fair value, and the time and effort involved in calculating that value (whether consciously or not). And, as you mention – also providing trustworthy, reliable service from a trustworthy trading partner – which certainly should have a $ value as well. I can see being happy buying or selling with at least a 5% “market maker” spread factored into the equation – versus taking my chances that 1 out of 20 deals I do with an unknown partner might end up delayed or otherwise derailed. (Just some very approximate “what if” numbers, I haven’t had any problems in over 40 trades on eBay and NP so far – though I have also passed on a few when I wasn’t sure about the reliability of the person on the other end of the trade …)
Bottom line is – you are earning that money in several worthy ways. And it might seem like easy money right now, but in the long run, you really will be doing a bit of work to earn a good (hopefully great) profit. Well, hey – keep up the good work!
Thanks for the very well thought out reply filter! 🙂
You’re 100% right and I’m sure a good chunk of my business is indeed performing some kind of similar analysis and realizing it may be worth paying 5% more for a guaranteed smooth transaction than chance it with someone you don’t know and perhaps have that 5% chance it doesn’t work out or at least not smoothly…
And yes, there certainly is risk involved in doing what I’m doing… The sheer fact that I’m paying near full market prices for the names rather than hunting around for bargains and reselling the names for slightly over the going rate opens up the very real possibility that any decline in the LLLL.com market can hit my bottom line profoundly.