A domain functions like an address for your website—the domain name is what people type into the address bar when they go to a specific website. These websites live on servers, which are usually owned and managed by web hosting services.
A parked domain is a domain that’s been registered but isn’t actually in use. Usually, when you buy a new domain, it will automatically be parked until you associate it with a website. Similarly, if you take your website down, your domain will be parked.
So why exactly would you want to park a domain?
There are tons of reasons, including making money, though this isn’t the most common reason. We’ll explain more below.
Why Park a Domain?
Some people buy multiple domains with similar names and park them all.
Why exactly would a business do this?
Parking a domain is a way for a business to protect their brand and keep domains adjacent to their main one out of the hands of competition.
Similarly, some businesses park domains to redirect traffic to their main website. For instance, a company may realize a lot of people type their website name wrong. In that case, the business would acquire the incorrect domain name and park it to redirect traffic to their website.
Some parked domains are just held for future business ideas. If you’re building a business but aren’t quite ready to go live, you might want to buy your domain and leave it parked until you’re ready to launch.
There are a lot of reasons to buy a domain and park it, but no matter your reason, you want to be certain there’s at least some sort of return on investment involved—even if it doesn’t translate into actual revenue.
Domains can cost anything between $1 and thousands of dollars per year, depending on the name and value. If you’re not using a domain, and if you don’t have a solid reason to keep it parked, you’re losing money.
If you find your parked domain isn’t valuable to you anymore, you can always let it go. Alternatively, you can choose to resell it—sometimes for more than what you invested in it initially.
How Do Parked Domains Make Money?
There are two main ways to make money with parked domains: reselling them or using domain parking services.
Let’s take a closer look at each of these options:
Domain Reselling
Like real estate, a domain can decrease or increase in value.
If you want to make money by reselling domains, you’ll want to buy popular domain names and auction them off through a domain broker. They will typically charge a fee—usually between 10% and 20% of the total asking price.
Another way to make money with domain reselling is by keeping it parked long enough to generate traffic, which means its price will be inflated.
So how much can you make from a parked domain?
In 2014, the domain cars.com was acquired for a staggering $872 million.
Okay, that’s a bit out of reach for most of us. Most likely, with a good domain name, you’ll be in the three to five-figure range.
To get started with buying domains, we recommend using one of the best domain registrars, like GoDaddy, Bluehost, or Porkbun.
Domain Parking Services
A domain parking service is a company that displays ads on parked domains. Essentially, every time someone clicks on a link on your parked domain landing page, you can get a fraction of what the advertiser paid for it.
While this might sound like easy money, it’s not a full-time, recurrent revenue—it’s more like pocket money or an extra stream of income that adds up in time.
It’s also not free, so take your estimated ROI into account. Costs you’ll have to consider include the yearly fee for keeping your domain, the domain parking service itself, and, in some cases, even the cost of hosting a website.
As a general rule, estimate that only up to 10% of all traffic that ends up on a parked domain will actually click.
So if you get 500 views per month, and you only get around 50 clicks, you may be looking at just $5 to $25 annually for your parked domain.
How Do Parked Domains Get Traffic?
Even if they are not fully functional websites, parked domains can get traffic. Some of the main ways that happens include:
Direct Navigation
Getting direct navigation traffic for a parked domain happens when the domain used to be associated with an actual website, which has since been taken down. When someone goes to your old website directly, they land on your parked domain and generate traffic.
Typosquatting
Typos are annoying—but sometimes, they can be associated with parked domains and even cybercrime. Believe it or not, some people buy domains that resemble those of existing brands but have typos in their names.
For instance, if there’s a famous website called BrandingForYou.com, a typosquatter might buy a domain called BrandinForYou.com. When someone types the incorrect address, they land on the parked domain.
The person running the website then may try to either phish for personal information or get unsuspecting visitors to click on links that hide malware.
Domain Forwarding
Another way parked domains get traffic is by forwarding to other websites. When someone lands on your parked domain name, they will be automatically redirected to another website, like your online store.
Expired Domains
When a domain expires, the registrar will typically keep it parked for a while before they make it public for purchase again. During that time, the domain can continue to bring in traffic.
How Much Can You Make with a Parked Domain?
There’s no set answer on how much you can make with a parked domain. It all depends on the industry, niche, how it’s associated with popular search terms, and other similar factors. As such, a parked domain can make between $1 per day and several hundred dollars per month. The best ones can make thousands.
Using PPC ads to make money with a parked domain used to be a more efficient business model. But as many people rarely go directly to a website, traffic for parked domains like these has decreased in time.
If you want to make considerably more money from parked domains, consider growing your domain and flipping it for more money. Sites like Flippa are great for this—and you can use your parked domain’s generated traffic as leverage for a better price.
Downsides and Challenges of Parking Domains
The biggest challenge of parking a domain is that to make real money, it takes work.
If you want to use a parked domain simply as a home for generating ad revenue, you probably won’t make a fortune.
To make actual money with parked domains, you’ll need to do your research and choose domain names that may have some resale value. Buy the right domain name, grow it, and then sell it for a profitable price.
Also remember, a domain that stays parked for too long can potentially become a liability in terms of branding. If people keep going to a website and bump into the same message over and over again, the domain’s name might take a branding hit.
Parked Domain vs Addon Domain
Many people mistake “parked domains” for “addon domains.”
A parked domain is a domain that’s not associated with a functional website. An addon domain, however, is an entirely different website with the same IP address as your main domain.
Addon domains are used to host multiple websites without paying for a different hosting account. This can work well for someone who holds multiple parked domains and wants to have them hosted in the same place.
Other reasons for buying an addon domain include:
- Owning microsites for each product or line of services you’re launching
- Launching a new line of your business but associating it with your main site
- Needing to brand a product or service separately
- Buying domain names that are similar to your main website’s domain name to redirect traffic