Yes, buying existing domain names can be profitable too. Existing domains with a potential for profit can be found using Sedo. Make sure you pick domain names that have good traffic, backlinks and Google PageRank under 17 characters. Also, steer clear of existing domain names containing special characters or numbers because they are not likely to be sold.
Thanks for this post. I do good with Adsense and wanted to branch out so I bought 5 domains from Namejet after reading this thread. After the 5 auctions ended I spent $500 total. I contacted 30 people about these domains and after a few bites I was able to sell one of them for $500 so I got my money back and now what I sell the other four for is all profit. The best part about this is that it is not very time consuming. I spent maybe an hour on Namejet. I spent maybe two hours sending out emails. Thanks again!

No, no, no. ToysRUs made a perfectly logical decison that most any business would do and Google tanked them for it. ToysRUs wanted the url toys.com to direct to their site.  They're all about toys and they simply bought a url that described their business and told the url where to take people.  Google tanked them in the rankings because Toys.com came with link juice. Google assumed that Toys.com was doing this to manipulate the search engines but there is just, to my knowledge, ZERO evidence of this.  This is another case of Google caring more about the possible spam threat than the actual rankings for searchers.

To sell a domain name, one should learn to price it. Many sellers fail to sell names in the marketplace, simply because they overpriced the domain, and thereby lost the chance to sell it. A lack of knowledge leads to erratic pricing. Experienced buyers will not try to bargain, unless you have a very rare name. A seller should therefore, understand how good the domain name is. What price will he get from a buyer? What suffix does it carry? For instance, .com names are likely to sell fast and will bring greater profits than, say .info names. Similarly, .net, .org and .in domain names are the best to make decent profit.
Before you park any domain names, you must focus on finding hot keywords that buyers would be interested in. The best way to make sure you get a good return on your investment is to pick a domain name with acceptable traffic, somewhere around 10,000 searches a month. You can do this conveniently by using tools like Google Keyword Planner or Niche Finder Software.
These should be more than enough to get your domain in front of tons of potential buyers. If you did a good job picking an awesome domain, you should have no problem (eventually) selling it. You need to be very patient as it could take months or even more to land a decent deal. A lot of domainers sit on domains for years before actually selling them. This is why it’s best not to obsess over a domain and simply move on with buying and listing others (or going back to your day job if this is a side gig) once you've listed the initial one.
The IP popularity and domain popularity each play a part in the overall quality evaluation. If you come across an expired domain with a high link popularity (i.e. a large number of backlinks), but then poor values when it comes to IP and domain popularity, you can assume that these links were obtained in an artificial way. Domains like these will have already caught the search engines’ attention. Perhaps this is the reason why the domain was abandoned. Users that want to start a serious online project should steer clear of these domains.
Domains are more than a web address. They often have value that extends well beyond their initial registration price. Depending on how memorable it is or how well it ranks on Google, a domain that initially cost a few bucks can be worth a lot of money to the right buyer. That’s why domain auctions exist – to give domain owners an opportunity to sell their name for a profit, and give buyers a chance to get a name that can take their website to the next level.
In the past, expired domains were used as part of black hat SEO in order to generate backlink sources quickly and easily, and this practice is still used somewhat today. Getting links in this way is not a recommendable practice. All relevant search engines work nowadays with highly complex ranking algorithms, which can no longer be outsmarted by these link networks.
That being said, many things have changed over the years. The days of MFA and quick flips are mostly gone. My advice to those new to domaining and wanting to give it a try is to take it slow, do your research, and if you do purchase a domain with the hope of turning a healthy profit - put some real time into it and build something useful. That way it's easier to monetize and easier to sell.
When you see one that looks pretty good you can just click on the bid button and you’ll be taken to Go Daddy Auctions which shows some more information about the domain bidding process, how many people have bid, the traffic potential per month, the price which is now $12. How much time is left? You can make a bid. It’s based on the link profile and it’s relevancy, authority and your budget. This domain looks like a good bet for you.

Many non-savvy internet users may not even be aware of the existence of other extensions. That said, because there are many new extensions popping up every now and then, you can often find amazing one word and 3-letter domain names with these new extensions that are otherwise almost impossible to find unregistered in the .com world. Additionally, these new extensions are becoming more and more familiar to users every day, hence it's almost certain that their value will continue to increase as time passes and wider adoption manifests. 

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