They buy domain X and then they put generic advertising, maybe keyword based, on a cheap bulk hosted site. They measure for a few days - is this bringing in lots of revenue? If not, they cancel the purchase, using a "grace period" available to users of the registry in case of mistakes - the purchase is unwound and they are refunded the fees. Domain X is now available again.
In principle this is forbidden for major TLDs but it's still possible and unscrupulous vendors help them do it, albeit it may now attract a fee if you do it enough that the TLD registry detects you tasting.
https://en.wikipedia.org/wiki/Domain_tasting explains about this and related practices.
For example, asdasdahbdajsdbajdbhsbdahsdd.com... not worth the $10
ireallylikechicken.com... maybe worth the $10?
(ireallylikechicken.com is available, go squat it and get rich)
> Creation Date: 2020-01-09T19:37:01Z
Registered with Gandi, ironically enough...
And the domain is meta! Response from HTTP GET
> Location: https://news.ycombinator.com/item?id=22001822
I'll give you 20 for it?
Bitcoin price in USD on January 8 2019: $4004.12
Bitcoin price in USD on January 8 2020: $8045.51
I know it was very shortly stopped once people complained, but it goes to show that it has been done before.
Getting rich off domain's - sounds like a solid business plan!
"Does GoDaddy register domains you search?" (2011) https://news.ycombinator.com/item?id=2326790
Within this, was the comment that reminded me which company it was I was talking about (https://news.ycombinator.com/item?id=2327152) - Network Solutions used to do this - and there is a Wiki link in there which gives the process a name! TIL! :)