The domain name sell-through rate is the percentage of domain names that sell in one calendar year. For example, if your sell-through rate was 2% and you had 400 domains in your portfolio, on average you would expect to sell about 8 domain names per year. In this post I look first at the apparent industry-wide domain name sell-through rate, and then from that estimate the actual sell-through rate. The important figure, however, is not the industry-wide rate, but your personal sell-through rate. That will depend on several parameters including the quality of your domain names, pricing, and your approach to selling. Apparent Sell-Through Rate It is easy to calculate the current apparent industry-wide sell through rate. In the past year NameBio show about 106,900 domain name sales. Dofo Advanced Search can be used to find the number of domain names currently for sale across all of the major sales platforms. On the day I checked (Nov 18, 2019), there were about 22,444,000 domain names listed for sale. Combining those two numbers yields an overall apparent industry-wide sell-through rate of 0.476%. One can similarly calculate the apparent sell-through rate for any particular domain extension. For example, these are the values for the main legacy extensions. .com 0.601% .net 0.387% .org 1.053% all TLDs 0.476% We see that both .org and .com have better sell-through rates than the industry as a whole. Note that depending on the day you search, the Dofo and NameBio numbers will vary slightly, as will the computed sell-through rate. Real Sell-Through Rate The problem with apparent sell-through rates, however, is that NameBio does not include all domain sales, nor does Dofo have access to all domain names that are currently for sale. I think that the Dofo value is probably a good estimate of the real number of domain names actively for sale. Dofo include domain names from the largest sales venues such as GoDaddy, Sedo, Afternic, and Undeveloped/DAN, as well as the main registrar marketplaces including Dynadot, Namecheap, Epik, and NameSilo, and a growing number of other places that domain names are sold. It is true that they are missing domain names that are only listed on individual domain investor websites, as well as much of the content at brandable marketplaces. On the other hand, Dofo over estimate due to domain names that are no longer actively for sale but were left listed on domain marketplaces. It seems to me based on personal experience that some of the marketplaces have a few percent of names in this category. Therefore, I would say that Dofo misses some names actively for sale, but not many, and includes a few names no longer for sale, but the overall number is probably a good estimate of the total number of names for sale. The NameBio database only includes a fraction of the total number of domain name sales. This is simply because of which venues report to NameBio. For example, most sales that take place at Afternic and DAN/Undeveloped are not included, nor are many of the registrar marketplace sales. For Sedo only sales within a certain price range are included, and only if neither the buyer or seller paid an optional fee for privacy. Most registrar marketplace sales are not reported to NameBio unless the seller or buyer report them individually. In general brandable marketplace sales are not included. A few registries report some of their premium sales, but most do not. Some time ago Michael of NameBio provided a list of what was included in the NameBio database. While there have been a few changes since then, I think that it is still pretty accurate. We don’t precisely know what fraction of domain name sales are excluded from NameBio, but given that Afternic and DAN/Undeveloped, as well as many Sedo sales and probably most private sales, are excluded, it must be substantial. I would roughly estimate that perhaps 20% of all domain name sales above $100 are listed on NameBio. If the 20% figure is right, that would mean that that the actual sell-through rate for .com is about 3.0% while the actual rate for all domain names is of the order of 2.4%. In both cases this is based on sales of $100 and above. Clearly if a higher cutoff were used the rate would be much lower since the majority of NameBio reported sales are at modest prices. Why Not Include Sales Less than $100? The publicly-available NameBio database only includes sales of $100 and above. With a NameBio membership plan you can access sales less than $100. If we were to include these sales the sell-through rates would be much higher. For example, looking at .com in the past year, there were about four times as many sales below $100 as above that figure. Therefore the overall apparent sell-through rate would increase by a factor of five and become about 3% (and the real rate another factor higher than that). I don’t think we should be including those sales, however. The majority of sales less than $100 are either transactions between domainers or sales to domain investors on venues such as expiring domain auctions. Since the majority of these domain names do not contribute to the for sale numbers, it is not logical, in my opinion, to include them in sales figures. Some would argue that the sell-through rates I calculated above should be reduced, because some of those sales even above $100 are domainer acquisitions. While there is certainly truth in that view, it is remarkably hard to find a clear cut-off figure for separating wholesale and retail domain sales, and some sales at not much above $100 are end-user retail sales. Overall I personally think $100 is as good a dividing line as any other, but there is no doubt that wholesale prices are increasing over the years and this question should periodically reconsidered. Your Personal Sell-Through Rate Nothing you have read so far in this article applies to you! By that I mean that what matters to your success as a domain investor is your personal sell-through rate, rather than the industry-wide value. Unfortunately, while the personal rate is what is important, it is difficult for new domain investors to estimate their personal rate. Long-term domain investors with large portfolios can look at their own sell-through rates, and adjust their value according to changes in portfolio quality. Probably most successful domain name investors do this instinctively when they evaluate names without specifically thinking of the numbers. I think for each of us it is valuable to compute your own sell-through rate each year, and set a goal of either increasing that rate or increasing the net returns per domain from year to year. Let’s say in year one your personal sell-through rate is 0.5%, but this year you feel your domain portfolio has more quality names and also you are more aggressively listing and promoting your domain names. It is probably reasonable to assume that your sell-through rate should be higher this year, perhaps 1-2%. If you are brand new to domain investing, you will have even less information on which to base a personal sell-through rate. If you sell only in a particular niche, for example brandable domain names, it is possible that announced sell-through rates for that venue may be helpful, since a third party made a decision regarding acceptance in that marketplace. I would suggest that it may be helpful to objectively compare the quality of your domain names with those for sale and sold in that niche. Use Dofo to search for the term, then try to rate your domain name amongst the domain names for sale in that term. Similarly, in a NameBio set of domain name sales, try to place your own names on that list in terms of their overall quality. It may also be helpful to use the Category and Subcategory features of NameBio to generate a comparison list. Improving Your Personal Sell-Through Rate Your personal sell-through rate will depend on a number of factors including the following. The quality of your domain names Most low-quality domain names will never sell, so it is possible to have a personal sell-through rate that is very near to zero. Better acquisitions will lead to higher sell-through rates. How effectively your domain names are listed If you do not have active landers and a listing on at least one major marketplace, lacking other steps to sell your names, your sell-through rate will be very low. On the other hand listing on multiple venues and with superb landers likely improves your rate to some degree. Pricing A few premium names may sell even at very high prices, and low-quality names probably will not sell even at registration prices, but the probability of many sales is sensitive to pricing. Domain pricing is hard, but getting it right will lead to more sales, as this recent post argues. On the other hand, some argue for high pricing, possibly leading to better long-term returns despite the much lower sell-through rates. Inbound or Outbound Some domain investors do strictly inbound, while others actively pursue outbound leads. Clearly this can impact your sell-through rate. There is also promotion including social media or similar contacts that is not traditional outbound but may improve your sell-through rate. Type of Domain Name The sell-through rate depends on the type of domain name you have. For example, an attractively priced liquid domain name, such as a short lettered or numbered .com, or a common and positive dictionary word, can have a sell-through rate near 100%. That does not necessarily mean it is always a good investment, as that depends on the acquisition cost and sales price for the domain name. Buy-it-now Pricing There is a difference of opinion on this, but most seem to support the idea that having a buy-it-now price will lead to more domain name sales since it encourages impulse purchases and eases the process of acquiring the domain name. These and other factors can suggest ways to improve over time your personal sell-through rate. Final Thoughts A huge amount has been written on domain name sell-through rates on NamePros. For example, you can use the following list of NamePros contributions that were marked with the sell-through keyword. Note that one should also search on sell through as sometimes it is written with and without the hyphen. As a tip for effectively searching NamePros, remember that you can use a Google search with the site option. For example, I did a Google search with the following phrase domain name sell through rates site:NamePros.com. It shows more than 15,000 results relevant to this topic. There has been much discussion regarding whether an industry-wide sell-through rate of the order of 2% is a concern. I think most would agree that a higher sell-through rate, if it could be accomplished without significant price reductions, would be beneficial. It is certainly possible that innovation and disruptions may in future result in overall sell-through rate improvements. I don’t think we should regard current rates as a failing, however. Selling domain names is not like selling food items, clothes, cars, technology or even real estate. Each of those products has a clearly established user need and less product differentiation than domain names. Each domain name is individual, so they should not be compared with less differentiated products. I suspect that if we compared the sell-through rate of domains to highly differentiated products with less agreement on worth, such as original works of art by emerging artists, the sell-through rates are probably not all that different. I think one of the biggest concerns with respect to the low sell-through rates is that it means that typically any individual domain name will take many years to sell. We have no guarantee that trends in domain names will not change significantly over the years, and while you wait for a sale your domain name may decrease in value. This is one of the risks associated with domain investing. The domain name could, of course, alternatively increase significantly in value during that period. I would urge readers to keep in mind that sell-through rate is only one factor to consider. Your success as a domain name investor will depend on both the sell-through rate and the net proceeds from those domains that do sell, as well as your costs. What Do You Think? I would love to hear your thoughts on domain name sell-through rates. Please feel free to comment on anything related to the topic, but in particular I would urge responses to the following. What fraction of domain name sales do you believe are reflected in the NameBio database? What is your personal sell-through rate? If you are a long term domain investor, has your rate gone up over the years? Do you think that overall the sell-through rate is too low, and if so, what steps should be taken to change this? Do you feel that it is likely that the industry-wide sell-through rate will increase or decrease in future years?