Investors can sell domain names retail, to end users, or wholesale, to other investors who will seek to resell the names. In most, not necessarily all, cases, the pricing will be substantially different. This is because the investor buying wholesale must account for his or her costs, and also the possibility that the name will not sell.
Should domain name investors sell both wholesale and retail, or concentrate just on one? Are there times when it is appropriate to sell wholesale, even if in general you emphasize retail sales? Are there downsides of mixing wholesale and retail sales?
Data
I polled NamePros members on whether they sell wholesale or retail or a mix of both. The results for the 114 respondents are shown below.
Among those who responded, 31.6% sold strictly wholesale, with 10.5% concentrating on wholesale transactions. The rest had some mix, with 17.5% selling mainly retail, with just the occasional wholesale transaction, while 40.4% had a deliberate mix of both sales to other investors and to end users.
I asked the same question in a Twitter poll, obtaining 156 respondents. The results of that poll, shown below, indicated a stronger focus on retail.
Among Twitter respondents, 45.6% say they sold strictly retail, while only 3.8% sold mainly wholesale.
Type of Buyer Not Always Clear
Several people commented that it is often not clear whether the buyer is an investor or end user. @Future Sensors wrote:
It really is about the price, not whether the prospective buyer is a domain investor or not, as @lock expressed
@biggie pointed out that the dividing line between retail and wholesale is far from clear, and stressed that it is about price, not identity of the buyer.
Hanif pointed out the if you list your names make offer, they may end up being purchased by domain investors or end users.
The NamePros Blog article Who Bids On High-Value Domain Auctions provided evidence that a number of the buyers, even for high-value closing auctions at venues used by investors to buy names, seemed to be end users.
The Arguments for Retail Only
Here are some arguments for not touching wholesale, and doing retail only.
The Arguments for Some Wholesale
But there are also arguments for a wholesale focus, such as
A wholesale focus makes most sense for certain situations.
Probably the best place to sell wholesale is right here at NamePros. This is a huge community of people regularly acquiring names. Also, listing is easy, and there are no commission or listing charges. Your account level will set the number of concurrent active marketplace listings.
Many focus on single-name auctions, but remember there are many selling formats allowed. Always check the rules before listing. Here are some selling options:
While NamePros is a great place to sell wholesale, there are other options. Any of the registrar marketplaces are an option, and have many listings at wholesale pricing. No doubt that GoDaddy Auctions gets the most eyes.
While search is slow at the recently reconfigured Namecheap Marketplace, one advantage it has for listing wholesale is the standard presentation of names includes measures sometime considered by investors, such as number of registered TLDs, search volume, Estibot valuation, and domain age.
If you are into brandable names, some brandable places have a wholesale section to sell to other investors.
There are a couple of specific places geared to wholesale transactions. Domain Name Wholesale Exchange DNWE is a members-only wholesale market open only to authenticated domain investors. There is an annual membership fee at DNWE, but no commissions. One advantage is DNWE listings are invisible to the public, so you can keep domains listed elsewhere at retail prices until they sell.
Particularly for names nearing expiry, the Dutch Auction format NameLiquidate is an option to consider. All names start at $998 USD, decreasing by $6 each hour over a 7 day period. The default is to end at $9, but the seller can set a different reserve ending price. While Epik names can be listed directly from their control panel, you can list domain names from any registrar and for any extension.
Final Thoughts
NamePros member @NewDayBrand provided the following comment on his personal experience both in wholesale and retail sales. As he writes,
For many investors, it may make sense to do some mix of wholesale and retail sales. Even if you sell mainly wholesale, I think the case is strong to list at least a few names at strong retail prices. If your focus is almost entirely retail, regular portfolio re-evaluation makes sense, and why not generate something from names you plan to drop anyway?
When selling wholesale, remember your pricing to other investors must take into account that investor is taking on the risk that the name may not sell, or at least not sell for a profit. As a rule of thumb, your selling price will probably need to be not much different from what you would pay today to acquire a similar domain yourself. That may still be substantially more than you paid for the name, particularly if you have held it for years, although for other names it may be unreasonable to aim to fully recover your invested costs.
Readers, please add your own experiences.
Thanks to those who voted in the polls and who contributed comments.
Should domain name investors sell both wholesale and retail, or concentrate just on one? Are there times when it is appropriate to sell wholesale, even if in general you emphasize retail sales? Are there downsides of mixing wholesale and retail sales?
Data
I polled NamePros members on whether they sell wholesale or retail or a mix of both. The results for the 114 respondents are shown below.
Among those who responded, 31.6% sold strictly wholesale, with 10.5% concentrating on wholesale transactions. The rest had some mix, with 17.5% selling mainly retail, with just the occasional wholesale transaction, while 40.4% had a deliberate mix of both sales to other investors and to end users.
I asked the same question in a Twitter poll, obtaining 156 respondents. The results of that poll, shown below, indicated a stronger focus on retail.
Among Twitter respondents, 45.6% say they sold strictly retail, while only 3.8% sold mainly wholesale.
Type of Buyer Not Always Clear
Several people commented that it is often not clear whether the buyer is an investor or end user. @Future Sensors wrote:
It really is about the price, not whether the prospective buyer is a domain investor or not, as @lock expressed
@biggie pointed out that the dividing line between retail and wholesale is far from clear, and stressed that it is about price, not identity of the buyer.
Hanif pointed out the if you list your names make offer, they may end up being purchased by domain investors or end users.
The NamePros Blog article Who Bids On High-Value Domain Auctions provided evidence that a number of the buyers, even for high-value closing auctions at venues used by investors to buy names, seemed to be end users.
The Arguments for Retail Only
Here are some arguments for not touching wholesale, and doing retail only.
- If you sell from your own site or social media account, mixing wholesale and retail pricing can be confusing to potential clients.
- If you restrict your sales to retail, you will be more apt to acquire carefully, since each name is a long term investment.
- It is time consuming to run a wholesale operation, as you need to acquire, list and possibly negotiate many names for limited profit.
- It will generally be much more lucrative to sell retail.
- If you view the ultimate goal is getting names developed, why not sell to the people who want to do that?
The Arguments for Some Wholesale
But there are also arguments for a wholesale focus, such as
- Your holding time, and renewal costs, will be reduced.
- The higher rate of sales will help you evaluate more quickly the type of names with value.
- You can be more nimble, changing directions according to business and social trends.
- It is possible to operate with a smaller initial investment.
- The frequent sales may help keep you interested in domain investing.
- Some like the social interaction with other domain investors, particularly if your wholesale transactions are on a platform like NamePros.
A wholesale focus makes most sense for certain situations.
- You want to change directions, perhaps focus in different extensions or sectors. By raising some funds through selling off names that no longer fit your investment plan, you generate funds to invest in new ways.
- I think for some new investors a wholesale focus may make sense as they start out. True, the profit per sale will be low, but by seeing what other investors will buy, you can tune your domain name selection skills, as well as more accurately estimating the worth of different names.
- You have limited funds to invest, but a fair amount of time to put into domain investing.
- Clearly one situation for wholesale transactions is when you have a cash flow problem.
- Another frequent reason people sell wholesale is that they want to recoup costs from domain names about to expire.
Probably the best place to sell wholesale is right here at NamePros. This is a huge community of people regularly acquiring names. Also, listing is easy, and there are no commission or listing charges. Your account level will set the number of concurrent active marketplace listings.
Many focus on single-name auctions, but remember there are many selling formats allowed. Always check the rules before listing. Here are some selling options:
- Single Name Auctions This NamePros Blog article, Optimizing Your NamePros Auctions, covers how to list, things to consider, and how to optimize chances for bids. Make sure that you have included all the required elements.
- Multiple Name Auction If getting rid of domains of a certain sector or type, it may make sense to auction them as a package. I would not do this with unrelated names, however. You will get less than if they were auctioned individually, but it is less work.
- ‘One From List’ Auction One problem is to get initial interest in an auction. You can increase chances for bids by combining several names in an auction where the winner can select any one name from the list.
- Fixed Price Maintaining an active auction takes time, and you may prefer to list names in the Fixed Price section of NamePros.
- Bargain Bin If you are willing to sell your names for $20 or less, consider listing them in the Bargain Bin section.
- Make Offer You may simply want to not even fix a price, and list names as Make Offer.
While NamePros is a great place to sell wholesale, there are other options. Any of the registrar marketplaces are an option, and have many listings at wholesale pricing. No doubt that GoDaddy Auctions gets the most eyes.
While search is slow at the recently reconfigured Namecheap Marketplace, one advantage it has for listing wholesale is the standard presentation of names includes measures sometime considered by investors, such as number of registered TLDs, search volume, Estibot valuation, and domain age.
If you are into brandable names, some brandable places have a wholesale section to sell to other investors.
There are a couple of specific places geared to wholesale transactions. Domain Name Wholesale Exchange DNWE is a members-only wholesale market open only to authenticated domain investors. There is an annual membership fee at DNWE, but no commissions. One advantage is DNWE listings are invisible to the public, so you can keep domains listed elsewhere at retail prices until they sell.
Particularly for names nearing expiry, the Dutch Auction format NameLiquidate is an option to consider. All names start at $998 USD, decreasing by $6 each hour over a 7 day period. The default is to end at $9, but the seller can set a different reserve ending price. While Epik names can be listed directly from their control panel, you can list domain names from any registrar and for any extension.
Final Thoughts
NamePros member @NewDayBrand provided the following comment on his personal experience both in wholesale and retail sales. As he writes,
For many investors, it may make sense to do some mix of wholesale and retail sales. Even if you sell mainly wholesale, I think the case is strong to list at least a few names at strong retail prices. If your focus is almost entirely retail, regular portfolio re-evaluation makes sense, and why not generate something from names you plan to drop anyway?
When selling wholesale, remember your pricing to other investors must take into account that investor is taking on the risk that the name may not sell, or at least not sell for a profit. As a rule of thumb, your selling price will probably need to be not much different from what you would pay today to acquire a similar domain yourself. That may still be substantially more than you paid for the name, particularly if you have held it for years, although for other names it may be unreasonable to aim to fully recover your invested costs.
Readers, please add your own experiences.
- Have you tried both wholesale and retail?
- Over your time in domain investing, has the mix changed?
- If you were giving advice to someone starting out, would it be retail or wholesale or both?
- Under what situations do you sell wholesale?
Thanks to those who voted in the polls and who contributed comments.
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