- Impact
- 30,438
I'm saying "upcoming" because we ain't seen much of it yet. Anyway.
A month ago in a post I was saying I expect a good year in domain sales. Then April came and .... poof! I was wrong - the downtrend came suddenly and much sooner than I expected.
Although some sellers here still have had a great April, some had their best month ever. And my own April sales? They were normal, because in the first week I sold enough names for the whole month. But then, for 4 weeks (last 3 weeks of April and first week of May), I've had almost silence. Occasional lower value sales I don't count much.
( Edit: I still have some sales here and there in May so it ain't all that bleak for me personally. Plus I have other opportunities as well so I can't complain, overall I am on to a normal month as well )
But I wasn't entirely wrong. And this is what this post is about. Plus, what to do next.
Was just watching Bloomberg and I saw Larry Summers saying that "the tech companies are still going to be the biggest ones during this crisis" - not an exact quote, but anyway. I don't like the guy (at all) but on this, he's right.
I mean, what do we expect to come in here and replace the tech zone as the biggest purchaser of domains (what interests us)? Mom and pop shops? Big pharma? etc - No, the tech is still going to be here. And tech / finance related domains will still continue to sell, albeit at a lower level.
The problem is, though, that fewer names will likely sell. That is already here. Since NASDAQ is already -25% YTD, we can expect that to reflect in most of our sales. Now the question is, what to do about it. Here's what i thought:
- The problem we have is, math will not work out anymore for many domainers. Solution for this is? Get better names, even if pricier. Improve the overall quality of your domains.
Especially those of you guys with lower margins (Edit: and lower value names - I've been there, and got out of that). The higher your % overall profit margin is, the lesser the chance you will go underwater. I know, it might sound counter-intuitive in this market to buy higher priced names; but the less renewal cost pressure you have, the better off you will be.
- Don't renew your questionables. Those of which you aren't 100% sure they will be sold someday for a lump sum. If they don't sell before renewal, let them drop. Chances are you will still find them appearing out on the drops market.
- Don't steep reduce prices. And don't panic. If you decrease your prices right now, you will likely lose overall. The market is used with these price levels and the problem is not one of affordability, but one of demand. Demand will be less (Edit: because tech founders are panicking and will postpone their investment, everyone says hold to your cash right now which is both a safe and dumb advice as we all drive the crisis further with that holding) - but good names still sell for high $$$.
If you reduce your prices a lot, chances are right now you will still sell the same names but for less over the next months etc. So don't do that.
I've reduced some of my prices from say $2988 to $2488 - where they were high anyway - but otherwise nope. Also I've tested sheer discounts and yeah, doesn't work - as expected. So I would still hold to that pricing if I were you.
Besides, if we all start panicking and selling for cheap we will achieve nothing else but drag the whole domain market down.
You can try clearing your expiring ones here on NP though - nothing bad in trying that.
- Stay tuned to what happens and watch the NASDAQ index (and other factors). Including crypto - even if you don't have crypto names, chances are the better bitcoin will be, the better our names will sell as well. Because it's all in the tech bubble that started to burst. And yeah, we have bubble after bubble about to burst next - unfortunately. But it was all expected and predicted in the last years. They say right now, the biggest financial in human history might be happening next. Can't comment on that, but guys like Robert Kiyosaki etc have said it.
- Reduce your buying. This is the worst time to hoard domains. Cut from the list all those that are questionable and stick only to the top ones. Same applies to what you renew - only renew your top ones. The less junk you have, the better off you will be.
And some things that might happen, but we will have to see it first:
- Great names might be dropping and become available for catching or at auctions. Chances are auctions might end with much lower numbers on good names that are worth holding on long term.
- Domain name registration and renewal prices might fall down. I know this hasn't happened (ever?) but at least to me, it is expected to happen. (Edit: the opposite would be a dumb move for the registries)
If ICANN keeps these prices they will soon realize that a lot of their business will go down - and domain investors play a big role in that, we roll like half of their revenue through our portfolios. Decreasing prices will allow us to get more names and still continue to drive revenue not only to the registry but also to the registrars, including through their cut of domain sales etc.
My plans are: I wont' renew half of my portfolio (the questionables), but won't reduce price nor clear for dirt cheap on NP (not worth the hassle for me). Whoever really wants the domain will buy it in the last 2 days or desperately email me after they expired, to make sure they can still get it and not have the name ending in DC public auction - seen that lots of times.
That's it for now, if there is more I remember right now I'll post that. Thanks!
Edit: If you have any such due diligence tips for hard times ahead, don't be shy, please share them as well below. We all NP members here would be glad to learn from you.
A month ago in a post I was saying I expect a good year in domain sales. Then April came and .... poof! I was wrong - the downtrend came suddenly and much sooner than I expected.
Although some sellers here still have had a great April, some had their best month ever. And my own April sales? They were normal, because in the first week I sold enough names for the whole month. But then, for 4 weeks (last 3 weeks of April and first week of May), I've had almost silence. Occasional lower value sales I don't count much.
( Edit: I still have some sales here and there in May so it ain't all that bleak for me personally. Plus I have other opportunities as well so I can't complain, overall I am on to a normal month as well )
But I wasn't entirely wrong. And this is what this post is about. Plus, what to do next.
Was just watching Bloomberg and I saw Larry Summers saying that "the tech companies are still going to be the biggest ones during this crisis" - not an exact quote, but anyway. I don't like the guy (at all) but on this, he's right.
I mean, what do we expect to come in here and replace the tech zone as the biggest purchaser of domains (what interests us)? Mom and pop shops? Big pharma? etc - No, the tech is still going to be here. And tech / finance related domains will still continue to sell, albeit at a lower level.
The problem is, though, that fewer names will likely sell. That is already here. Since NASDAQ is already -25% YTD, we can expect that to reflect in most of our sales. Now the question is, what to do about it. Here's what i thought:
- The problem we have is, math will not work out anymore for many domainers. Solution for this is? Get better names, even if pricier. Improve the overall quality of your domains.
Especially those of you guys with lower margins (Edit: and lower value names - I've been there, and got out of that). The higher your % overall profit margin is, the lesser the chance you will go underwater. I know, it might sound counter-intuitive in this market to buy higher priced names; but the less renewal cost pressure you have, the better off you will be.
- Don't renew your questionables. Those of which you aren't 100% sure they will be sold someday for a lump sum. If they don't sell before renewal, let them drop. Chances are you will still find them appearing out on the drops market.
- Don't steep reduce prices. And don't panic. If you decrease your prices right now, you will likely lose overall. The market is used with these price levels and the problem is not one of affordability, but one of demand. Demand will be less (Edit: because tech founders are panicking and will postpone their investment, everyone says hold to your cash right now which is both a safe and dumb advice as we all drive the crisis further with that holding) - but good names still sell for high $$$.
If you reduce your prices a lot, chances are right now you will still sell the same names but for less over the next months etc. So don't do that.
I've reduced some of my prices from say $2988 to $2488 - where they were high anyway - but otherwise nope. Also I've tested sheer discounts and yeah, doesn't work - as expected. So I would still hold to that pricing if I were you.
Besides, if we all start panicking and selling for cheap we will achieve nothing else but drag the whole domain market down.
You can try clearing your expiring ones here on NP though - nothing bad in trying that.
- Stay tuned to what happens and watch the NASDAQ index (and other factors). Including crypto - even if you don't have crypto names, chances are the better bitcoin will be, the better our names will sell as well. Because it's all in the tech bubble that started to burst. And yeah, we have bubble after bubble about to burst next - unfortunately. But it was all expected and predicted in the last years. They say right now, the biggest financial in human history might be happening next. Can't comment on that, but guys like Robert Kiyosaki etc have said it.
- Reduce your buying. This is the worst time to hoard domains. Cut from the list all those that are questionable and stick only to the top ones. Same applies to what you renew - only renew your top ones. The less junk you have, the better off you will be.
And some things that might happen, but we will have to see it first:
- Great names might be dropping and become available for catching or at auctions. Chances are auctions might end with much lower numbers on good names that are worth holding on long term.
- Domain name registration and renewal prices might fall down. I know this hasn't happened (ever?) but at least to me, it is expected to happen. (Edit: the opposite would be a dumb move for the registries)
If ICANN keeps these prices they will soon realize that a lot of their business will go down - and domain investors play a big role in that, we roll like half of their revenue through our portfolios. Decreasing prices will allow us to get more names and still continue to drive revenue not only to the registry but also to the registrars, including through their cut of domain sales etc.
My plans are: I wont' renew half of my portfolio (the questionables), but won't reduce price nor clear for dirt cheap on NP (not worth the hassle for me). Whoever really wants the domain will buy it in the last 2 days or desperately email me after they expired, to make sure they can still get it and not have the name ending in DC public auction - seen that lots of times.
That's it for now, if there is more I remember right now I'll post that. Thanks!
Edit: If you have any such due diligence tips for hard times ahead, don't be shy, please share them as well below. We all NP members here would be glad to learn from you.
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