discuss After latest large new gTLD domain sale, I have renewed my whole .live portfolio until 2025...

This is my last attempt to illustrate why the OP was indeed smart to renew some of his .LIVE domains using a portion of the funds from his recent sale. @xynames asked me to do a .com model based on his portfolio. Here I do a similar one for a hypothetical .live portfolio. Here are the assumptions.

• I assume 100 .live domains are to be kept (this is far more than the OP but a nice round number to work with).
• I assume no additions and a sell through rate of 2% per year.
• I assume none are premium renewals (I don't know if this is true of OP .live portfolio)
• If no renewals are paid in advance I assume in the first year the best rate available according to today's TLD-list ($16.95 at Porkbun).
• I assume that one renewal is paid prior to the 9% price increase already announced kicks in (note I may over estimate this as the increase is 6 to 9% and I can't find the specific value for .live; I have a query in to Donuts re this but the difference will be slight).
• I assume that every 2 years there is a 9% price increase, based on the fact Donuts have kept prices fixed for about 2 years and now have announced a fall 6 to 9% increase.
• You can see how many domains are renewed each year (second column), the projected renewal cost (4th column) and the renewal cost (last column).
• You can add these and see that the total cost for the entire portfolio for the 10 year almost 11 if already one year initial), which comes to $18,865 in total for year by year renewal.
• Alternatively, if one today selected the best multi-year option available today (but not guaranteed to be there in the future) for a non-premium .live domain ($54.13 for an entire 10 year period at West) you would instead pay $5413 for the 100 domain portfolio for renew up front.
• The savings are substantial, more than $13,000. As with the other model I have not assumed the cost of interest on your money that you late and pay later, but with any reasonable interest rate the savings are still well worth renewing in advance.

This is actually the very best I can do to show you why it is incorrect and unfair to say that the OP was unwise to renew in advance. It is of course another question whether any particular domain is worthy of renewing. But if you have the funds available (I totally realize many of us do not currently as @stub points out), and the domain warrants renewal, and if there is an advantageous current multi-year deal offered, the logic of renewing in advance seems very clear to me.

@MapleDots sure go ahead and ask how many PRO members renew in advance, but it seems to me a quantitative model showing which is more economical is a better way to answer than to ask what people do with their holdings in another extension. Anyway, let's just agree to disagree.

@bmugford points out a reason to renew in advance I had never considered - if you have major earnings in the year it makes sense to do renewals that year to help even out your net income and taxes. This also supports what @lolwarrior did.

Anyway, I'm out of this discussion. Thanks for reading. Or not.

Bob

I only do them a year ahead usually, then depending on when I want them as a business expense. I do have some personal names or developed sites that I renew for more, but that's a small percentage.

Sometimes in December to be counted for that year, or beginning of next.

This year I did most of them early, just did my final round a week ago. 98% of my domains don't expire until 2020. The 2% I plan to drop or I know I will sell cheap. I'm going to sell some of those domains that don't expire until 2020, this year, so there are going to be some I didn't need to renew but it's only $8.47 a renewal, so not worried about it. And with my renewals out of the way, I know the rest of my budget is going to go to new acquisitions.

As far as end users, never in my life as a buyer have I cared when a domain expires, I imagine most who buy don't care either. The name is the most important thing, and renewals being about 8 or 9 bucks, it's a trivial amount compared to the sale price.

I just rechecked some .COMs of Michael Berkens - I see 2020... so 1 year ahead (classic behaviour).

Bob, We got it. Your theory is based on a 4.5% - 6% increase in registration prices year over end that is contradicted by history.

But even if your increase in renewal costs is accepted still your figures are wrong your calculations completely off. For one thing, when you calculate the loss of prepayment on a domain sold in year 1 that is paid out 10 years the loss is $8. (assuming renewal cost of $8. per year) times NINE years, not! two as you seem to have inputed in your calculations.

Now I realize that you figured the loss for each domain sold at only two years per sold domain. Or, you didn’t calculate the loss correctly at all, however you did it. Your loss calculations are completely wrong! The loss for each domain is the ten years of prepayment minus the year sold times the per year cost of registration. If sold in Year 1, figure loss of nine years times $8. = $72. per domain LOST. In Year 2, figure loss of eight years times $8. = $64. per domain LOST. In Year 3, figure loss of seven years times $8. = $56. per domain LOST.

The exact exact figures you need to use Calculus to figure because of your supposed % increase in renewal costs per year but the above figures are close enough and at least correct while your deducting only two years of loss for a domain sold (or whatever you did incorrectly to come up with such a low per domain loss), sold with say nine years of still remaining prepay on it is a completely wrong calculation!

As we established, for a 1500 domain portfolio that is paid out ten years at $8. per year, assuming a 3% sale rate per year, just looking at year 1 the net loss on 45 domains sold x $8 x 9 years wasted renewal is $3240. So even if the price went up 6%, a 6% increase on the $12000. for the year’s total renewal is only $720. So I don’t know what kind of new math you’re using to come up with your end figures - how saving $720. (which I don’t think you’d save even that - but even assuming this 6% increase a year which you’re now saying might be only 4.5%) and at the same time losing -$3240. is profitable, I can’t understand.

xynames said:

Now I realize that you figured the loss for each domain sold at only two years per sold domain. Or, you didn’t calculate the loss correctly at all, however you did

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It takes the number of domains left unsold in each year and multiplies by the assumed renewal rate for that year. It adds those for all years to get the total. All 'savings' as you call them as accounted. It compares that to the sum for paying all years at lower rate in year one.

Obviously the assumed rates of increase can be debated. Donuts have announced 7 to 9 % on almost all their TLDs. .org have said that a 10% per year cap they have now is insufficient and have requested no .cap. The US govt approved 4 yr of 6% per year which with compounding is about 31% over 4 yr. I assumed that continues for .com other 6 yr but that cap continues. In Jan .club announced increases each of next 3 yr. etc.

If you think locking in lower rates on assets you will probably need is not sensible, I am fine you thinking that. But I object to your criticism of @lolwarrior decision to renew at excellent current rates since his course of action is logical and supported as I showed by significant savings even if you assumed no other increases beyond the 9% already announced.

Anyway as I said I am out.

Think what you want but respect that others are entitled to their views and approaches.

Bob

By the way the one (in my opinion) strong reason AGAINST renewing in advance is if the impending renewal will help motivate you to try harder to sell the domain. Some of us need deadlines for motivation. Each person should decide what is right for them.
Bob

I think some people here are not fully right, because if your name(.com or ngTLD anyway) is really Good, you should renew it at least for 3-5 years(not 10 as some people say), because it is showing people who look whois, buyers, brokers, other investors, that you are Serious about this name, and you are not simple "squatter" for 1 year...

xynames said:

Brad, on your website you list about 25 domains as "premium" - do you mean that you pay out several years the renewal fees on many of these 25 domains, which would mean a statistically insignificant number compared to all the domains you hold, or do you pay out "many" of the hundreds (or thousands) of domains you have?

Unless you're talking about paying out several years many hundreds or thousands of domains, it's not relevant for purposes of calculating whether it is a good idea or not.

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I have not updated that section of my website in years. My top 25 domain list would look a lot different if I updated it today.

I am talking about renewing many hundreds, some for several years ahead of time.

Brad

wwwweb said:

As for Brad, I don’t think he is renewing gtlds multi years out, but more so liquid bankable domains which is a whole different scenario.

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Yes. That is exactly right.

There is a big difference between the two. It makes a lot more sense to renew something with high liquid value, where the renewal fee is only a small fraction of the value.

If you are paying for renewals for domains with low liquid value, and low sell through rate, you are actually just potentially expediting the losses.

Brad

I still didn't see any domainer with 2K+ domains and 3+ years renewals ahead...

All this hype is related to micro- and minidomainers only.

GenericDomainz said:

I think some people here are not fully right, because if your name(.com or ngTLD anyway) is really Good, you should renew it at least for 3-5 years(not 10 as some people say), because it is showing people who look whois, buyers, brokers, other investors, that you are Serious about this name, and you are not simple "squatter" for 1 year...

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Many end users countdown that renewal clock on the domain, many domainers let them lapse deep into expiry, only to have end users licking their lips, only at the last minute to have their heart ripped out, and cause the knee jerk reaction of pulling the trigger. There is no simple answer in this industry, as every end user uses different strategies. I have people who have followed a domain for years, only to see it get renewed year after year, finally they come around, but there is no formula for any of this, all about give, and take.

Jurgen Wolf said:

I still didn't see any domainer with 2K+ domains and 3+ years renewals ahead...

All this hype is related to micro- and minidomainers only.

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Could you imagine huge domains 3 years out that would be close to $150M.

As far as the new gTLD's go, it is only fear that motivates renewing them 5 years ahead and that is a VERY poor business, one I certainly would not want to be part off.

I generally don't recommend renewing a large proportion of domains for many years at one time because:

1. We do not know what will happen in the future. Some existing extensions will fail and disappear, while some new better extensions will be launched. There may be new regulations that restrict domaining activities. Or even the worst case is that more advanced technologies may replace domains and the domaining industry may collapse in the future. Due to the uncertainty, it is very risky to renew for many years at one time.
2. Assuming registries increase renewal price yearly, renewing for many years at one time may cost higher than renewing annually because domains may be sold in a few years. E.g. renewing a domain at $8/year for 5 years, the renewal price increases by 5% per year, and the domain is sold 2 years later. The cost of renewing for 5 years (8x5=$40) > the cost of renewing yearly [8+8x(1+5%)=$16.4]. The buyers may not be willing to pay for the cost difference.
3. Opportunity cost may be high as the renewal cost can be used in other better investments.
   
4. Assuming no change in budget, domain portfolio becomes less flexible and you cannot easily adjust portfolio based on the market trend.

Bob Hawkes said:

The last car I bought I prepaid basic maintenance for 4 years because got good rate and liked costs known. True if I totalled car, sold car, dealership went out of business, car stolen, etc. I would not get money back. I viewed them as low enough odds made it worthwhile.

The specific extension here is .live

• Donuts, seems very stable, lots premium renewals help bottom line
• .live has 340,000 registrations (top 20)
• Registrations in .live have never significantly gone down
• Only 34% .live registrations are parked, indicative of healthy end use
• The ratio of Alexa 1M to registrations about 1 to 540, again indicative of strong relative use
• Good spread over different countries and registrars, again a positive stability sign.

I would look at measures like these if that is a concern on an extension. Also remember that paying $30 to $60 for 5 yr of renewal is no different than paying that for an expiring 2 word .com auction for a name that may never sell in your life - they each have risks but can be smart ones to take.

Bob

By the way I agree entirely with your other point that not all potential buyers will add to price due to prepaid renewals. I do personally mention it as feature though.

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Oh ok, I did not know we were only talking about .live, I own none but I can see where the extension can make sense with the best intuitive keywords, it just sucks a lot of them are expensive.

MapleDots said:

As far as the new gTLD's go, it is only fear that motivates renewing them 5 years ahead and that is a VERY poor business, one I certainly would not want to be part off.

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Exactly you should be able to run your business, secure and with the piece of mind that the registry running the extension is a real business and is healthy and might not pull the wool over your eyes and jack up registrations.

And now with that boogeyman out there a registry can manipulate investors just by raising the idea that it might raise prices, get a fair number of people renewing 10 years out and then deciding not to and looking for praise for not doing that, while people who would have never paid many years out, now have that money spent.

I agree with this guy, whoever he is

Bob Hawkes said:

Most domain names do not sell in one year. I have a name I feel has value and will eventually sell. Right now I can renew it at very favourable rates. I think it makes sense to do that. But only selectively for good names where you also can get a good renewal rate.

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Bob

PS Just to be clear, so my models are not misunderstood as recommending you renew your entire portfolio for 10 years (which I obviously don't believe), I only selected 10 years and your entire portfolio, because @xynames commanded me to do exactly that (10 year model with an entire portfolio and his sell through rate) or never post again. Neither @lolwarrior nor me nor anyone else had at any point introduced either your entire portfolio or for a10 year period. So I did the model with those terms upon command, not because I am recommending the assumptions in it.

xynames said:

Let me know the results. If you aren't calculating it right, then don't post at all.

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I was never clear if he meant by not post again unless I calculated correctly exactly what he asked (which I did) not post in this thread or not post in NPs in general. I now see clearly that the right choice would have been the option to not post again.

Jurgen Wolf said:

I sold 10 nTLD domains to endusers...
~$1K per domain on average.

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Today I have sold my 11th nTLD...
Average price remains at the mentioned level...

So my current stats by TLDs:
6 .life
2 .one
1 .TOP
1 .work
1 .club

Buyers from:
Australia
India
Philippines
Russia (2 domains)
Germany (3 domains)
USA (3 domains)

Jurgen Wolf said:

Today I have sold my 11th nTLD...
Average price remains at the mentioned level...

So my current stats by TLDs:
6 .life
2 .one
1 .TOP
1 .work
1 .club

Buyers from:
Australia
India
Philippines
Russia (2 domains)
Germany (3 domains)
USA (3 domains)

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Thanks for your update, and congratulations. I am interested in the TOP you managed to sell (I never got any interest in the handful I have held, except for a couple sales to domainers at a few times my acquisition price). Could you indicate what country the TOP went to? Not asking name or price just clearly you managed to sell one somewhere other than China which is impressive. Thanks.

Bob

.TOP went to Moscow (Russian keyword).

Overall, I agree...
.TOP demand is low... I very rarely get inquiries on them...

Regarding China...
Never had any sales to Chinese endusers... for 11+ years.
Only to Chinese domainers.

Jurgen Wolf said:

Regarding China...
Never had any sales to Chinese endusers... for 11+ years.
Only to Chinese domainers.

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I beleive Chinese endusers mostly prefer to do business with local suppliers. I had a number of afternic fast transfer sales which ended up @ Chinese registrars. With an exception of 1 enduser who contacted me (in Chinese), and with some auto-translation work on my end we had the deal confirmed... he paid promptly, using CN-based Alipay through NameSilo marketplace. It was pure .com ....

Would be interesting to find out what (if any) gtlds except .cn and .com.cn Chinese endusers (not domainers) really prefer...

Strangely... why they don't contact the seller directly (via Contact Form)... probably, their FIREWALL...
Because to other countries from this region I had sales...

On Sedo, when I used it actively in the past, I also didn't receive any Chinese bids.