Many have speculated on how the COVID-19 pandemic, and associated business climate, will influence the domain name sales market. In this article I look for statistical evidence of recent changes in domain name sales numbers or total dollar volume.
I also collected opinions from domain investors on what they are seeing in the market, both in terms of inquiries and closed sales. Here is a summary of what I found.
Statistical View of Recent Domain Market
I used the NameBio database to see if domain sales had dropped off during the last month, when the impact from the pandemic would be expected to be most severe. The data below refers to a last month, or last three months, period ending April 13, 2020. That is, last month refers to data from March 14 through April 13, while the three month average is based on a period from January 14 through April 13. For the three month period, I expressed the data in terms of monthly averages, so the two can be compared.
Keep in mind that NameBio data is a mix of retail and wholesale domain name sales, and that only certain sales venues report their data.
Domain Investor Perspectives
I asked the following three questions to obtain investor perspectives on what they are seeing in their own portfolios.
Brandsly, who has a large portfolio of about 7000 domain names, reported that while gross sales of typically $40,000 to $50,000 per month dropped to about one-quarter of that in March, that the early part of April seems to be rebounding nicely.
Josh Reason shared the following perspective:
NameBuyer statistics shows fewer sales compared to the same period last year, but higher revenue:
Abdul Basit reports that sales are still happening, but fewer in number and concentrated at the lower end.
Karmaco reports a stronger March 2020 compared to 2019.
Garptrader shared several recent significant sales, all happening in just a few days, but also pointed out that natural volatility means that one should be cautious about interpreting anything unusual in a short time period.
Nikul Sanghvi of Hypernames, who periodically shares with NamePros readers detailed analyses of his domain sales, provided a comprehensive picture of what has happened in his portfolio lately. He reports that:
F33333 reports:
A similar view was expressed by AnthonyD:
FolioTeam reports more visits but not a correspondingly higher number of sales. She writes:
SuperBrander reported:
A number of people I talked to reported that a greater number of sales are now opting for monthly payment plans. For example, Pay.My.id reports about 60% of sales are on payment plans recently That makes sense in the current economic climate.
The negotiation process, and fraction of successful sales, may be seeing changes as well. Nikul Sanghvi says:
SuperBrander also encountered a failed sale that was attributed to the pandemic:
While OnlineBusiness reported a number of successful sales in March, he also added:
A similar experience was reported by Brandsly who wrote:
Among the areas that seem strong of late, Pay.My.id indicates “health, security and financial” are popular, with others have added education, delivery, digital and remote services. Some suggest that travel and entertainment domains are a tougher sell than usual right now.
I asked about parking, but only a few respondents commented on that. Pablohc86 suggests recent volatility, but overall not much different from the past.
Length did not allow me to fully quote all who responded, so head over to this NamePros discussion thread to read additional reflections on what is happening in the market during the pandemic.
I would like to end with this sensible and optimistic view expressed by OnlineBusiness:
Final Thoughts
While I think there are hints of a changing market, I don’t think that there is clear statistical proof yet.
The entire market is probably down only slightly.
Not surprisingly, with many people at home and on the Internet, there seem more people looking at domain names, but not more buying.
The statistics suggest more wholesale movement of domain names, and this may be a buying opportunity for some investors.
There are probably more significant changes in the types of domain names that sell, rather than the total sales volume. That may partly explain the differences between individual experiences.
It is likely that the percentage of offers that do not convert to closed sales will increase. Those who offer monthly payment plans may improve their chances.
Just as in conventional investment, it is always wise to carefully consider changing markets, but it is also important to not panic or over react.
What Do You Think?
A sincere thank you to all domain investors who shared their experiences, in some cases in significant detail. I also acknowledge the NameBio database that made this statistical analysis possible, as well as Dofo for the March 2020 sales analysis.
I also collected opinions from domain investors on what they are seeing in the market, both in terms of inquiries and closed sales. Here is a summary of what I found.
Statistical View of Recent Domain Market
I used the NameBio database to see if domain sales had dropped off during the last month, when the impact from the pandemic would be expected to be most severe. The data below refers to a last month, or last three months, period ending April 13, 2020. That is, last month refers to data from March 14 through April 13, while the three month average is based on a period from January 14 through April 13. For the three month period, I expressed the data in terms of monthly averages, so the two can be compared.
Keep in mind that NameBio data is a mix of retail and wholesale domain name sales, and that only certain sales venues report their data.
- I first looked at sales in all extensions. The past month had slightly more sales, 10,100 compared to a 9530 monthly average in the preceding three months. However, the total dollar volume in the last month was down by almost 10%.
- If we look only at
.comsales, the picture is not much different. The number of sales is up 5.5% from the recent monthly average, but the dollar sales volume is down about 5.4%. This could be interpreted either as a larger number of wholesale transactions, as some domain investors liquidated part of their portfolio in tough economic times, or that domain investors have lowered retail prices in order to try to attract sales. - One way to separate wholesale transactions from retail ones, is to look only at sales taking place at certain venues. If we include only sales from Sedo, BuyDomains, DomainMarket and Private Sales, there was a slight 1.7% decrease in retail sales numbers during the last month, and a 3.8% drop in retail dollar volume. I suspect these changes are not statistically significant. Of course, the selection of these venues does not perfectly split the retail and wholesale parts of market.
- Another option for separating retail and wholesale sales, is to look at sales within a certain price range. If I look only at
.comsales of $10,000 and up, there is very little change during the last month. There were 72 sales during the last month, compared to a recent monthly average of 78, and the dollar volume is $2.5 million compared to a recent average of $2.6 million. The difference is not significant. - If one instead considers all
.comsales of $1000 or more, the last month saw 1193 sales compared to a 1252 monthly average in the preceding three months. The dollar sales volume is about $5.1 million in the last month, compared to a recent monthly average of $5.6 million. It might be concluded that in the $1000 and up.commarket there has been a drop of about 9% in retail sales volume during the last month. Average prices edged downward as well. - We study wholesale transactions by looking at the low price end of the market. The last month saw 15.8% more sales in the $100 to $200 range compared to the monthly average. The dollar volume is also substantially up, suggesting more wholesale transactions of late.
- With a NameBio membership plan, it is possible to look at sales below $100. In the
.comextension there were about 9% more sales below $100 than the recent monthly average. In the last month alone, there were more than 26,900.comsales listed in NameBio at prices less than $100. - If instead of the last month we consider the month of March, we can use data from the Dofo monthly sales report for March 2020. That shows 21 sales (all extensions) of $50,000 and over, while in 2020 year-to-date there were 48 sales in total within that price range. This suggests no evidence yet of a drop at the top end of the market, and in fact the rate in March was above the 2020 average. It is possible that the drop-off will occur in later months, and previous economic collapses have had a delayed reflection in the domain market.
- It had seemed to me that recently BuyDomains has had more sales listed on NameBio, particularly related to health, education and remote services. Indeed, with 1119 sales from the first few months of 2020, compared to 2052 in all of 2019, BuyDomains are definitely selling more domain names. I wondered if this was because they had a portfolio well suited to recent demands. However, I think it may simply be that they have been steadily increasing their sales each year. For example, in 2018 they sold 1423 domain names.
- I would summarize what the numbers tell us in the following way.
- There is little evidence yet of a significant change in the retail domain market .
- There may be an indication of some lowering of prices.
- It seems clear that there are more wholesale transactions taking place.
- There is some evidence that the very top of the market is at least as strong as normal.
- It may well be too soon to conclude what the impact of the pandemic economic slowdown will be.
Domain Investor Perspectives
I asked the following three questions to obtain investor perspectives on what they are seeing in their own portfolios.
I share a selection of responses below, but urge you to go to the NamePros request thread to see all of the responses in full.
- Have you seen any significant changes in number of offers, sales or inquiries during the past month?
- On the sales front, have you seen changes in the types of domain names that are getting traffic or inquiries, either in terms of price level or niche?
- If you do parking, have you noted any change in parking revenue of late? (e.g. more people on Internet, has it meant more visits to parking sites and clicks).
Brandsly, who has a large portfolio of about 7000 domain names, reported that while gross sales of typically $40,000 to $50,000 per month dropped to about one-quarter of that in March, that the early part of April seems to be rebounding nicely.
Josh Reason shared the following perspective:
“I’m seeing a lot of sub $5k sales being reported in private groups.
I’ve also had more $1k-$3k sales in March than I’ve ever had before.
Higher end of the market definitely a little quieter from my perspective but I’ve still heard of a few private transactions in the 6 figures.”
NameBuyer statistics shows fewer sales compared to the same period last year, but higher revenue:
“Overall 54% less names sold, but a 174% increase in revenue. With my big sale removed, it is still an 8% increase over last year's revenue during the same period.”
Abdul Basit reports that sales are still happening, but fewer in number and concentrated at the lower end.
Karmaco reports a stronger March 2020 compared to 2019.
Garptrader shared several recent significant sales, all happening in just a few days, but also pointed out that natural volatility means that one should be cautious about interpreting anything unusual in a short time period.
Nikul Sanghvi of Hypernames, who periodically shares with NamePros readers detailed analyses of his domain sales, provided a comprehensive picture of what has happened in his portfolio lately. He reports that:
He also reported that while sales volume is similar to last year, average prices have edged downward.“Total traffic across roughly 2000 domains is up by 20% (vs January). Inquiries were slightly up for me in March.”
F33333 reports:
“Inquiries/sales about the same. More liquidation sales. Increased visitors to landing pages but no increased sales as of yet!”
A similar view was expressed by AnthonyD:
“Inquiries are up - sales flat.”
FolioTeam reports more visits but not a correspondingly higher number of sales. She writes:
“There has been about 30-50% more traffic on my names. Used to have a daily average of 30-40 visitors on 170~ names after filtering out bot traffic in Google analytics. Now, that number has shot up to 40-60 visitors daily.”
SuperBrander reported:
“March was pretty great. 25K sale, 4K sale, 3K sale and a few other smaller sales. April on the other hand has been bad for me so far. Not a lot of inquiries this month either so far. Hopefully things will pick up in the second half of the month.”
A number of people I talked to reported that a greater number of sales are now opting for monthly payment plans. For example, Pay.My.id reports about 60% of sales are on payment plans recently That makes sense in the current economic climate.
The negotiation process, and fraction of successful sales, may be seeing changes as well. Nikul Sanghvi says:
Many buyers are savvy - they are making low offers with the knowledge that asset owners might be more flexible. A bunch of deals defaulted - either during negotiations or after agreement. In every case, the other party cited something related to the current market climate.
SuperBrander also encountered a failed sale that was attributed to the pandemic:
”One buyer bailed on a 8K sale that was already in escrow (first with some coronavirus excuses asking for extra time, then he just disappeared).”
While OnlineBusiness reported a number of successful sales in March, he also added:
”That said, I had two end-user sales fall through due to the crisis. Both deals were in escrow and the buyers agreed they would fund, however eventually cited the crisis as to why they couldn't continue.”
A similar experience was reported by Brandsly who wrote:
She went on to say, though, that we may see a quick return to near normal as people adjust.“It is clear that the pandemic has affected sales last month, to a pretty severe extent in my case. At least 3-4 sales fell through after agreements.”
“I believed there was a shock factor in play, and I was hoping that the market will bounce back gradually if not a V shape recovery - when people get more or less used to the situation.”
Among the areas that seem strong of late, Pay.My.id indicates “health, security and financial” are popular, with others have added education, delivery, digital and remote services. Some suggest that travel and entertainment domains are a tougher sell than usual right now.
I asked about parking, but only a few respondents commented on that. Pablohc86 suggests recent volatility, but overall not much different from the past.
Length did not allow me to fully quote all who responded, so head over to this NamePros discussion thread to read additional reflections on what is happening in the market during the pandemic.
I would like to end with this sensible and optimistic view expressed by OnlineBusiness:
“So while I can see businesses being apprehensive about buying domains, I still think we domain investors will continue to see sales in the coming months.”.
Final Thoughts
While I think there are hints of a changing market, I don’t think that there is clear statistical proof yet.
The entire market is probably down only slightly.
Not surprisingly, with many people at home and on the Internet, there seem more people looking at domain names, but not more buying.
The statistics suggest more wholesale movement of domain names, and this may be a buying opportunity for some investors.
There are probably more significant changes in the types of domain names that sell, rather than the total sales volume. That may partly explain the differences between individual experiences.
It is likely that the percentage of offers that do not convert to closed sales will increase. Those who offer monthly payment plans may improve their chances.
Just as in conventional investment, it is always wise to carefully consider changing markets, but it is also important to not panic or over react.
What Do You Think?
- Are you seeing recent changes in offers or sales, the types of names getting interest, or parking revenue?
- More generally, how do you see the domain market changing in the months ahead?
- Have you altered your personal domain investment activity during the pandemic?
- Have you done any price adjustments?
A sincere thank you to all domain investors who shared their experiences, in some cases in significant detail. I also acknowledge the NameBio database that made this statistical analysis possible, as well as Dofo for the March 2020 sales analysis.
