So here's some admittedly overly simplistic math on that...
Let's say I pay $15 per name I submit to BB, representing a mix of GD Expiring and hand-reg purchases.
And then let's assume I have a 40% acceptance rate.
I buy 250 names for a total of $3,750 and submit them.
40%, or 100 of them, are accepted.
Now I've got to pay $10 per accept to get them published.
So my total costs end up being $4,750. It costs me $47.50 to get one published name
I've got a 9.3% sell-through rate, and a 100-name portfolio, so I end up selling 9.3 names over the year.
Let's assume $1,000
in pocket per sale.
Sales: $9,300
Cost: $4,750
Pre-tax profit: $4,550
Pre-tax return on capital: 96%
That is a healthy return.
But there are many risks and the chief one I worry about is BB changing its business model somehow in a way that negatively effects sellers. So a higher potential return is warranted. We are not talking about US Government bonds here.
But what if I had a 3.5% sell-through rate? which many have speculated is more in line with the overall average. Well, I've lost ($1,250) in that case.
Maybe Year 2 will save me. I renew my 100 names for a total additional cost of only $800. If I sell 2% of my portfolio in Year 2, I've finally broken even. If I sell 3.5% again, I break even six months into Year 2. But breaking even after a year-and-a-half or more is not really a domainer's dream. Maybe it should be, though -- if one has a viable business model.
Anyway, an interesting thing is that if you can figure out how much it costs you to get one name published (including listing fee and cost of rejects), in the above hypothetical case it was $47.50, then if you just move the decimal point one place to the left, 4.75%, you can see at what sell-through rate you break-even after a year.
But ultimately, there is only one way to make money on BB that I can see, and that is in submitting names that have a decent shot to sell for $X,XXX+, which you purchased at a fair or even cheap price. Everything else is out of your hands.
And then, if that works, throw more money and brains into the effort to magnify effect