Domainers only sell ~1-2% of domains on average a year simply because of the relatively fixed number of new businesses looking for domains each year versus the number of domains being held by domainers.
It's pretty straighforward math despite not knowing the precise numbers
Basically there are 330 million domains in existance.
Of which there are XX million held by domainers.
Then there are +XX million new businesses/products requiring domains each year
Also factoring in -XX million businesses/products folding and letting their domains expire
Giving a net of +X million domains required per year
Most of those X millions will be hand registrations.
While leaves maybe 500,000 end-user aftermarket sales ($x,xxx+)?
(complete guess, I honestly don't know .. i'm simply putting numbers for the sake of showing the formula)
If all domainers and aftermarket marketplaces combined hold 25 million domains, then that would be 2%.
My numbers are likely way off as I'm completely guesstimating to get to 2% .. but it gives you an idea of the overall formula. The fact is that 2% number could be off by a significant number.
While the X's are not precisely known, the overall numbers are relatively stable with obvious growth year over year as the world continues to get online.
Most definitely ICANN and Verisign could be doing things to bring more awareness and accessibility to stimulate growth. But at the end of the day we're talking a difference of max 5%. Definitely significant .. but negligible on the 2%/98% scale, as even a strong global domain marketing campaign that impacts the market a massive 5% would increase the 2% to 2.1% ... and that 2% is a complete guesstimate. The factor of error between 1%-2% is 100%, which totally overshadows the 5% in question. And frankly that "2%" could be even far less than 1% giving an even bigger margin of error.
But whether Verisign or anyone else call us cybersquatters or hoarders has zero relevance on the global demand for domains.
Even then the number of domains sold has nothing to do with profit or success. Some domainers sell domains at 100x, others at 10x, some at 2x, and some often sell at a loss. Then those sales need to be countered by costs (renewals/acquisitions). Which is why this whole discussion really doesn't change much for individuals.
@ThatDomainGuy is talking like ~98% of domains not getting sold each year is something negative ... when in fact it's completely natural. It's simply a market fact. It has extremely little to do with anything internal within the domain industry, and is simply a result of the progression of the global economy getting on the Internet.
It's actually a complete lack of understanding of where the demand for domains comes from that would make anyone think the number of domains purchased each year could really be influenced by something so insignificant as the domain industry compared to the driving engine of the $80 TRILLION global economy.
Bottom line is:
1- Domainers ironically have virtually zero influence on the actual demand for domains.
2- But all that is completely irrelevant and meaningless because each domainer has their own system and unique portfolios. So whether their overall relative sell-through of their portfolio is 1%, 2%, 5% or 10+% it really does matter at all. What does matter, is that whatever their number, that it works with their acquisition/costs vs revenue model.
A personally appropriate sell-through percentage can vary wildly based on average acquisition price vs average sales price. If you buy very low and sell at 100x, then you don't ever need anything close to 2% to be profitable. But if you sell at 5x then you need significantly higher than 2% annual sell-through to even start to make a profit.
Whatever the magic number (let's assume 2%), whether the remaining 98% are amazing or "deplorable" really doesn't come into play.
However where
@ThatDomainGuy's original statement shows to be decisively wrong, is that I think it's fairly safe to say that many domains found within the 98% in previous years most certainly do sell in future years. It's not like domainers sell 2%, then the next year only sell a newly acquired 2%, while the same 98% continue to never sell year after year.
Fact is most of the domains that exist are horrible. Be they in use by end-users or held by domainers. There is no major alarming excess of "deplorable domains" held by domainers vs the deplorable domains hand registered by new end-users.
And that's my 2 cents on the ~2%!