discuss $28,888 vs $499

[katerleonid]

Just saw this case on X.
Ryan owns 7,500 domain names.

In the first month, he priced them all at $28,888 - and got 1 sale.
In the second month, he priced them all at $2,499 - and got 5 sales.
In the third month, he priced them all at $499 - and got 45 sales.

I don’t have a clear conclusion here.
Let’s say you have 7,500 domains, what would you do?
Would you experiment, keep the $28,888 pricing for a year and hope for more sales?
Or would you lower the prices to $499 and just focus on volume to cover renewals?

How many domains do you have?

 

[alcy]

a few days ago i put mid 5fig bin on all 700 names.

let's see how it goes.

most here will never price all their names for 500.

find sweet spot

or just spend hours put a bin one by one

which is best.

and longest.

 

[alop]

Ya very not happy buyer very unsatisfied
now you got us calculating a forecast get outta here

 

[katerleonid]

Yes, I do believe the sweet spot works best. But how do we calculate that? Is it a formula, or is it specific to each domainer’s portfolio? Or could there be a general formula that automatically applies to most portfolios?

 

[johnn]

If he prices them $1 each then everything will be sold.

 

[Bravo Mod Team]

In the first month, he priced them all at $28,888 - and got 1 sale.
In the second month, he priced them all at $2,499 - and got 5 sales.
In the third month, he priced them all at $499 - and got 45 sales.

The totals are important here:

1. $28,888 in sales. Lost 1 domain from inventory.
2. $12,495 in sales. Lost 5 domains from inventory.
3. $22,455 in sales. Lost 45 domains from inventory.

In all cases, #1 is superior.

 

[katerleonid]

I agree, totals are very important here, that’s why I didn’t include them in the initial post. I wanted to spark curiosity, because it’s actually interesting: when you see 45, you automatically assume the total will be larger, but it’s not.

 

[Future Sensors]

In all cases, #1 is superior.

It really depends on the quality of the individual domains.

 

[bmugford]

The totals are important here:

1. $28,888 in sales. Lost 1 domain from inventory.
2. $12,495 in sales. Lost 5 domains from inventory.
3. $22,455 in sales. Lost 45 domains from inventory.

In all cases, #1 is superior.

But, if that one sale didn't happen then the revenue from the first model is $0.

That is a lot relying on that one specific sale happening.

If that one sale doesn't happen, you have $0 in income and probably $7,000+ in renewal fees that month.

Brad

 

[Bravo Mod Team]

It really depends on the quality of the individual domains.

It depends on your strategy/goals, too.

All things equal, you can just follow the numbers if you're trying to maximize revenue today.

If you want to maximize revenue in a 5-year or 10-year window, then individual pricing based on quality becomes important.

 

[katerleonid]

Brad, I agree with you. You really hit the jackpot here.

If that one big sale hadn’t happened (which is quite possible in other months), those 45 smaller sales would still have occurred, or at least a good portion of them.

It’s almost impossible for some of those 45 sales not to happen. Let’s say 20 didn’t go through, but definitely not all.

 

[bmugford]

Brad, I agree with you. You really hit the jackpot here.

If that one big sale hadn’t happened (which is quite possible in other months), those 45 smaller sales would still have occurred, or at least a good portion of them.

It’s almost impossible for some of those 45 sales not to happen. Let’s say 20 didn’t go through, but definitely not all.

You also have to factor in the quality of domains sold.

If you are selling (45) good domains for $499 each, that is a pretty bad business model. Sooner or later all your sellable domains will be gone.

If you are selling (45) lower quality domains which are easily replaceable, that all of a sudden becomes a great business model.

Brad

 

[katerleonid]

I do agree with the quality of the domains sold.

Those 45 domains that sold for $499 could be strong or even premium names that buyers had been tracking for months or years, and they finally saw them at a much lower price and grabbed them.

There are many variables at play here. Personally, I wouldn’t price premium domains too low, but as an experiment, I think it’s interesting.

 

[URL Stream]

The totals are important here:

1. $28,888 in sales. Lost 1 domain from inventory.
2. $12,495 in sales. Lost 5 domains from inventory.
3. $22,455 in sales. Lost 45 domains from inventory.

In all cases, #1 is superior.

STR for 7,500 names (per month):

Month 1
Price per domain: $28,888
Sales: 1
STR: 0.013%

Month 2
Price per domain: $2,499
Sales: 5
STR: 0.067%

Month 3
Price per domain: $499
Sales: 45
STR: 0.6%

Source ChatGPT

 

[URL Stream]

STR for 7,500 names (per month):

Month 1
Price per domain: $28,888
Sales: 1
STR: 0.013%

Month 2
Price per domain: $2,499
Sales: 5
STR: 0.067%

Month 3
Price per domain: $499
Sales: 45
STR: 0.6%

Source ChatGPT

Annualized STR for 7,500 domains (based on monthly rates):

Month 1 price: $28,888
Monthly STR: 0.013%
Annualized STR: 0.16%

Month 2 price: $2,499
Monthly STR: 0.067%
Annualized STR: 0.80%

Month 3 price: $499
Monthly STR: 0.6%
Annualized STR: 7.2%

Source ChatGPT

 

[bmugford]

Totals of STR for 7,500 names (per month):

Month 1
Price per domain: $28,888
Sales: 1
STR: 0.013%

Month 2
Price per domain: $2,499
Sales: 5
STR: 0.067%

Month 3
Price per domain: $499
Sales: 45
STR: 0.6%

Source ChatGPT

If you extrapolate over a year.

$28,888 / 12 total sales = 0.16% STR
$2,499 / 60 total sales = 0.8% STR
$499 / 540 total sales = 7.2% STR

Brad

 

[bmugford]

Without knowing the quality of domains, or what specific domains sold, it is hard to tell much from the experiment.

The STR gap between $2499 and $499 is massive. It shows one might be slightly too high, while the other is way too low.

Somewhere between those numbers, probably around $1000 - $1500 would likely yield even higher total sales.

Brad

 

[Bravo Mod Team]

Without knowing the quality of domains, or what specific domains sold, it is hard to tell much from the experiment.

https://twitter.com/x/status/1929943680950907137

It's @RyanEwen; he has tens of thousands of domains, so for the purposes of this experiment, we can safely assume that he selected them all to be around the same quality and did not include any of his super premium domains in the experiment.

For example, he has two-letter .com domains. He would never price those at these three prices.

 

[Ostrados]

Yes, I do believe the sweet spot works best. But how do we calculate that? Is it a formula, or is it specific to each domainer’s portfolio? Or could there be a general formula that automatically applies to most portfolios?

This is what I was trying to calculate for long time without success: finding optimal price that maximizes revenue.

I made a research on this topic before:
https://www.namepros.com/threads/domain-optimal-pricing-research-np-survey.1292660

It seems the relation between STR and Price is square inverse relation. STR falls sharply the higher the price. We need to find optimal price that maximizes ROI, and for that we have to find a reliable relationship between STR and Price.

There is a very interesting experiment done by @robosapien he tested various pricing points for 4L.com domains on long period. The experiment is still running we need to wait to see final conclusion but you can check the data yourself:
https://www.namepros.com/threads/exploring-optimal-prices-for-4l-com-domains.1336296/

On your original question, I think option #1 is risky, there is inherent inconsistency in domain selling, thus you need good quantity of sales to be safe.

I believe the best way to maximize ROI on porfolio level is to treat each domain separately and find it's optimal price. Bulk pricing is very bad idea because it will results in many underpriced and overpriced domains which will reduce overall ROI.

 

[katerleonid]

@Ostrados I’ll take a look at those experiments, very interesting.

Unrelated, but somewhat connected to the topic: when I was running my book business, I used to sell Christmas books every year during the holiday season , usually for about a month.

In the first few years, I found an optimal price point that brought in great sales, even better than I had predicted. I was happy.

One year, I made a big mistake - I raised the prices by 20%, expecting higher revenue. Instead, I ended up with fewer sales and lower revenue (as expected somehow).

The lesson I learned was simple: I should have kept the original price. That would have brought in more total revenue and more customers overall.

Conclusion: finding and keeping the optimal price point is crucial, in any field.