discuss 3+ yrs in domaining. No 4-figures

[abstractdomainer]

I have been a part of the domaining industry for quite some time now. And this is something strange when I look at many people making a terrific amount of sales and it has been 3 years and I haven't made a four-figure sale.

While there have been tonnes of low three-figure sales and that has been my focus, there have been exactly 0 sales in the four-figures as much as I recall. I need your help in diagnosis if you will. There could be three reasons for this, I believe:

1) I do not own the right names that sell for 4-figures - So, my strategy has always been to take up some names (like 20-30), which would sell for low to mid $$$ and close them, as much as possible.

2) I do not price the names right - I dip my feet deep into .CO as well, but major sales were in mid-3-figures only, with the platform taking a chunk of it and I remained with whatever was left, in bits-and-pieces.

3) I never renew my domains (not even 1) - A third thing that I believe is going wrong with me, is not renewing the domain for another year, looking at the trade-offs. I look at domaining in a short-term perspective maybe, which is why four-figures are not coming my way. I usually think of it this way:

-- You renew a domain for say $15 which may not sell for another year or the year after that, whereas in promos, you may end up getting 7 domains for the same cost. The chances of selling 1 out of these 7 is still high for me, since the risk is diversified. And hence, it makes sense to diversify the risk

-- Another thought process I have, when I see a domainer invest $2k for a single domain name, is that how can someone be so sure that it is a good investment??

I have two questions:

1) Help me diagnose the problem in my thought process and investment strategy so that I get in that four-figure league ( I make good money from domaining but never good sales)
2) Help me understand, what gives people confidence to renew a domain or acquire something for a $2k price?

 

[bmugford]

It is likely a combination of all those things.

1.) You won't get any 4 figure sales unless you ask 4 figure prices.

2.) You won't get consistent 4 figure sales unless you have domains that appeal to end users.

3.) By not renewing any domain you are getting rid of the time value. Even great domains can take many years to find the right buyer.

Other things that could effect this are -

• Asking prices.
• Negotiation skills.
• The extension. It is always going to be easier to sell quality .COM.
  
• Is the domain listed on popular venues? Is it easy for the potential buyer to find?
• Does the domain have a large enough pool of potential buyers?

To me the fundamental business model is likely flawed. Just taking low quality, low price domains because they are available and not renewing any has limited upside.

There are not a lot of good domains available to hand register in 2020, especially in .COM with 140M+ registered.

I generally only buy domains I am willing to renew since time value is a major part in the equation. Still, then you need to cover the expenses of all the domains that don't sell in a given year as well.

With an average sell through rate of around 1-2% you need both quality and quantity to make steady passive sales in a higher price range.

I would re-invest some of your sales into higher quality domains on the aftermarket. Then you are likely to see better results.

Brad

 

[DomainGist]

I have been a part of the domaining industry for quite some time now. And this is something strange when I look at many people making a terrific amount of sales and it has been 3 years and I haven't made a four-figure sale.

While there have been tonnes of low three-figure sales and that has been my focus, there have been exactly 0 sales in the four-figures as much as I recall. I need your help in diagnosis if you will. There could be three reasons for this, I believe:

1) I do not own the right names that sell for 4-figures - So, my strategy has always been to take up some names (like 20-30), which would sell for low to mid $$$ and close them, as much as possible.

2) I do not price the names right - I dip my feet deep into .CO as well, but major sales were in mid-3-figures only, with the platform taking a chunk of it and I remained with whatever was left, in bits-and-pieces.

3) I never renew my domains (not even 1) - A third thing that I believe is going wrong with me, is not renewing the domain for another year, looking at the trade-offs. I look at domaining in a short-term perspective maybe, which is why four-figures are not coming my way. I usually think of it this way:

-- You renew a domain for say $15 which may not sell for another year or the year after that, whereas in promos, you may end up getting 7 domains for the same cost. The chances of selling 1 out of these 7 is still high for me, since the risk is diversified. And hence, it makes sense to diversify the risk

-- Another thought process I have, when I see a domainer invest $2k for a single domain name, is that how can someone be so sure that it is a good investment??

I have two questions:

1) Help me diagnose the problem in my thought process and investment strategy so that I get in that four-figure league ( I make good money from domaining but never good sales)
2) Help me understand, what gives people confidence to renew a domain or acquire something for a $2k price?

How many domains do you own?

I've never owned more than 100 domains at the same time, this means my renewal bill is under £1000 a year.

I've made a four figure sale every year for 10 years apart from 1 year.

Do you go for quantity over quality perhaps? I see lots of people on here building a portfolio of 500+ hand regs, and if they were more patient and put serious work in they could have built a portfolio of 100 good domains on the aftermarket over say 18 months and then had a portfolio they can afford to keep.

Pile them high sell them cheap is not a great strategy when two renewals destroys all profit.

Carefully building a small portfolio of commercially attractive domains makes more sense.

When registering ask this question....

"Who would buy this domain?".

If you can't identify 3 very obvious end users for a domain then don't acquire it. Or at least 1 that you are very confident will want to buy.

One flaw with hand regging is that if there was an obvious immediate buyer, wouldn't they have registered it? When buying expiring domains you could be picking something up which hasn't been available for registration for 10, 15, 20 years. You find domains where there has been a buyer coveting it for years! A good example below...

I bought LondonClock.com for about $30 a couple of years ago, because there was a business called London Clock with £5m in the bank (accounts are public in the UK). They were using LondonClock1988.com or something like that. It was previously used by a different business in the USA, it was 20 years old when it dropped..

It was obvious they were going to try and buy the domain for me, sold for $3000 within a few months.

Just blindly registered domains is just gambling, and gamblers don't very often make a profit. I'm not saying that you are one of those people, although you may be?

Its really hard work finding good domains at low prices on the aftermarket, and there's a lot of competition, it requires a lot of knowledge and skill, a hell of a lot of research... but that's domaining. I've bid for about 90 domains over the past 2 weeks, I've only won 4 of them, the rest went above my budget and I'm trying to be a value investor... I'll renew the 4 I won until a buyer comes, because I'm confident in the quality, that's the level of hard work and patience required.

Hand regging speculatively isn't really domaining, its gambling.

Better off acquiring 2 good domains per month for $30-$100 a piece from the aftermarket and slowly building a quality portfolio over a few years than any number of speculative hand regs.

 

[Brian L.]

3) I never renew my domains (not even 1) - A third thing that I believe is going wrong with me, is not renewing the domain for another year, looking at the trade-offs. I look at domaining in a short-term perspective maybe, which is why four-figures are not coming my way. I usually think of it this way:

The majority of my four-figure and all my five-figure sales have been domains I’ve owned longer than a year.

 

[FolioTeam]

You are giving your domains performance anxiety.

You are basically telling them, "You better sell under a year or...."

No wonder the poor dudes are too scared to perform.

But on a more serious note, good domains sell. Sometimes, that takes time. I know that some domainers approach domaining with a quick-flip-only mentality.

But the thing with domaining is that you are more likely to burn out easily going the quick-flip way. Regging good names gets harder as more people get into the space.

So, when you drop a decent name today simply because it didn't sell within your stipulated time of 1 year, finding a name of similar quality to reg next year is usually harder.

Same point if you acquire your names from auctions, resellers et al. Acquisition cost has steadily gone up over the years.

Get good names, believe in them, price them right and let time do the rest.

 

[Bob Hawkes]

What an outstanding and comprehensive answer to an important query just given above by @bmugford.

I feel much of the pull that the OP expressed in his model (although I definitely do renew some domains, so not as extreme). That said, I see the logic in Brad's approach. And he has the record of success to prove it.

I like all of the factors that he lists as important. Especially pricing, negotiation and pool of potential buyers.

The time value argument he makes is the most tricky. Part of my mind argues, if I did not get an offer this year, will I likely have a different result if I hold it another year? I think a good mechanism to get a second opinion on what to keep, and what to fold, is perhaps among the most important ways domainers can help each other.

I realize Brad favours mainly .com, where at least renewal and registration, except for discounts, are pretty similar. With new and general country code that is often not the case, where the two values are sometimes very different. My probabilistic mind argues that a model of trying many for a year might make sense for those extensions, since the cost ratio is often of order of 15 or 25 x (not always).

One approach I find useful is to divide my domain names periodically into three buckets. One bucket, that I feel really good about possible end use, aesthetics of name, sector, etc. I place in top bucket with definite plans to renew and often do that well in advance. But I also force myself to choose a number I definitely plan to let expire barring a serious offer or sale, of course. The middle ones are the tough ones, of course.

Thanks again for great answer, Brad.

Bob

 

[Peak.Domains]

If you buy more expensive (valuable) names, you'll have an easier time justifying them and they'll also be more likely to fetch a higher price.

Having 30 names that cost you $10 each will continue to cost you $300 every year to maintain your portfolio. Having 1 name that you paid $300 for will cost you $10 each year to maintain.

 

[bmugford]

What an outstanding and comprehensive answer to an important query just given above by @bmugford.
I realize Brad favours mainly .com, where at least renewal and registration, except for discounts, are pretty similar. With new and general country code that is often not the case, where the two values are sometimes very different. My probabilistic mind argues that a model of trying many for a year might make sense for those extensions, since the cost ratio is often of order of 15 or 25 x (not always).

I would say .COM is around 70% of my portfolio. I do own many premium terms in secondary extensions like .NET/ORG/US and even some in .BIZ and .INFO.

I just paid mid $X,XXX for a top quality single word .ORG last month. I have nothing against other extensions, in general. But the lower quality the extension, the higher quality the term needs to be.

In my view though it is much easier to sell .COM. Any marginal .COM has the potential to sell for a few thousand to the right buyer.

I think .COM is just a natural starting point. It is the easiest to sell and most liquid.
It is like building the base.

It is going to be rare IMO if you can't do well in .COM but can do well in extensions with far less demand and liquidity.

Brad

 

[Joe N]

Yes, this is what I call a primary domain.

Could the entire business be promoted on the single domain?
Is it representative of a companies range of products/services?

This can be a keyword or brand. Some terms are more secondary and for parts of a business, not the whole business. Those will never have as high upside.

Brad

Exactly. Does it represent the core product or service of a few companies? If yes, and it's .com, then you might have something.

I'm always on the lookout for these types of names. They're my favourite kind to outbound, and you can often find decent ones on GD closeouts (occasionally even in deleted lists). I find maybe one name every second day by taking 30-45 mins to go through the lists.

Most often, I'll find names that speak to the primary offering of one or two companies, and the secondary offering of many others.

I actually just got one on closeouts yesterday that fits what I look for: Team/Shelters(.com). If you Google the term (in quotes, of course) you'll find a small number of companies that specialize, and then many others who also sell them. It's a high value item, used worldwide, and sold online. Probably still not an amazing chance of finding a buyer via outbound, but at least it's a name I can feel good about keeping.

 

[ramkumaritrvs]

Acquire right name (check namebio to know what keyword / combo is sold)

Be confident in your names and ask 4 figures + Atleast keep 3 years before drop & mainly stick to .com.

Surely you will get 4 figure sales.

Goodluck

 

[rajdomains]

Hi @abstractdomainer

I just want to share my domaining experience with you and maybe you found that useful.

I am doing domaining since 2011 and my 2nd 5 figure sale held last year (after 8 years of domaining).

At various blogs, we saw an article that a guy sold his domain for $xxxx or more which was being purchased for low $xxx but readers never think about the guy who sold the domain for 4 figures might be having 1000s of the domain which he/she renews every year.

As you stated you never renew the domain but mate I don't know any business which can be done without investment. You have to do an investment and make a strong portfolio.

When I have started domaining in 2011 then I don't have any knowledge of domaining and I belong from a small town in India where many peoples even don't know about a domain. But I was crazy for being a self-dependent.

I started registering expired domains and started selling at eBay. I have sold 8000+ domains worth $100,000. (From 2011 to 2015). I assume 95% of them are being sold to domainers. From 2016 I planned to sell domains to end users and sales decreased.

Selling domains to end-user is very hard and if you think you will keep 10 domains and you can sell 10 domains to end-user then it is very difficult.

So what I suggest you to become the successful domainer is...

1. Decide to whom you want to sell a domain - End-user or a domainer (I recommend domainer at the moment as you don't want to renew them).
2. Never overbid on a domain when buying from the auction.
3. Set a reasonable price for both end-user as well as a domainer.
4. Buy the right domain which you think you can renew if unsold.
5. Patience (Very Important).

I hope you will find the above information quite useful and really this thread is very useful for many unexperienced/experienced domainers.

Everyone can learn something for everyone...

Happy Domaining
Stay Safe!!

 

[Joe N]

I realize Brad favours mainly .com, where at least renewal and registration, except for discounts, are pretty similar. With new and general country code that is often not the case, where the two values are sometimes very different. My probabilistic mind argues that a model of trying many for a year might make sense for those extensions, since the cost ratio is often of order of 15 or 25 x (not always).

One approach I find useful is to divide my domain names periodically into three buckets. One bucket, that I feel really good about possible end use, aesthetics of name, sector, etc. I place in top bucket with definite plans to renew and often do that well in advance. But I also force myself to choose a number I definitely plan to let expire barring a serious offer or sale, of course. The middle ones are the tough ones, of course.

When it comes to any domain (and particularly ccTLDs and new gTLDs) I think your most important factor in deciding to renew is going to be existing use cases. You either want to see:

• The term being used heavily across the internet;
• The term being used as a centrepiece term by several existing businesses; and/or
• The name being used by several other existing companies as a partial or exact match to their own domain.

When your name is a .com, at least one of these factors still need to be present, just not on as large of a scale.

The only other instance where you should be willing to renew is where you're investing in future tech names, and you need several years to see if your names hold value.

 

[bmugford]

• The term being used as a centrepiece term by several existing businesses; and/or

Yes, this is what I call a primary domain.

Could the entire business be promoted on the single domain?
Is it representative of a companies range of products/services?

This can be a keyword or brand. Some terms are more secondary and for parts of a business, not the whole business. Those will never have as high upside.

Brad

 

[gtldomainer]

My shortest advice would be : Start buying only $xxx names(read great names) in auctions and aftermarket; you'll surely make $xxxx and above.

 

[Bob Hawkes]

This continues to be a really insightful discussion, one of the better recent ones on NamePros, in my opinion.

Thanks for your well thought out response to my question, how to decide what to renew, @Joe Nichols . I totally agree with these two points....

I think your most important factor in deciding to renew is going to be existing use cases.

future tech names, and you need several years to see if your names hold value

But in addition to existing (or future directions) use, there still is another factor that Is the hardest to objectively rate, and that is simply how good the name is aesthetically, spoken, written, implications, etc. A properly structured name in an important and growing sector may not have that quality and spark. It is subjective and hard. I think we need second and third opinions, but maybe from outside the domain community.

We won't get it right all the time, but being right most of the time on acquisitions, pricing and choosing what to renew are central to success.

On the original questions raised by @abstractdomainer, I guess I would add two things. If one is making money at low risk without $$$$ sales (and I know a number are), why is it that one wants $$$$ sales? There are many good answers - less time investment to make a smaller number of sales at that level, lower renewal costs as noted, respect from the domain community, etc. Maybe it makes sense, after deciding the answer, to keep a foot in both doors. Keep a number of names likely to sell for $$$ that have kept things profitable at lowish risk, but purposefully set out to build a few domain names that warrant $$$$+ price tags to diversify your domain name across both.

One way to sell a $$$$ name is probably to get some listed in the brandable marketplaces. Almost all of their sales are in that range. It may be a long wait, but with a sufficient number of names accepted there, and waiting through renewals, that $$$$ sale is likely to happen.

Best wishes and thanks to all.

Bob

 

[seank]

Great thread and insight.

What do you do when domain approaching last month or so?

What i use to do in the beginning was use eBay as a quick sell, i was doing this for my domains instead of letting them drop as i was thinking "even if i get 10usd for it that would be good" surprisingly many of a 7 day auction for 50-500usd. (0.99 no reserve set).

I never had any domain not sell there, even if some were sold for a few dollars but again i was getting rid of them for something.

I do have many domains that i have been renewing for years as i fully believe in them.

this could be pricey for .CO or other more expensive renewal TLD's.

I would focus on .COM's or Super valuable .NET's / Org's.

What i check before buying a domain:

1.Easy to Spell?
2.Easy to Pronounce?
3.Is it Brandable?
4.What Type of Website Would You See This Domain Name to Be?
5.Does it Pass The Radio Test?

Good Luck man.

 

[Josh R]

If you don't renew any of your names then you are essentially only hand-registering I assume?

Without going into too much detail, it's not surprising that you haven't sold any domains in the 4 figure range when your avg cost is $5 per name with zero renewals?

 

[Joakim]

My first real aftermarket purchase ended some months later as my first domain sale. From approx $300 to nearly $4k.

That basically set the blueprint for what I could achieve.

I would recommend getting familiar with the aftermarket as early as possible.

 

[cipcip]

13yo, no 4 figure... what can I say... I must be bad at it...
If i do not make money, I cannot afford to invest in better domains as my monthly paycheck is at around $2,000 - which is a big salary in my home country ( Romania ), but still doesn't allow you to invest that much in new domains.

 

[Rich]

Don't feel bad, been doing this almost 15 years and I never got a five figure sale yet, came close a few times. I don't really price in that region either, I'm happy selling for xxxx when I have xx-xxx in the name. Only paid xxxx on 2 domains over the years. Try to invest in that liquid name to put in a bucket like Bob said and leave them make offer or mid-high xxxx. Shoot for higher quality names over time and your sale prices will rise, it's a marathon not a sprint.

 

[bmugford]

Here's my question for those of you who advocate keeping your domains for longer than a year: Do you base your decision on bids and inquiries received, or do you keep them based on your belief that they have solid value?

Both. It just comes with experience.

Some domains are just objectively good. These type of domains usually have large pools of potential end users.

If you get inquiries that just validates the quality of the domain, though I have many domains that would sell for thousands reseller that rarely get inquiries, and many lower quality ones get several offers.

I would worry more about inquiries on a portfolio scale than a single domain. If you own many domains and are not getting many inquiries, you might be doing something wrong.

On a side note, I drop plenty of dead weight each year as well.

Brad

 

[bmugford]

@Joe Nichols and @bmugford - Roughly how long did it take you to develop a good sense of domain value?

I agree with Joe. I would say after the first 2-3 years, but it really depends how much exposure you have when it comes to various domain types.

If you are buying domains day in and day out it will come a lot faster. It will allow you to track the market and get a feel for what sells and in what range. The more quality domains you own, the more chances you will have to make sales to end users.

I generally try to target domains that have several end users now, and are likely to only have more in the future more than trendy (flavor of the day) type domains. These could be popular terms, branding words, keywords, etc.

Brad

 

[Joe N]

But in addition to existing (or future directions) use, there still is another factor that Is the hardest to objectively rate, and that is simply how good the name is aesthetically, spoken, written, implications, etc. A properly structured name in an important and growing sector may not have that quality and spark. It is subjective and hard. I think we need second and third opinions, but maybe from outside the domain community.

I personally think that evaluating names in this way is somewhat of a domainer pitfall. The value of a second opinion is extremely limited when the person giving that opinion has no financial interest in the name.

I actually think a reliance on other opinions holds us back as domainers. We should be pushing ourselves to develop the confidence to not need approval/kudos from others. We do it by studying, testing, buying, selling, and tweaking the process until we know what works for us.

There is a whole sub-culture of members on this forum who seem to spend most of their time posting newly acquired names to seek likes, and then liking the names of their peers in return. I suspect some of them are stuck in a cyclical state of delusion about their portfolio, thinking to themselves: "All these other investors like my names... Why don't they sell?" I know you're actually talking about seeking outside opinions, but it's all one in the same to me. It all just adds up to a confirmation bias situation.

Brandable sites like BB and BP have their place, but we need to be real about our expectations when we list with them. If the name sounds good, and the marketplace accepts it, then you have yourself a lottery ticket that is getting in front of more eyeballs than it was before. If you want it to be more than that, you need to see evidence of some existing real world usage via product names, campaigns, businesses, social trends, etc.

I'm not saying my own names fit these criteria... I have a bunch of names that I own just because I like the sound of them. The difference is that I'm not kidding myself about their chances of selling, and I'm confident enough in my own risk/reward judgement to keep renewing them without seeking other opinions.

 

[bmugford]

But how do you identify that a name is worth a 4-figure investment? Are you sure you would be able to sell this? And if yes, how?

Experience. I did not start out buying domains in that range. I worked my way there.

I think you really need to work on the buy quality, and being willing to renew the quality domains.
The upside on registering whatever and not renewing anything is very limited.

It also doesn't give you much experience in domain valuation.

Brad

 

[Steve Andersen]

I started my domaining journey less than 1 year ago. I did like most and hand registered a bunch of junk.. Most that I’ll put to nameliquidate as they get close to expiry.

About 90% of my domains are now .com’s. The rest are, .io .co .org. net or .xyz. I have I think 2 .tops, 1 .best and 1 .live, but these are domain hacks.

When I first started I was looking for parking revenue and I learned really quickly not really worth it, at least not on domains I had.

So I started on brandable domains. These are generally low cost, can be picked up in domain auctions and close outs fairly cheap. I now have about 615 on BrandBucket and 55 on SH. Since my quest started I have had 3 end user sales $1575, $4155, & $10075. These are all before commissions. I could have had a couple more but turned down offers, and I had a buyer on another on Dan not follow through on another. These do sell, but they are slow. People that are extremely successful in theses spaces build very large portfolios, that over time pay off. But this is not a get rich quick approach. If your average acquisition cost is $20-$25. Per domain, a 1000 domain portfolio will set you back $20-$25K to get there. But once there it would not be unreasonable to sell 10-20 a year with a 1000 domain portfolio. Many guys side hustle small domain sales like your doing to fund building these branding portfolios. Once listed in a market place your domain pretty much has a liquid value of 1% if recommend listing price if you want to sell out to another domainer on the market place.

So with this type of sales you will have high commissions and renewal costs. Holding 1000 domains will cost around $8500 per year in renewals, If you net 2K after commissions on an average sale you could expect to make. $11,300 - $31,100 a year after renewals, commissions, and restocking sold domains. Scale up another 1000 domains and you can expect it to double accordingly. Again higher quality names will have higher sales prices.

Getting 1000 domains on a brandable market place is not easy. They typically only approve 10% of those submitted, over time as you get better with submissions you may get 25-40% approved. So what do you do with the ones that don’t make it. If you liked them enough to get in the first place hold them and put on aftermarket market places. My first sale was rejected by both BrandBucket and SquadHelp. So they will still sell, but you will do far better selling them if they are priced. The sweet spot for these are generally $2000-$3000.

But as my journey in domaining is progressing I find myself buying much more expensive names. I believe these have multiple benefits but will let others chime in. Closeouts are pretty much left overs that most domain investors did not want. You can find winners in there, but they were ones many other domaines passed on. So these are harder to unload and recoup your costs if you need to liquidate. Higher end Generic, Exact Match, or 4L. Have great rates of returns, and are much easier to liquidate if need be and recuperate 80% or more of your costs if not still make a profit. But if you own $20K in these with average cost of $500 your holding cost is only about $340 a year vs $8500 for a 1000 domain portfolio.

So for me I am slowly building my portfolio with better names non brandables but will also slowly build my brandables.