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?

 

[King]

What Brad said, you have to ask for 4 figures & 1-year holding is too short. What if 1 month later someone was looking for that name & may even pay 5 figures for it?

 

[Bob Hawkes]

Thanks for your well-reasoned reply, @Joe Nichols . I tend to, partially, agree with what you say about validation from others in domain community, especially opinions given without explicit analysis or reasoning. Note, however, the part I bolded below.

from outside the domain community

I know you did pick up on that point, but I don't agree that it is the same.

I recently read a book by naming expert, and Canadian! , Jeremy Miller (watch for a full review, soon). One thing that really stood out to me in his advice to companies doing a rebranding, is to simply present shortlist names to people without necessarily expertise in naming: staff, and ideally customers and clients, to see reactions and memorability (has phase two where they are asked to recall it a day later, not realizing they will be asked to recall).

I think this is something almost any of us can do, few of us do do, and can provide insights. Branding and marketing agencies of course do it all the time, and more extensively. But I was surprised, just presenting 4 names I was considering, asking family, friends and people I associate with what they think, or rate them from best to worst, or what the names remind them of, what services it could be used with, or what emotions they feel. Almost always I learn something I had not considered. I think some way to more easily do it on a larger scale could be really valuable.

I perhaps did not explain my point clearly. I was not saying that an aesthetically great name replaces the first importance of primary end user. But you can have a name that is well suited to an important business, and it may still never sell. Not so much because it is bad in some way, and not at all because there are not numerous potential users who could benefit from it, but just because it does not have that additional 'greatness' that is so elusive, and subjective.

Re brandable, I am just looking at it from outside, but when I looked at the sell-through rate statistics at one of the major venues, their average prices, their commissions, it seemed the odds are favourable if you can get a number of names accepted. I know some stay away from brandable places because of exclusivity and commissions, but just saying if the goal is to get a $$$$ sale, and if, like me, a domainer felt challenged with personal negotiation skills, it is one route that eventually is likely to lead to a sale in that price range. Not that brandables are easy. I agree with your point that you still need to think first about potential use when selecting what names to submit to them.

Thanks again for your well reasoned arguments, Joe. Indeed a common sense consultant.

Bob

 

[Joe N]

What kind of investment are we looking at here? Like is it a mid XXX or low XXX or what?

If it's a GD closeout domain then it's maximum $11 plus registration fee, so about $20 total.

It takes time and patience to find them, but they're there.

 

[Joe N]

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?

It's a bit of both for me. I like to think I'm pretty discerning about my choices, but I still buy the odd name and then wonder why I did after a couple months.

Conversely, there are names I would drop if I didn't see good existing use cases for them.

 

[Joe N]

Thanks for your well-reasoned reply, @Joe Nichols . I tend to, partially, agree with what you say about validation from others in domain community, especially opinions given without explicit analysis or reasoning. Note, however, the part I bolded below. I know you did pick up on that point, but I don't agree that it is the same.

I recently read a book by naming expert, and Canadian! , Jeremy Miller (watch for a full review, soon). One thing that really stood out to me in his advice to companies doing a rebranding, is to simply present shortlist names to people without necessarily expertise in naming: staff, and ideally customers and clients, to see reactions and memorability (has phase two where they are asked to recall it a day later, not realizing they will be asked to recall).

I think this is something almost any of us can do, few of us do do, and can provide insights. Branding and marketing agencies of course do it all the time, and more extensively. But I was surprised, just presenting 4 names I was considering, asking family, friends and people I associate with what they think, or rate them from best to worst, or what the names remind them of, what services it could be used with, or what emotions they feel. Almost always I learn something I had not considered. I think some way to more easily do it on a larger scale could be really valuable.

I perhaps did not explain my point clearly. I was not saying that an aesthetically great name replaces the first importance of primary end user. But you can have a name that is well suited to an important business, and it may still never sell. Not so much because it is bad in some way, and not at all because there are not numerous potential users who could benefit from it, but just because it does not have that additional 'greatness' that is so elusive, and subjective.

Re brandable, I am just looking at it from outside, but when I looked at the sell-through rate statistics at one of the major venues, their average prices, their commissions, it seemed the odds are favourable if you can get a number of names accepted. I know some stay away from brandable places because of exclusivity and commissions, but just saying if the goal is to get a $$$$ sale, and if, like me, a domainer felt challenged with personal negotiation skills, it is one route that eventually is likely to lead to a sale in that price range. Not that brandables are easy. I agree with your point that you still need to think first about potential use when selecting what names to submit to them.

Thanks again for your well reasoned arguments, Joe. Indeed a common sense consultant.

Bob

I see what you're saying. I actually do agree with the approach when seeking to test a new company or product name. I just don't think we should be applying the same process to deciding which names are worth keeping.

Volume is definitely the name of the game at those brandable marketplaces. It's just important to note that volume alone isn't enough to excel. Quality of name and popularity of the niche are driving factors in making sales. I would wager that pure volume of lower tier names on those sites would barely be enough to help an investor break even regularly.

 

[boker]

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?

This is my experience. I'm having lot's of xxx sales, but also some low xxxx as well, so my experience is a little bit different. The main thing is that you need to check, as others have pointed, if you are making enough profit at th end of the year from all your portofolio and not just individual sales. For example, I have never made less than xxxxx profit a year for the last 4 years, but I'm not selling for high numbers, I'm selling lower than the market, but with a higher STR and lot's of sales. I know others who are acquiring lot's of domains from the aftermarket, for high amounts, but some of them are still in the red or are just breaking even year by year. Depending on your strategy, you could make hundreds of xxx sales and make more money than somebody making a few xxxx or even some xxxxx sales. If you check the forum, you will meet domainers acquiring domains for like 1k and selling it for 5k-8k-15k. They are making high sales but also paying high prices for acquiring them. As the idea to check the value of your domains through others, it will be hard to find the perfect answer. There was a domainer couple of years ago, talking about one of his domains, that one time he needed money and tried to sell it for $500, but nobody wanted to buy it. Eventually, he borrowed or something and has switched the price of the domain from 'buy now' $500 to make offer and couple of weeks later it sold for 18k. That it's not happening often, but just the idea that is happening....means that nobody tell you the perfect price, for some companies could be worthless, for others could be gold. I can tell you one of my strategies for renewing: try to use multiple way to check all your domains value: views, inquiries, others people opinion, your feeling, social media testing and so on and at the end of the year renew the best 20% of your portofolio, drop the worst 20% of your portofolio and what's left, decide on an individual basis, based on your own profit in that particular year, if you renew and how many of the other one's. By doing this, after a few years of dropping at least 20% and keeping at least 20%, you will reach a point where your portofolio will be valuable enough so that you will struggle to drop even the worst 20%

 

[WatchDogue]

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

You have two possible problems as I analyze your post:

1 - You might be thinking too " short term " whereas many domain names for the most part are held for a longer term or at least a longer term than 1 year to get in the four+ figure range;

2 - You may have an investment ceiling or cash flow matter that requires you to " move on " too quickly from what might be (?) 4 figure worthy names to keep as you described the cash for new and more names.

Four figure sales often take time and have negotiations that move with the speed of a glacier and. who knows just how long a potential buyer looked at and considered a name prior to inquiring or opening a negotiation.

You might measure your success / failure in domains by your ROI - If you are achieving a nice, sustainable ROI within the year then stick with it as the core of your approach to domain sales, after all, profit is profit including turning several 5-10 dollar domain name purchases into several couple hundred dollar domain name sales or so within a year.

I've held onto and renewed names I believe in forever - even sold a name held for and renewed for 16+ years for a net four fig ( finally! ) profit.

IF you want potential returns higher than hundreds of dollars in all likelihood you may have to consider investing more dollars, AKA risking more dollars, in domains than you are currently doing

 

[VaibhavA]

I havent read the whole thread but from whatever I have read, yes @Bob Hawkes stated it right.

It is a gr8 thread and plenty of very useful information that every domainer must read.

The best part about you is being open to something most people would feel ashamed of.

Another good thing is that you are still into it and want to improve.

I could relate to a thing that you did and continue to do after 3 years, thats not renewing a domain. I did exactly the same in my 1st year in domaining. I sold 99% of my domains out of a couple of hundred in my first year of domaining. Whether it be for a dollar or even less on namepros.

This gave me confidence and experience regarding what people are looking for. This even gave me confidence and money to start holding domains and go for domains expiring on platforms like godaddy, namejet and dropcatch.

An aged domain thats dropping may loose its age, but its still aged.

Hope you learn from gr8 suggestions by fellow domainers, theres plenty of gr8 advice on this thread.

Dont worry about xxxx sales, they will follow.

 

[abstractdomainer]

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

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?

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.

What kind of investment are we looking at here? Like is it a mid XXX or low XXX or what?

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.

Pretty valuable advice!

 

[Joe N]

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

I'd trust Brad's sense a lot more than mine!

I have a pretty good feel for what can sell for four figures, and I'm getting a bit of a feel for five figure names. I would say it's after three years thatI started feeling pretty confident. Probably would have happened more quickly if I had put more time in.

 

[BrandPlease]

Honestly, I have had most of my 4 fig sales come from GD closeout finds. - the time it takes to search ( and have my own method.which sure all have one of their own), it well worth it. The time to negotiate for a name (now I don't want to say of = quality necessarily) I can can sell with in a 20% (up or down) spread is far more costly. Again, just my opinion and hope the info is helpful.

one more thought, until you feel comfortable valuing, try to find names 7 or less letters, that are real (in all senses of real - random is always random a 3 ltr word then 4 letters of nonsense is junk - even when short), & stick with com. GL

 

[DomainGist]

If it's a GD closeout domain then it's maximum $11 plus registration fee, so about $20 total.

It takes time and patience to find them, but they're there.

Its becoming increasingly difficult to find good domains on closeouts, the expired auctions seem to very lively at the moment so I assume most are not reaching closeouts.

I did snag a really good one the other day though, looking forward to it hitting my account.

 

[otismo]

I have owned domains for almost twenty years and have had only two sales.

I consider myself a hobbyist and an end-user/developer.

I am trying to begin to think like a domainer.

This thread has been very useful.

Thank You All Very Much !

P.S. cheap strategy - save your pennies and wait for the next NameCheap One Cent Sale !

 

[bmugford]

Hi @abstractdomainer
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.

I agree. I have said the same thing over and over. You have to account for all the domains you don't sell in a year, not just the ones you do sell.

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.

Yep. Some of this just comes down to unrealistic expectations. Is it reasonable to be able to expect 4 figure sales on $5-$10 domains that were available in 2020 with 140M+ other .Com registered, while never renewing a domain? Not really.

Brad

 

[J Sokol]

Thank you for starting this thread @abstractdomainer - I know a lot of us struggle with the same problem.

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?

 

[Joe N]

which aftermarket ?

Do you mean which marketplace?

It doesn't really matter to me. I generally try to price my names with a BIN based on what I feel is the best use case (or the ideal end user) and am usually willing to negotiate down a bit.

 

[BBQ Names]

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.

So true. I always assume I will renew a domain forever until it sells, unless something makes me change my mind on that particular name, or current cash flow forces my hand, ad I drop some. My highest dollar sales may have had few inquiries. Keep paying attention - so much of domaining is having a feel for what’s valuable. As much “art” as it is “science“.

For example, I have never made less than xxxxx profit a year for the last 4 years, but I'm not selling for high numbers, I'm selling lower than the market, but with a higher STR and lot's of sales. I know others who are acquiring lot's of domains from the aftermarket, for high amounts, but some of them are still in the red or are just breaking even year by year. Depending on your strategy, you could make hundreds of xxx sales and make more money than somebody making a few xxxx or even some xxxxx sales.

I should lean more towards Boker’s strategy. While every year is profitable for me in domains, I am often reluctant to sell for lower prices that might actually increase my year-end profit. Nothing wrong with three figure sales if it puts food on the table, and a roof over your head.

one of my strategies for renewing: try to use multiple way to check all your domains value: views, inquiries, others people opinion, your feeling, social media testing and so on and at the end of the year renew the best 20% of your portofolio,

Absolutely multiple where is the angles of validation is so key - also check for other permutations of the names registered or being used. ie: if you own buygrapejuice.com and multiple other companies have names like buysupergrapejuicetoday.net or buygreatgrapejuice.com, by all means keep renewing the name plus do some outbound marketing!

Let me give it a try after having developed an eye

And THAT is a key - developing your own personalized methods and strategies using all the information that you are currently amassing. Once you develop the confidence it will be much smoother sailing.

I would be careful with the advice to spend loads of money just because you can buy a better name on a marketplace until you have that experience and trained I so you don’t exceed whatever budget you can afford to apply towards your domain buying.

 

[BrandAptly.com]

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

Please let me see your dead weight .com domains before you let them expire.

 

[Keen]

Monitor the traffic on your Domains!
The domains that I pay good money for GET TRAFFIC!
Buy quality. Dump your garbage and know what qualifies as a good name.
If you get something that somebody else wants (not what You want), you will see your 4 ,5 and 6 figure sales.
Also, do not price your Domains so low.
There are too many domainers desperate for sales that price great names for a few thousand $$.
Do not do it!

If you need money so badly borrow from a friend/family or sell your body, etc.

 

[Kazzia]

Some really good advice here. I would say add an "M" for starters. The .co is a pale comparison to the .com.

Sounds like you are hand-registering - can do but very difficult. Better to pay up on a much better name, and keep it for a few years if you believe in it. Make sure they have enough exposure - list on Afternic (even though they have sucked the last 6 months) and make sure they have a nice landing page - I am trying Uniregistry - those look decent. And price them right - aim a bit higher.

Finally, there is a money and luck factor. It is better to have deep pockets and be average in your buying and selling skills, than on a tight budget and excellent otherwise, IMO. Also, IMO at least half of the success is pure luck. Without an end-user that wants to pay up, your only buyers are way back down at wholesale level, which is your buying point. What confuses me is that I have excellent .com names that are taken and used in many extensions, and no interest over the years, and in contacting them, they are fine with their three word name, or their .online or some crap. Meanwhile, the names I bought years ago that are on my drop list sell as good as any. Sometimes, I can buy a name for $50 and days later someone does a BIN at $2500. Skill? Maybe a little - a good name can be recognized. But 99% of that is just pure luck.

P.S. IMO GD aftermarket prices are out of control these days. I have always been buying a couple names a week on average. This year, I have got maybe two this whole year. Most prices sell for full retail or more than retail. How can that be sustainable?

 

[J Sokol]

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

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

That's an interesting point - I've been able to sell most of the domains I've bought, but mostly at low value. I'm now trying to discern the difference between a xxx and a xxxx domain. I trust I will figure it out with time.

 

[Zagalee]

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.

Well Said!! This is the strategy I'm practicing, choosing quality over quantity for a long-term portfolio. Nice input.

 

[topdom]

If you are making good money, why care about 4 figures. I haven't sold any domain for $ 765 or $ 1059 but I don't care. And although I consider myself professional, I'm not making any profit. (because I'm handregger at the moment, and not doing outbounding enough, and marketplaces are bad, and most buyers are flippers killing this business, and any earnings are reinvested).

 

[Joe N]

Its becoming increasingly difficult to find good domains on closeouts, the expired auctions seem to very lively at the moment so I assume most are not reaching closeouts.

I did snag a really good one the other day though, looking forward to it hitting my account.

I've only been at this for four years, but I find the quality of closeouts ebbs and flows. Pickings are a bit slimmer lately, though, I agree.

 

[Bob Hawkes]

OK I have never tried this personally, but I admire the people who go the route of finding names that are no longer being used by businesses or individuals, but not expired, so not competing in the expired auctions, and then try approaching them to see if they will do a private sale. It takes more than simply scouring closeout lists, expired auctions, or recent drops, but I suspect occasionally you are rewarded with outstanding names at great prices. As I say, I am not speaking from experience - have others on this list tried that strategy successfully?
Bob