(Almost) A Decade of Domaining...

Nikul Sanghvi · Dec 23, 2017

Some questions came up on the sales thread around trading strategy, so I wanted to write something that shines a bit of light onto my recent performance and current setup. I thought it would also be pragmatic to explain the journey to this point so that my thinking is framed in some context.

In particular, the questions (on sales thread and via DMs) are about revenue, investment levels, ROI and building a profitable portfolio. I’ve put the post here under AMA, as I wanted to provide a level of transparency that’s rarely given in this industry. I also wanted to allow room for NP members to dig deeper into anything specific.

This has been my path - and that doesn’t make it right or wrong. It’s just how I’ve set things up, to work for me. The first thing to take away from this post is that you can’t emulate someone else's journey because your personal circumstances will always be different. What you can do instead is understand multiple strategies and combine the various elements to shape your own method.

The journey so far...

I was pretty late to the game (2009) and started out by hand-registering domains in .co.uk and .com. Over the first two years, I amassed around 200 to 300 domains, had three low to mid $XXX sales (on domain forums and via WhoIs). I kept no records, accounts or notes. Sales got a bit better in 2011 but I still didn’t make any profit. My first Sedo sale was for $300 in 2011, around two years after signing up. Most of what I had registered was garbage but I continued to renew out of sentiment and sunk-cost fallacy. Overall, my costs were around $2k to $4k per year and I barely sold $2k over three years. The sales I made were just sheer luck, from a spray-n-pray approach. My 'day job' at the time subsidised the losses of the learning curve.

In Year 4 (2012), I slowed down the hand-registrations and started buying low-value domains, between $20 to $250 per domain. With about $5k per year going into the pot, I eventually started to break even on sales. Around this time, I formalised into a limited company and started keeping my own accounts. From this point on (up until very recently), I stopped taking domain related profits out of the business, to focus on reinvestment.
Once I started to build confidence (mainly from not being in deficit), I also pushed another $15k of savings into domains to start buying a few at low $XXXX - albeit, overpaying for many of them.
In addition, I also bought one particular domain for $10k after two months of research. It was a category killer .com for an emerging technology niche and I planned to develop it as a site.

Year 5 (2013), no sales for the whole year. No major purchases, around $4k loss from in renewals.

Year 6 (2014), ticking along, sales in low 5-figures. No major purchases. Profits (after renewals) were kept in the business.

Year 7 (2015), I got lucky and things jumped into hyperdrive.
I sold my $10k domain for six-figures in a private transaction. The previous owner had reached out to me to try and buy it back. I declined but was curious as to why he’d try that. I then had an inbound email from the end-user and we negotiated over three weeks before closing the deal. (Turned out the end-user had contacted the previous owner first!).
In hindsight, the secret ingredient to getting the six-figure price was simple but partly non-intentional - I genuinely did not want to sell the name at that time. I had significant research and belief that it was going to be worth more in the future. Fortunately, the buyer felt the same way.
After the sale, I went on a buying spree, spending around $100k throughout the year - mostly on mid $XXX to low $XXXX. Not all of that money was well spent but I’ll come onto that later.
Of the domains I bought in that year, I quickly flipped an iot-related domain (10x) for just under $40k (buyer requested privacy) and hack.uk for $7.5k

Year 8 (2016), zero sales. Nothing. I felt a bit nervous but I kept buying - spending another $75k on 40+ domains.

This year (Year 9 - 2017), has been a contrast to the previous year. I slowed down spending with only $20k reinvested but reached $120k in revenue across 11 sales.

So why am I sharing those details?…

I joined Namepros in mid-2017, and this has coincidentally been one of my best years for trading in the sales thread. But as you can see, the truth is that it hasn’t always been as consistent or as fruitful. The sales thread acts like a heavily photoshopped instagram feed that only highlights the good moments. It can be misleading when used as an indicator of achievement or accomplishment. The thread provides an environment in which to showcase the peaks whilst completely ignoring all of the valleys. It would be irresponsible of me to only talk about my sales and never anything else. The obscured truth then propagates unrealistic expectations for new entrants into our industry - leaving them frustrated and disappointed within a few years, unable to replicate the same sales.

Over the last 9 years of domaining as a hobby and side-business, I’ve only made profits on three years and that's not even three consecutive years. It’s safe to say that my performance in 2017 is not representative of my overall track record but it is a culmination of the process. Since 2009, I’ve invested/reinvested around $250k into domains and sold around $400k worth of domains. A big chunk of the total revenue came from a single sale. For me, it isn’t anywhere close to being reliable as a primary source of income (for me). Taking money out of the business also limits its future growth.

My current ‘core' portfolio is less than 300 domains, but all have been paid for through previous sales and profits. I’m likely to renew at least 80% of these. My largest concern is that I’m heavily over-indexed with .co and I’ll address this imbalance as a goal for 2018 (buying more .com)
I also have a ‘testing’ portfolio (around 800 domains) that has a much lower propensity for renewal (high churn) but I’m constantly using it to test new purchasing tactics such as buying deletes or bulk buying during coupons/discounts.

I wanted to share all of this context before I gave any advice… primarily to highlight that I’m far from an expert in this field, and also to show that like many of you, I’m still finding my own feet.

Here's brain dump of things I’ve learnt over the last 9 years - might be useful for new domainers...

At the beginning:

Don’t expect much if you’ve just started. In fact, expect losses and a steep learning curve. But keep learning. The sales thread is important but use it as a reference tool, and not a yardstick.
Reading is essential but I’d also recommend learning through action. There’s no point in waiting until you feel like you know everything. There is no such thing as for complete knowledge or a perfect strategy. Get going, seek feedback and then iterate over time for improvements.
Learning to sell hand-registrations is a low cost way to learn about what sells and how to sell. But it’s also a great way to become disheartened and defeated - because it’s harder to sell hand-regs than it is to sell premium domains.
Keep going and keep trying, unless you specifically make an educated decision to retreat because you cannot afford the financial losses. In that scenario, before giving up, first scale down, audit/learn and re-evaluate the existing strategy.

Sales / selling:

I’ve accepted the inconsistency of sales and developed the patience required to avoid panic during the periods of weaker trading. I’m not advocating blind-faith or not having any introspection. Audit your inventory as if it belonged to someone else (without personal attachment), and if you are confident of it having potential, then don’t worry if there are quiet periods.
I’ve said this before but when in negotiations, look for win-win situations with the buyer. Give them respect and be professional, even if they choose to act differently.
I tried outbound marketing for three months this year (for the first time) but didn’t enjoy it. It made me feel like I was in a weaker negotiating position and the extra sales didn’t offset the time investment. I know it works well for many people and can be very profitable, so maybe I'm doing it wrong. Learn about this as early as you can. Contrary to common belief, low value domains don’t sell themselves very often.
I have a deliberate and documented exit point for each domain, so that I don’t wait for infinity. Just because the first offer was $XX and the second offer came in at $XXX, doesn’t mean the third offer will arrive at $XXXX. Owning the asset inflates our own valuation subconsciously. But if there is a final offer, the easiest thing is to ask is, ‘Would I buy the domain today, for the same amount of money as this offer?' (Abstract yourself from the current ownership of the asset.) If the answer is no, sell it. Don’t be frightened by the imaginary 'money left on the table’… it’s an illusion that will skew the exit point.

Pricing:

The price that a domain is bought for has no bearing on the potential sales price (within reason). There is no pre-defined logic to say that the markup must be 0.5x or 2x or 5x or 10x - but it’s likely that the 10x or 20x will take exponentially longer than the 2x. It’s useful to think about how long you’d be willing to wait for each domain to sell. Leave aside some money to renew the best domains, so that you don’t risk losing them.
Once you start buying at $XXX and upwards, make sure to have some moon shots. Maybe not lambo money or life changing sums but don’t be scared to try and sell your favourite $500 purchase for $20,000. Likewise, don’t be scared to price a $2,000 purchase for $50,000. If you don’t try, it’ll never happen. I’ll always aim to have at least 5 domains that are designed to make the needle jump rather than move up in increments. I’ve used the cricket analogy before but you need to choose which balls to hit for a single run, which ones to hit for six and then have a couple that you can try to smash right out of the stadium (often serendipitously).
Use the cash flow from your single runs to fund renewals, so that you can hit the sixes (/home runs). Without this, you can end up under-selling your 'winner' domains to fund your ‘losers’. The compounded returns of small sales are the bedrock for making the bigger ones.
At the other extreme, if you realised that you’ve overpaid for an asset (‘loser'), don’t be afraid to sell it at an acceptable loss. An exit will still bring cash flow but if you anchor yourself to your purchase price and wait for an offer above that purchase price, you might one day find that another $50 or $100 of renewals has gone into it. Even worse, the loss may have widened against the updated market value.

Buying strategy / building a portfolio:

The simplest and most fundamental principle of the game is this: identify assets that you think are undervalued, buy them and then sell them at a price closer to (or above) your estimated valuation. This means you need to be able to spot the domain as being undervalued, calculate by how much it is undervalued, and then make a risk calculation on the duration period within which you might be able to redeem the delta (through reselling). To do this, you need to know market values but also identify the direction within which the market is moving (e.g. which niches are trending, what types of names are selling)
There are no magic formulas based on volume or number of domains in a portfolio. Buying 10 domains at $XXX, doesn’t equate to an automatic $XXXX sale. The primary force driving the probability of sales is the quality of the inventory (and subsequent demand for that inventory), not the quantity. However, a large portfolio of above average quality will compound the probability of sales, albeit at a higher annual cost.
Build upwards towards scale… by that, I mean towards higher-value domains. Every low value ($XXX) sale that I have is simply to create contributions towards acquiring and renewing the higher value domains. Perfect example of the pareto principal: I now use 80% of my capital to buy 20% of my domains, and the remaining 20% of the money to buy/renew the other 80% of inventory.
Obvious but easy mistake - if you’re awaiting a big sale, don’t spend or reinvest the cash until you’ve banked it…
...and once you've received the funds after a sale, don’t let the cash burn a hole in your pocket. It’s too easy to spend/waste money which has been mentally-accounted for as ‘house money’. I’ve always made my worst purchases immediately after I’ve made my best sales. After the six-figure sale, I deceived myself into thinking that my judgement was impeccable, and therefore any future investment that I made would also be bulletproof. I quickly reached an unsustainable level of risk tolerance, thinking that I’d easily repeat my success. A false sense of confidence and arrogance caused me to be irresponsible.
If I’m investing or buying in a niche (driverless/crypto/etc), I often find myself stuck in a filter bubble (/echo-chamber) where all the content around me connects to that niche (twitter / blogs / forums etc). It happens by accident during the research process and suddenly I start spotting related content and keywords everywhere. It creates a fall sense of confidence, makes the niche look ubiquitous and causes me think that the investment is hotter than it really is. (On the flip side, it’s also easy to get niche FOMO).

General business advice:

Keep aside money for quarterly/annual taxes, renewals, subscriptions and training/books for yourself.
My accountant is one of the best advisors / mentors that I have. In due course, finding a good accountant is essential and worth the money. I still keep my own accounts but have valuable support throughout the process.
Listen to others, especially those that disagree with you. If you ask for opinions, and receive views that challenge your perspective on things, pay attention and try to understand where they come from. The worst thing that an investor can do is only to seek opinions that reinforce their own. It inhibits learning if you receive a challenging viewpoint and then immediately double-down (reaffirm) on your own opinions without giving it serious thought. My best friends and advisors hardly ever agree with me from the outset - and that’s why I value their perspectives.
There is a constant battle between your analytical thought processes and your emotions/gut. If you can control the emotions, you can also control the biases that affect decision making. That’s why its’ important to feel good about domaining and be happy with the decisions you make. If it’s becoming emotionally stressful or if it is affecting your health/wellbeing in a negative way, you’re doing it wrong. Of course there will be ups and downs. But your emotions are deeply connected to your gut instinct. And that same gut instinct is connected to your appetite/ability to take risks. You need to be able to sustain the depths of regret when you hold your ground on a key negotiation. But most importantly, you need to be able to sleep well at night, even when things aren’t going perfectly.
Keep learning but accept that there’s no perfect answers or ultimate strategies. Be aware your own circumstances, strengths and weaknesses. Understand your own emotions, irrationality, boundaries and decision making processes. Search for and discover your own blind spots. Find people to surround you that constructively/lovingly identify these blind spots, and can fill them with their own knowledge. Don’t underestimate the role of luck - complete control is an illusion. Finally, no regrets - only lessons learned.

If you’ve read this far, thanks for sticking with me. I hope that within the rambling, there’s at least one or two valuable things that you can take away from the post. Feel free to ask me anything below.

Nikul Sanghvi · Jan 25, 2021

Greetings everyone - I hope all of you are well and staying safe. Thank you to everyone who has liked, shared and supported this thread so far. And welcome to anyone reading for the first time…

I wanted to give a quick update and talk through my 2020 trading.

Here’s a summary:

$141k of total sales
Minus $21k in commissions and fees
Minus $29k renewals and further registrations
Minus $45k for purchases and acquisitions
Net approx $46k (before tax)
83 sales in total (an average of 7 per month)
42 sales via DAN ($56k) - mostly Make Offer
38 sales Afternic ($78k) - mostly BIN
3 sales inbound via email
Extensions sold: 76 .CO, two .IO - and one .CC, .GG, .SO, .UK and .CO.UK
Average sales price of $1700
Average hold time per domain was 20 months
Average purchase price of domains sold was $34
Average portfolio size around 2000 over the year, now close to 1700
Annual sell-through rate at 4%

Here’s how that 2020 stacks up against the previous three years:

You can find a breakdown of my 2017 to 2019 trading in last years update here:
https://www.namepros.com/threads/almost-a-decade-of-domaining.1056328/page-5#post-7572841

At the start of 2020, my portfolio was somewhere around 1500 domains. By the middle of the year, it had peaked at around 2200 domains (mostly coupon deals). I’m down at around 1700 domains and still have another 400 that will drop over the next few months.

My sales volume in 2020 was higher than previous years... but I continued to see a fall in average sale prices:

In 2018, it was $2670 - removing an outlier $19k sale brings it down to $2144.
In 2019, it was $2252 - removing a $15k sale and $9k sale brings it to $1809.
In 2020, it was $1700 - I had no outlier sales (the highest was $5.5k)

I was surprised that despite a strong year in terms of volume, I had no sales in the five figure range. I did have several inquiries for the more premium end of the portfolio, but most were in the low-five range and my expectations were higher.

(Please note: three domains are not displayed on the above list)

A NEW NORMAL?

At the start of 2020 (like many others around the world), I lost my ‘normal’ source of income as a consultant. Far from ideal, but was super fortunate to have a domain portfolio to fall back on.

I’ve said it in the past, but unless you’re already a millionaire, it’s stressful, difficult and financially unproductive to depend on domain names as your main source of income. This is especially true if you live in a city with an above-average cost of living. You can give up as many luxuries as possible, and reduce your monthly expenses, but it remains stressful because you need sales to pay for things like rent, utilities and food. It’s difficult because you naturally become risk averse: every purchase or negotiation method gets double-guessed. When you constantly doubt yourself, it takes a toll on your own mental health. Lastly, it’s financially unproductive because pulling money out of the business for living costs will reduce its ability to be reinvested and to compound over time.

In March 2020 I started to lower my prices to increase the sell-through. I was hungry for cash flow (which remained an issue throughout the year), needed the certainty of sales revenue and also felt an emotional need to be motivated by the dopamine rush of making a sale. I think all of us initially were concerned about the economic ramifications of COVID and the subsequent lockdowns - and there was a bearish mood. There were very few domainers who remained bullish (notably @Josh R, who had the foresight to anticipate that higher demand was on the way).
My traffic by March was up around 20% across the portfolio and inbound inquiries were consistent (around 10-15 per month). I wrote a very brief summary in April about Q1 performance here:
https://www.namepros.com/threads/in...en-in-sales-and-queries.1185306/#post-7721141

Until March, I was trading in a very similar fashion to previous years. Here’s what the year of trading looks like in a cumulative fashion:

I underpriced for the first burst of end-user activity - which was probably around March to May. After numerous conversations with peers around the influx of startups and the rush for businesses to digitise, I started to lift my prices back to previous levels. After getting back to normal prices in June, I continued to see sustained levels of sales despite higher prices. The demand in the market was absorbing the price.

That second burst of sales continued across the summer months of June, July and August. These were normally quieter for me, but things didn’t slow. The sales of those three months in 2020 were higher than the previous two summers combined.

September and October continued at a good pace, and I finally saw some cool down for November and December.

SALES VENUES

The final breakdown for the year ended up looking like:

42 sales via DAN ($56k)
38 sales Afternic ($78k)
3 sales inbound via email ($7k)

Here’s a breakdown of the 2020 sales volumes between DAN and Afternic. I’m not quite sure what happened in July, but it was a clean sweep for Afternic! I was using DAN landers for the whole year, other than three weeks in November.

I consolidated my sales venues towards the middle of 2019, to focus on Afternic and DAN. I had domains listed at both, using BIN and MakeOffer (but no minimum offer value). I also consolidated to using DAN landing pages for 95% of my portfolio, again with BIN and MakeOffer. I continued to use this setup in 2020, as it seemed to work quite well.

In previous years, there had been some issues getting .CO domains to display properly on GoDaddy - and in January 2020, I discussed this briefly with Cameron Cortez at NamesCon in Austin. He reached out to me a few weeks later with a follow up email and we discussed plans to get as much of my portfolio activated for Fast-Transfer (shoutout to Cameron!).
I hadn’t used Fast Transfer in the past, mainly because .CO domains were not eligible - but Cameron informed me that this had been resolved within the last year. As a bonus, Fast-Transfer activated .CO domains would also start displaying within GoDaddy. And following the GoDaddy acquisition of Uniregistry, it also joined the Afternic network - allowing me to list hundreds of domains that were previously ineligible for Fast Transfer. After finally getting Fast-Transfer enabled for most of my portfolio, I quickly saw an increase in sales coming from the Afternic Network.

Whilst I was super impressed with the Afternic network and Fast Transfer (and the GD/Afternic teams!), I was less impressed with their landing pages, which I tested for 3 weeks in November. DAN has always been the best performing landing page for me. My portfolio isn’t big enough to produce any statistical significance, so please keep in mind that my experiences are personal and anecdotal. Having said that, DAN constantly produced around 10-15 inquiries per month for me over the course of 2020, and I would convert somewhere between two to four of those inquiries into sales.

At the start of November, I switched around 1800 domains over to NS3/NS4 servers for Afternic landing pages. I had three BIN sales over those three weeks, and zero inquiries. I heard nothing else from Afternic - radio silence. I missed seeing the regular flow of inquiries, and I missed seeing the traffic data in Google Analytics. November was very close to being the worst month of the year, so I switched back to DAN landers. I can’t really say why those Afternic landing pages didn’t perform for me, as I know they have worked wonders for other sellers. I very likely didn’t give them enough time before switching away.

I also think DAN landers work better for domains in the sub-$5k range. With the Afternic landing pages, the buyer can’t even see the price upfront - so unless they are highly motivated to buy the domain, they are unlikely to fill out a form and talk to a broker on the phone. Most of my sales tend to be in the $500 to $2500 range - and I suspect a large portion of these are impulse buys that do not bode well with ‘Price On Inquiry’ format of landing pages. Just a thought, and I have no real data to back it up with - so I encourage everyone to try different landing pages and find what works best for their own portfolio.

I’d be more interested to try Afternic pages again if they had:

BIN landers (which I think is in the works)
A better flow of information - visibility on inquiries, traffic volumes etc
(I did manually ask an Afternic rep for a report, but didn’t receive anything back)
A better front-end user experience (such as the Uniregistry or DAN UI/UX)

I don’t make use of payment plans for now, but plan to test them in the future. And I suspect this is another feature that will be rolled out by Afternic/GD in the not too distant future.

SALE FORMAT: BUY IT NOW VS. MAKE OFFER

Including the three sales made via email inquiries (as Make Offer), I had in total:

40 BIN sales - at an average of $1656
43 MO sales - at an average of $1741

Pretty close as far as averages go.

My analysis also tells me that those 43 domains sold using Make Offer had a total list value of $126k - but generated a final sales total of $75k. The total value of domains sold via negotiations was 60% of the list value. So my average discount during negotiations throughout the year was -40%.

I wasn’t surprised by this level of discounting, as I knew that I was factoring this into my pricing. What surprised me more, was that I was achieving a similar sell through rate and a very similar average price through BIN sales. And those BIN sales are 100% of the list price, so no discounts. That tells me I’m not overpricing… the market is willing to pay for those domains at full price.

And it’s not rocket science that if you have ‘Make Offer’ visible on a landing page, it will get used, even if there is BIN presented. I understand that, but I still like the idea that the BIN price being shown on a page will anchor a price in the mind of the buyer and represents up front what my ideal expectations are for the domain.

It leaves me scratching my head and wondering: if I switched to BIN only, would the loss in revenue from MakeOffer sales be offset by achieving 100% of the list price on BIN sales (no -40% discounts on half of the sales)?

SALES FORMAT VS. SALES VENUE

Looking from a different angle, it’s interesting to note that average sales prices of the domains sold on Afternic vs DAN:

38 Afternic sales - at an average of $2050
42 DAN sales - at an average of $1333

I started to think about what might cause this variance in average sales price between the two venues - and immediately considered how many sales from each venue were made via BIN vs. negotiated via Make Offer?

Below is a breakdown of the sales venue, as well as the sales format (BIN vs MakeOffer):

It’s clear that the majority of Afternic sales were BIN - and the majority of DAN sales were Make Offer. Of the 40 BIN sales in total, the average BIN price at Afternic was 65% higher than that of the BIN sales made at DAN. It’s likely that DAN wasn’t as effective at producing BIN sales because I had ‘Make Offer’ as an option on the page.

The Make Offer sales at Afternic were nearly three times higher in value than those at DAN. However, the domains were above-average in quality and BIN-priced to reflect that, and the inquiries were presented to me via Afternic reps. This might be because Afternic reps won’t bring offers to the table unless they are a certain percentage below the asking price. But I also didn’t discount as heavily, and the reps are likely much better negotiators than me.

Overall, the Afternic network yielded a higher total revenue than the DAN landing pages - even after commissions. It also yielded better averages on price for both BIN and MakeOffer. This is not however, a dig at DAN (they have been excellent!) - but more of an issue with my own strategy. Firstly, I have the Make Offer option displayed on the page. And secondly, when an offer does come in, I’m keen to close the deal, often with large discounts. Coming back round to the financial pressures of depending on domain sales for personal income, I can see that the eagerness to close sales might come at the cost of a lower yield. The regular flow of sales gives me comfort, but it could be less effective than a lower STR with a higher average price. Perhaps something to test out this year.

HOLDING DURATION

Over the previous three years (2017, 2018 and 2019), half of all domains sold were held for less than a year. And 80% of all domains sold were held for just under two years.

This year (and last year), it became harder to replenish inventory. Auction prices ran up quickly and the .CO registry continued to reserve domains at premium prices. It resulted in my holding times increasing slightly, as I carried on selling inventory that I’d bought in 2017 and 2018.

For the 83 domains sold in 2020:

40% were held for less than a year (34 domains)
18% were held for one renewal (14 domains)
35% had been renewed twice (29 domains)
The remaining domains included one bought in 2015 and one that I’d handreg’d in 2011.

The domains that I’d held for less than a year had an average sales multiplier of 34x (sale price divided by purchase price). For the domains that I’d renewed twice, this multiple goes up to 123x. This reflects the nature of .CO price changes that happened between 2017 and 2019. Although 35% of domains sold had been renewed twice, their average purchase price was only $11. No talent on my part, just pure luck of getting into the .CO extension before the premium tiers kicked in.

SALES MULTIPLES

Whilst we’re talking sales multiples (comparing the purchase price against the final sale price), I mapped out the 2020 sales in a similar fashion to the 2019 post. Again, I’ve used a logarithmic scale to give greater clarity. Of course, these multiples don’t reflect renewal costs, but simply show a relationship between the purchase price and the gross sale price.

Below are all of the sales made during 2020. The X-axis shows the purchase price. The Y-axis shows the multiple at which it sold (10x, 100x, etc). In the top left, is a .UK domain that I can’t share, but it was registered for just over $2. In the bottom-right corner, is Syzygy dot co, which was an extravagant purchase for me at $279 and sold at a multiple of 17x.

The .CO sales are loosely represented as three groups:

The $2 to $5 promo codes sold mostly between 100x and 500x
The $9 and $10 handregs sold between 50x and 200x
Fifteen sales of premium tier .CO registrations (bought at $109-$120) were sold for approximately 15x to 50x

The other extensions I started to play with (.IO, .GG, .SO) were handregistered in the $24 to $36 range - and they’ve ended up somewhere between 15x and 120x. There’s no conclusion to be drawn from those yet, as I don’t have anywhere near the same volume as .CO domains.

WHAT DID I BUY?

This time last year, I said that I didn’t really know what I’d be buying in 2020, and that lack of vision ended up as a mish-mash of spending throughout the year. I only had two main goals: diversifying and buying more quality domains.

As mentioned above, I started to explore alternate extensions like .SO, .VC, .CC, .GG and I also increased the number of .IO in my portfolio. This time last year, the composition of my portfolio was around 95% .CO. Within the next month, that percentage will be down to 70%.

Whilst I continued to indulge in the big .CO discounts at the start of 2020, I quickly realised I was getting sucked back into a trading strategy that I knew wasn’t efficient for me.
I started reinvesting back into fewer but stronger .CO domains (Axe, Chess, Lion, USA) - and also expanded towards premiums in other extensions, such as .IO (Eternal, Wear) and .NET (Crystal).

My overall criteria for what constitutes a good investment in alternative extensions has remained largely unchanged over the years, and doesn’t differ drastically between .CO and other repurposed ccTLDs: https://www.namepros.com/threads/will-a-buyer-buy-your-co-lets-discuss.1201025/#post-7875803

My investment strategy still recognises that there is money to be made outside of .COM. But I am also aware that I need to shift some percentage of reinvestment back towards, what is without doubt, the most dominant extension. So my overall spending plans for 2021 remain similar: explore other ccTLDs, diversify where possible and consolidate overall portfolio value towards fewer but better domains.

WRAP UP

If you’ve read this far, thank you... I appreciate the effort needed to stick with a post this lengthy.

I’m grateful to be part of the domain industry, primarily as a means of providing for my family - but importantly as a source of friendship and community. That’s why I believe that sharing the nuts and bolts of a portfolio helps others to learn, more than sales data alone. This process of writing helps me to find clarity - and I hope that everyone reading is also able to take away something of value.

Thank you again! I wish you health, happiness and plenty of sales. As always, feel free to comment or ask me anything below

Nikul Sanghvi · Jun 29, 2018

Thank you to everyone who has read, shared, commented or got in touch with me about the original post in this thread. The response from NP readers was a major motivation for writing this update. I wanted to follow up with a deeper dive into one of the specific things that I had mentioned back in December 2017:

Nikul Sanghvi said:
I also have a ‘testing’ portfolio (around 800 domains) that has a much lower propensity for renewal (high churn) but I’m constantly using it to test new purchasing tactics such as buying deletes or bulk buying during coupons/discounts.

[Make a cup of tea or coffee first, the approx reading time is 25 to 30 mins ]

A little over a year ago (in May 2017), I began hand-registering deleted .CO domains in order to build up a sub-portfolio. The general hypothesis was that some of these deleted domains were undervalued and could be resold for profit. I filtered the domains using some well known tools, registered a few each day and aimed to sell at least one a month to generate some cash flow.
I didn’t expect to sell more than 1% of the total portfolio over the whole year, so I knew the domains had to be priced in a way that would allow for break-even (at minimum).

The portfolio was tracked and measured over the course of the year. By the end of April 2018 (at peak-inventory), it consisted of 1262 .co domains at a total cost of $9.5k. As of today, (time of writing = end of June 2018), the portfolio has had 19 sales, totalling almost $38k. After deducting the registration costs and marketplace commissions, the portfolio has made $23k of profit to date.

I wanted to share some details about the methodology and results, for two main reasons. Firstly, so that my posts on the sales thread would have some context, and secondly, so that others could learn from the process. (Please head up to the top of this thread if you haven’t read it before!).

Getting started...

The first step was creating an account on ExpiredDomains.net. If you haven’t used this tool before, I’d strongly recommend signing up and having a play. I used the ExpiredDomains search tool to create a filter looking at the daily deletes. I tried a variety of filters in the first few months, but in the end, I settled with something very simple. The three filters I use are:

CCTLD = .CO
Social Namecheck = Twitter
Name in selected TLD is registered = .com plus 5 others.

The ‘CCTLD = .CO’ is obvious, we only want to see deleted domains for .CO

The social namecheck for Twitter is useful because I’ve noticed that if the domain doesn’t have a matching twitter handle, there is unlikely to be a business that is actively using that name. It also automatically eliminates domains with hyphens or domains over 15 characters.

Lastly, for ‘Name in selected TLD is registered’, I was searching for the domain to be taken in other TLDs. I always selected .COM in the filter because for an end user, buying a .CO is nearly always an alternate option to buying the same domain in .COM.
If the domain isn’t already taken in .COM, I think it’s pointless to register the .CO equivalent.
I also found a specific selection of other TLDs that showed me that the deleted .CO domain could have a higher propensity to sell. I don’t want to reveal exactly which ones because it’s not the purpose of this post to give a specific recipe. It also eats into whatever tiny bit of competitive edge that I'll have remaining once this is posted! What I can say is that all of the other boxes I tick are also ccTLDs.

Aside from the filters, I used to sort the presented list based on ‘SG’ (global searches) but I quickly found this metric to be unreliable as it displayed zero for a lot of domains. I started sorting by ‘TLDs Reg’ which shows the number of TLDs the domain is registered in. For me, it’s the simplest way to give a ball-park estimate that there is existing demand for the domain. If the domain is registered in my six selected TLDs, along with 20 others, it’s a great signal. This is one of the reasons I’ve found it easier to sell hand registered .CO rather than hand-registered .COM. It’s hard to pay $9 for a .COM that is registered in 29 other extensions. However, it’s still possible to find a .CO that gets deleted and is already taken in 25 to 31 other extensions. Potentially, that’s a bad sign - and the counter-argument might be that the reason it gets dropped is because it is perceived to have no value.

I found this metric of ‘TLDs Reg’ to be a north-star metric. In the absence of any other data, it reflected the sale-potential better than any alternate metric. It fits in this context, because I was not focusing on any other specific aspects of the domain - such as keyword volumes, ppc competition or age. The filter simply looked for domains that were taken in many of the other most popular extensions.

The drop for deleted .co domains happens at around 18:04 GMT or 19:04 BST (British Summer Time). Once the list became available, I’d quickly hand-reg one or two (near the top of the list) based on gut feel. For the others, I would:

Search the domain (without .co on the end) on LinkedIn, filtering for ‘Companies’ only. Depending on how many companies came up in that list on LinkedIn, I’d either register immediately, or dig deeper. When digging deeper, I open out at least a dozen companies listed on the first page. I ignore any companies that don’t have a logo and I also tend to exclude companies with only 1 employee. It’s easy to look for potential buyers by expanding the company profile and looking at their existing domains in use. Here’s the opportunity to spot the upgrade paths. Could someone with example-group.com upgrade to example.co? I’ll talk about outbound later, but this information is something that I didn’t fully utilise.
I also search quickly for the domain (again, without .co on the end) on Twitter. If I could see under the ‘people’ tab, a handful of businesses using the name, it was a good sign. I’ve found over time that businesses who are active (or have presence) on social media are more likely to invest in domains.
Lastly, for many, I would run a quick search on Google and Wikipedia.
Here are a few more notes about how I choose what types of .CO to buy/register: https://www.namepros.com/threads/wh...ce-for-two-words-domain.1063706/#post-6557582

(For more expensive domains, I have a deeper research process. I have detailed an example here: https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-567#post-6484675)

If everything looked ok using the search criteria above, I would register the domain. In summary, I was looking for business names that already have a high level of usage. Firstly, because it provides an immediate variety of potential buyers. Secondly, if the business name is already in frequent usage, it’s likely to be used again by newly formed businesses. That last point is counter-intuitive, but the logic is that, if there are already 50 businesses called example, it’s likely to be a popular choice. If there is only one business called example2, it’s not a popular business name and the domain is unlikely to find a buyer. I think it’s important to clarify at this stage, that the goal was (and still is) never to seek out unique domains that are in use by a specific business. I made every effort I could to avoid specific trademarks or unique domains that could only ever have had one buyer. Every domain purchased needed at least a dozen potential end-users.

I had set aside around $15k at the start of the process, but I didn’t end up using all of it over the first 12 months. Here’s the breakdown of my registrations:

The first spike in July 2017 was a Name.com Happy Hour, followed by the .CO birthday special a week later. The last spike in March 2018 was a $4.88 Namecheap price promotion that lasted almost a week.

Below is the breakdown of the registration costs consolidated by month:

I started buying in early May, but I was distracted by new arrivals into my family. On the days where I was active, I found that my filters weren’t giving me the right types of domains. On other days, I was searching several hours after the initial ‘drop’, but many of the good names had already been taken. In the first few months, there wasn’t a daily discipline. On average, I ended up searching ExpiredDomains only once or twice a week on average.
It wasn’t until October that I really started to ramp things up. Around 90% of my total spend was concentrated in the seven months between October 2017 and April 2018. This partly skews the results of this exercise but I still wanted to include those first five months in the data, as I was still learning and refining during that time.

Over the year, I used four different registrars: Namecheap, Uniregistry, Name.com and GoDaddy.
I bought at nine different price points (shown below) including six discount promotions.

These NP threads were really helpful and I’m grateful to everyone who flagged up a discount code or promotion: https://www.namepros.com/forums/domain-coupons-and-offers.358/

I spent around $1.8k during those promotions and picked up 431 domains at an average of $4.25. In hindsight, I underutilised many of them… especially the $1.50 (and less!) event for the .CO birthday celebration.
The remainder of the budget was mostly split between $8.88 at Namecheap and $9.88 at Uniregistry. Again, in hindsight, I could have constantly sought cheaper options but I found that spreading the domains across more registrars would complicate the management of them.

I also registered the vast majority of those Namecheap and Uniregistry domains via my mobile phone (approx 800 in total). The workflow was optimised for speed at time of deletion/release. I had the Namecheap or Uniregistry mobile app open on a phone. On my computer, I had ExpiredDomains open on one browser and LinkedIn on another (to allow faster tabbing between the two). The cost of this faster workflow was that it wasn’t always the cheapest. The gained advantage was the ability to register domains that would otherwise be gone within the first ten minutes of availability.

It’s worth noting here that this entire experiment is only made possible by the fact that the first year fees are subsidised for .CO domains. The full price at time of renewal (at the end of year one) is upwards of $23. Buying 1262 domains at that price would have cost $29k instead of $9.5k. If an investor doesn’t keep an eye on the ball when renewals come around (with auto-renew enabled), it can end up being a very expensive learning experience.

Turning registrations into sales...

After registering the domains, I set the nameservers to Sedo parking, and listed them on Sedo and Afternic. Some registrars allow you to set default nameservers that get applied to every new domain registered, instead of having to do it manually.
As expected, parking revenues from Sedo were negligible - and I never intended to make money from it. It’s a shame that Sedo nameservers resolve to parking landers, instead of directly to a sale page - but that’s a rant for another day.

For the first 10 months, I had the Sedo landers set to ‘Make Offer’ with an asking price listed, but no minimum offer. For Afternic, I’ve had a Buy It Now price (same as the asking price on Sedo) along with Make Offer and a minimum offer. In mid-May 2016, I also began using Efty landing pages, at which point I enabled BIN on my Sedo listings.

I didn’t use any advanced methodology on pricing - but instead used the number of potential end-users as a guiding metric. Most of the asking prices were set between $2000 and $5000. My floor price varied from domain to domain, but I tended to look for between 40% to 70% of the asking price during negotiation. I was inconsistent with this, which is something I’ll talk about later.
Throughout the year, I messed around with the numerical endings (00, 25, 49, 50, 75, 88, 98 and 99) but found little conclusive evidence that one was vastly superior. The majority of the sales closed with 00 as an ending. I rarely ever found that any buyer negotiated without numbers rounded to the nearest hundred.

Out of 19 sales: four sold at BIN (Afternic), 11 with Make Offer on Sedo and the four most recent were private deals. I lost about 12 additional serious negotiations on Sedo because I was overly-aggressive, even when I should have accepted the opening offer. I also had three accepted offers where the buyer decided not to pay and disappeared.
There’s not a ‘right-way’ or perfect method for negotiations that I can share… or an answer for why some deals fail. Maybe some buyers back out because their offer is accepted too quickly - and they feel like they could have pushed harder. Others might have backed out because they hit a ceiling, and I mistakenly thought that they could keep going higher. It’s difficult to negotiate on some marketplaces because there is no direct relationship between the two parties.

Below are the domains for the 19 sales, shown against the month they sold in and the net proceeds (money in my account after commissions). All transactions are complete and paid for in full. Please respect the buyers and don’t write the domain names in the comments, to avoid search engine indexing.

The chart below shows a little bit more detail about the sale prices of each domain, along with the marketplace commission. The sales without any commissions against them were made privately. For non-marketplace transactions I used Escrow.com and most buyers covered the transaction fees.

The average gross sale price was $1994. After commissions, the average net price was $1728.
My mean purchase price was $7.71, so the average sale price was 259 times the average registration cost.

The average hold time between registration and sale was 107 days (roughly 4 months). The fastest sale was 8 days after registration and the longest was 298 days after registrations.

I didn’t have any sales from this portfolio for the first five months. If I include those months, my inventory sell through rate was 0.18% per month. Excluding those first five months, the monthly STR averages at 0.28%. That means that if I have 1000 domains, I can expect to sell roughly 2 or 3 domains per month. The sell-through-rate is important to understand, because it has a relationship with the pricing strategy.
If I only sell one domain out of 1000, that one domain has to pay for the cost of itself, along with the other 999. If each month I register 150 domains, than I have to sell at least one domain for a minimum of 150 times the average purchase price, in order to break even for that month. Or alternatively, I can sell two domains for 75 times the average purchase price, etc.

Even if there is a correlated relationship between price and STR, I don’t know if it can be classified as linear or causal. There is a dependance on demand for each individual domain (and demand will vary), rather than all domains performing as a uniform commodity. Reducing the pricing by half, will have an effect - but it may not exactly double the sales. Someone who has experimented with pricing at a greater scale will definitely have a better answer on this.

The mantra here is not ‘go big or go home’. Far from it. I’m not advocating that everyone go out and replicate scale or start registering thousands of domains each year. Scale is not the only option but it has a purpose when configured correctly. If an estimated monthly STR on a portfolio is 0.2%, there is only a probability to sell one domain out of 500. If the portfolio consists of only 100 domains instead of 500, and has the same monthly STR (0.2%), the probability changes to a sale of one domain every five months. This is assuming the quality of the portfolio remains a constant, but it’s an example to show how larger portfolios can generate greater numbers of sales on a regular basis. Super sized portfolios will also have greater probability to generate outliers which deviate wildly from the average ROI (eg. $10 handreg sells for $50k).

If a domainer accepts a strategy where only 2.5% of the inventory will sell annually, they must also accept that 975 out of 1000 domains will be losers. This goes against most common wisdom for traditional domain ‘investing’, but may be more appropriate when called domain ‘trading’. Or maybe it’s just semantics, and we just have to accept that there are a multitude of routes to make money in this industry. Either way, it’s hard letting go of these losers - so learning to prune a portfolio and drop the excess weight becomes a skill in itself.

To date, around 200 of the 1262 domains have expired. These were registrations from May and June a year ago. Each domain comes with a year of registration, so I still have up to 9 months of holding time for the remainder of the portfolio. Looking at the expected inventory count for each remaining month and multiplying it by the lower of the two sell-through-rates (0.18%), gives me a projection for potential upcoming sales. Without considering other influencing factors, I forecast that I’ll have another 12 sales before the last domain expires or comes up for renewal. If I was to continue to achieve an average sale price of $2k per domain, that would be another $24k of sales generated by this portfolio. (I’ll try to follow up in April 2019 to see whether the actual outcome was close or completely different!).

There's always room for improvement...

No regrets - but there are things that could have been done better, and some that can still be improved.

The search methods and filters that I use on ExpiredDomains could do with refinement. I have only just scratched the surface in terms of functionality that the tool offers, and some of the untested filters could improve the quality of the registrations. Spending time to learn and understand how a tool works will always reap dividends.

I also only listed the domains on Sedo and Afternic, and I realise that there are many other marketplaces that were ignored, including Uniregistry and Undeveloped. I also sometimes took a few days before listing domains on Sedo... because I was busy or forgetful. Some domains weren’t listed on Afternic until after a month of owning them. Those delays reduce the overall opportunity for the domain to be seen and bought.
There is greater opportunity to explore pricing, both in terms of floors and ceilings. I’d be more interested to explore the lower bounds, by bringing the domains into the $1000 to $2500 range. If I had more time, I would also like a sliding system where the pricing has some form of decay rate, such as a quarterly half-life (3 months at $6000, then 3 months at $3000, then 3 months at $1500 etc.)

On review of every marketplace and email based negotiation over the last year, I can clearly see that I had an inconsistent negotiation pattern. When I had made one or two recent sales, I was overly aggressive during negotiations that followed. Where there hadn’t been any recent sales, I became fearful of drought and accepted significantly lower offers. A more constant yield might be achieved through a more consistent behaviour, driven less by emotion.
Before switching nearly all of the landing pages to Efty, I paid around 17% of total sales as commission to the various marketplaces ($5k in total). Switching landers to Efty earlier could have mitigated some of that.

I mentioned outbound marketing earlier in this post, but here’s is where I admit that it could have been executed with greater scale, effort and enthusiasm. I didn’t enjoy the process of reaching out to potential buyers, so I didn’t commit time to it. I think that a successful outbound strategy is essential for maximising yield from a large portfolio. I made lots of excuses to myself about why I didn’t do it, but it mainly came down to laziness.
The final frontier, would be automating the buying and listing process, using a combination of APIs and some CRON jobs. But this is way beyond my skill set. Without the human touch, I would guess you’d also need a large budget to deal with any mistakes that the system makes. Unlike financial algorithms or stock trading-strategies, it’s hard to test a setup like this in a simulated environment.

Wrapping up and other stuff worth mentioning...

I posted this here in the AMA because I wanted transparency. I was also worried that if I created a new thread, I’d try to come up with a clickbait title. This post doesn’t warrant to be treated as a secret recipe or a get quick rich guide. Your own personal circumstances will be vastly different to mine. Your own experience and knowledge will also be different to my own. My appetite for risk-taking and ability to absorb that risk might be different to yours.

I started with an allocated budget and a rough plan in mind. I wouldn’t ever do anything like this on a credit card. I hope that nobody reading this thinks that’s even an option. Throughout the experiment, I had a ‘stop-loss’ in mind and knew that I would stop it if I sank below a particular amount. Knowing when to quit is sometimes more important than trying to win. Walking away intact with a manageable loss allows you to learn from mistakes and come back to fight another day.

Whilst I’ve tried to share as much as possible, keep in mind that this is a relatively small sample size of data. The main reason for measuring the performance of this test portfolio was that I needed a truth that I couldn’t hide from. It’s easy to look back after a while and make up a new narrative that fits the present needs. I didn’t want to lie to myself, and keep repeating a process where the true costs and true value were unknown.
I’d also place emphasis on keeping a simple journal throughout an exercise like this. It’s very difficult to reflect back and remember how things actually felt at the time. The financial profit isn’t always the ultimate scorecard.

As with everything, there is opportunity cost. I’ve spent roughly 315 hours across 210 days, and I expect to spend at least another 35 hours on this portfolio by the time the last domain expires. If I look at that another way, that’s 50 days at 7 hours per day (10 workings weeks!). That time could have been used working, learning new skills, exercising, relaxing and with family. That’s a genuine opportunity cost, even though it’s not an opportunity of capital.
The same financial investment might also have yielded a decent return from a single premium .com domain, within the same timeframe… without the time investment or grinding. Investing $10k in stock like Nvidia could have yielded 2.5x over the same period. The obvious trick with both of those examples is knowing which stock or which premium domain to buy... not so simple for most of us.
For comparison, when including the projected future sales and future time investment, the profit generated by the experiment works out at an hourly rate of $98/hour. That calculation has costs, commissions and corporations tax (20% in UK) already subtracted - but it does not exclude income tax.

I’ll probably still continue to look at .CO deletes, but without the same level of vigour as the last six months. I know that the game might change by the very nature of this blog post itself. This post could create more competition for those same deletes, but that’s ok. I might spend the next year by testing slightly higher upstream, with drops and backorders instead of deletes. I’ll also be using data from the experiment (offers and lander pageviews) to extend registration of approx 10% of the total inventory at the higher renewal price.

I place importance on documentation and administration but I’m sure that I make mistakes. I’ve excluded any sales or purchases that are not part of this .CO portfolio and I’ve also excluded any .CO purchases that I made (non-handregs). Also excluded are a dozen domains that I passed to others for free - family, friends, startups that I admire and companies in my business network. I also ended up returning three domains to previous owners (for free), each of whom had active businesses running on them and had let them expire for various reasons. (Two additional requests from previous owners were refused, because the domains were parked and not in commercial use).

Before I conclude, an essential disclaimer: I have my own particular choice-supportive bias with .CO because I’m heavily invested in it. Take everything written in this post with a large pinch of salt.
This test focused on .CO and the choice of extension will no doubt have had influence on the outcome. Having said that, the methodology isn’t specifically limited to .CO and could be opened out to other TLDs that have demand from end-users but are undervalued. I’m not suggesting that .CO is the most profitable TLD nor am I saying that any domainers should put all of their eggs into one extension (something I am guilty of myself). I’ve written openly about the pros and cons of .CO before here on NP: https://www.namepros.com/threads/dot-co-confusion.1033963/#post-6293060

It’s also worth stating that I have no affiliation with the .CO registry, any marketplace, any registrar mentioned or ExpiredDomains. I work as an independent, without agenda or any other hidden motive. I’m not an expert or a seasoned professional. I trade domains for fun, to learn about myself and to earn a little extra money for my family. If it’s not fun for you, don’t do it.

I wasn't competant enough to shorten this very long post, so a genuine thank you if you have read this far. Above anything else, this was a learning process for me. So as always, I’m looking to hear from your experiences too. Criticism and feedback are not only welcomed, but they are valued and greatly appreciated. Sticking with the AMA theme, feel free to ask me anything below.

Links to the NP sales thread for the sales mentioned (apart from the two most recent):

Nikul Sanghvi · Jan 6, 2020

Thank you to those of you that have been following this thread and welcome to anyone reading this AMA for the first time.

I’d had a few people reach out to ask for an update, so I wanted to give a general overview and talk about how 2019 performed. I’ll also try to connect back to the journey so far, to give context where I can...

So without further ado, here’s a summary of my trading last year:

$108k of total revenue
Minus $11k in commissions and fees
Minus $35k renewals, further registrations and acquisitions
Net approx $60k (before tax)
48 sales in total (an average of 4 per month)
25 sales via DAN ($36k) - mostly MakeOffer
9 sales Afternic ($41k) - mostly BIN
Remaining sales were inbound via Efty, Emails and DomainAgents... one via outbound email
Extensions: 43 .CO, three .COM, one .UK and one .EU
Average sales price of $2252
Average hold time per domain sold was 21 months (at least 1 renewal)
Average purchase price of domains sold was $78 (removing a $2k outlier, this drops to $35)
Average portfolio size around 1200 over the year, now at 1500
Annual sell-through rate at 4%

Below, you can see how 2019 stacks up against the previous two years:

Let's dig into each year in a bit more detail...

2017 and earlier

Prior to 2017, my portfolio size was only a few hundred domains. I hadn’t bought many domains but my acquisition costs per domain had also been higher than at present (mostly between $500 and $10k).
My spend across 2015 and 2016 had been around $175k, but I hadn’t really been buying smart.

(You can read more about 2009 to 2017 here: https://www.namepros.com/threads/almost-a-decade-of-domaining.1056328/)

Despite the heavy spending on acquisitions, I hadn’t had a single sale in the previous year (2016).
I didn’t want that to happen again, so I looked for something that would create some regular cash flow, but with lower upfront risk. I had the bandwidth, so also didn’t mind putting in any additional hours. Having had some success with .CO domains, I decided to try out bulk buying using discount coupons.

Moneyman[.co] was one of the few hundred .COs bought at $1.50 each. It was bought in July 2017 and sold a few months later in October.

The image below shows 2017 broken out further (ordered by sale date, descending):

2018

By mid-2018, the discounted .CO registrations had continued to make a steady stream of sales. I'd spent $9.5k spent on 1262 .CO handregs and had already reached around $37k in sales and a profit of $23k.

(You can read more about this here: https://www.namepros.com/threads/almost-a-decade-of-domaining.1056328/page-3#post-6786857)

That experiment went on to generate an additional $41k of sales without any additional spend, bringing the total revenue to $78k. Taking away commissions, the process yielded $68k of pre-tax profit from the initial investment of $9.5k.

September came quickly, and Neustar killed off the discount strategy with the introduction of the premium tiers on .CO. By then, I wasn’t registering .co in volume anymore but it suddenly became a lot harder to buy good quality .CO domains on the cheap.

2019

By early 2019, my portfolio had reduced from a peak of 1700 down towards 1000. By the middle of the year, I’d reached around 800 domains.

I had also started buying the premium tier .CO to test the water. By April 2019, I’d spent around $6k across 50 domains at $120(ish) each… of those, only three have sold so far, generating $13k in total. It was still profitable, but the pricing tiers had seriously shifted the margins.

I continued to test out discounts for .CO but they had been limited to only non-premium domains.
Since the premium tiers kicked in, I’ve registered around 600 .CO domains between $3 and $7 using discount codes. Out of those, I’ve only sold 1 so far! So although it’s still possible to buy hundreds or thousands of .CO for a few dollars each, their quality has drastically reduced compared to doing the same in 2017… and this is reflected in the overall sell-through rate.

My sales volume in 2019 was higher than 2018 but I also saw a dip in average sale price.

In 2018, it was $2670 - removing the outlier $19k sale brings it down to $2144.
In 2019, it was $2252 - removing the $15k sale and $9k sale brings it to $1809.

This was partly deliberate: after analysing the deals I couldn't close or lost in 2018 due to countering too high or sticking to a BIN, I knew I was leaving money on the table. In 2019, I started to lock in more sales and accept slightly lower offers - especially for inventory that I wouldn't miss.

HOLDING DURATION

Below you can see holding time (Number of Months) for the 90+ domains sold over the last three years.

Half of all domains sold were held for less than a year.
80% of all domains sold were held for just under two years.

When I split this out showing sales grouped by year, it’s clear that sales in 2019 primarily originated from purchases in 2017 and 2018.

WHERE DID SALES ORIGINATE FROM?

The image below shows revenue (2018 and 2019) from the four main sources for me. I also had sales from inbound emails, DomainAgents and one from outbound, but removed them for a cleaner overview.

In 2017, I was using Sedo landers across most of my domains. And in May 2018, I began using Efty servers. I detailed my experiences of the first 100 inquiries here: https://www.namepros.com/threads/almost-a-decade-of-domaining.1056328/page-4#post-7053359

Almost a year later, I started testing out Undeveloped (now DAN.com) landers too. I think they perform very similarly to Efty, but take up less of my time in negotiations and the sale process. In return, you lose the information about the potential buyer that comes through Efty (such as telephone and email) - and the ability to engage in a deeper dialogue through email and phone.
It’s an interesting trade-off - but my time commitment to domaining had started to reduce, so it was worth it for me.

Another interesting thing to note: after switching to DAN, I started to see more regular sales coming from Afternic. Using Google Analytics, I can see that at least three of the transactions on Afternic occurred immediately after a buyer had spent several minutes looking at the DAN lander. In all three cases, the buyer chose to pay a higher price for the safety of GoDaddy/Afternic (or other syndicated venue), instead of buying through DAN. I don’t think this is alarming, but does show the advantage of having a domain listed in multiple places.

SALES MULTIPLES

Lastly, a quick take on sales multiples - comparing the purchase price against the final sale price.

Below are all of the sales across the last three years... I had to plot this out using logarithmic scale for clarity.
The X-axis shows the purchase price. The Y-axis shows the multiple at which it sold (5x, 10x, 100x etc).
In top left for example, you can see Moneyman bought for $1.50 and sold for $1600.
In the bottom-right corner, you can see data dot science - which I bought for $12k and sold for $12.5k.

In the past, I’ve tried to use a tiered structure based on the acquisition price - https://twitter.com/hypernames/status/1122780585125130245

The table in that link is outdated and needs some updating, but I’ve tried to show how these groupings manifest on the graph below:

You can get a rough idea here…

The $1 to $6 promo codes sold mostly between 100x and 1000x
The $9 and $10 handregs sold between 50x and 500x
The three sales of premium tier .CO registrations were roughly 10x to 75x
All purchases that I’d made at $1k or more were generally grouped at 5x or less

Keep in mind, that most of these sales came through make offer. So whilst they were sold within those ranges, they were priced above those ranges to allow room for movement.

There’s a lot of mess outside of these neat rings - so they’re not perfect as groups and there are always outliers. I don’t pick many names to be priced wildly outside of these ranges - but there are always a few in play. You can’t rely on them, but if they sell, it’s a great outcome. I tend to pick names that I really like and then stick a solid BIN on them or hold firm if an offer comes. Qrypt, Qubit and Tempus are three examples of this working with a higher price which is outside the normal range.

WRAP UP

I’d love to conclude with some type of insight into what I’ll be buying over the next few years… but in all honesty, I don’t know at the moment.
Premium .COM domains continue to accelerate in price and demand - getting further out of reach from the vast majority of small businesses and startups. In the void, there’s still demand from these startups and SMEs for alternatives like .IO and.CO, but a wider set of competing extensions (like .AI) and investors now vie for this space.

Registries are also getting smarter, and continue to eat-into the margin that previously existed solely for domainers. The .CO registry’s premium tiers continue to evolve, and break away more frequently from the entry point prices that they’ve used until now. The lines between premium and non-premium have been pushed down so low, that the non-premiums are barely worth the risk, even at $3 each.
These shifts will drive two important elements of my strategy going forward. Firstly, I'd like to focus back on quality over quantity - and secondly, the obvious need for me to diversify my portfolio.

Thank you for reading! Wishing everyone health, happiness and plenty of sales in the year ahead!
As always, feel free to comment or ask me anything below

Nikul Sanghvi · Jan 7, 2019

Nikul Sanghvi said:
In mid-May 2016, I also began using Efty landing pages, at which point I enabled BIN on my Sedo listings.

In May 2018, I changed over 1600 domains to point them towards Efty nameservers. (The quote above says 2016 by accident but it should be ‘mid-May 2018' - apologies!).

I’ve recently logged 100 sale inquiries from those landing pages, so wanted to share my experience. Hopefully this post helps other NP members - especially those of you that are thinking about setting up your own custom landers.

I’ve joined this post onto my AMA thread to stick with the theme of openness and transparency. I’ll do my best to answer any questions.

As a summary of the over the last eight months:

1600+ domains in May 2018… but today (Jan 2019) it's closer to 1300... and falling!
100 inquiries through Efty landers
12 completed sales
Total sales (gross): $20k
Average sales price (gross): $1.67k
Estimated savings on commission: approx $3000 (@15%)

Background...

From May 2017 to April 2018, I used a variety of discounts and coupons to register 1262 .CO domains at a cost of $9.5k. You can read more detail here: https://www.namepros.com/threads/almost-a-decade-of-domaining.1056328/page-3#post-6786857.
Nearly all of the domains were using Sedo landers but I also had them listed at Afternic. Between September 2017 to April 2018, I paid over $5k in marketplace commissions spread over 15 different sales from this sub-portfolio.

I'd known about commission-free landing pages for a while, but decided to explore further in April 2018. Aside from the commission, there were several frustrations that I had with traditional marketplace landing pages and marketplace negotiation platforms.

The first thing that visitors see on the Sedo landing pages are the PPC ads. I’ve never made any worthwhile money from PPC, so my primary goal was always reselling the domains. Having PPC-based landers meant that only a small portion of the page was dedicated to sales messaging. (Visitors using adblockers would see a completely blank page!).

Once the user clicked that message, they’d be taken across to the ‘For Sale’ domain lander and would then need to register in order to make an offer. Each additional step creates resistance but arguably filters through only the most motivated of buyers. I’d been asking the Sedo team for PPC-free landers for a while but I gave up waiting after a year of hearing ‘they’re coming soon’. I knew there may have been some workarounds with redirects to skip the PPC pages but I didn't want to do that.

Another challenge was that once the user had jumped through any hoops to make an offer, I’d never know much about them. I could see which country they came from and when they’d opened their account. But I still wouldn’t know their name, which city they came from or be able to converse authentically in order to know their business or needs.

It’s logical that marketplaces have to create this obscurity so that their platforms can’t be circumvented. In addition, I respect that a proxy offers certain buyers a level of protection from sellers (and vice-versa). However, for me, negotiating through a marketplace messaging system feels highly impersonal when compared to email or jumping on a call. I always felt that I was losing sales because of these barriers.
Most marketplace messaging systems are designed to streamline the negotiation into a ping-pong game focused on price discovery. Some potential buyers chose to exit negotiations early - and after that, there's no easy way to get back in touch with them.

There are some very good brokers on Afternic and Sedo - and they’re definitely worthy of the commission fee. They reach out directly to buyers and sellers to get deals closed. But I really wanted to learn to negotiate for myself - and practice was the only way I’d get to do it. The majority of my sales on marketplaces didn't involve brokers.
For a while, I also had a gut feeling that the vast majority of sales were driven by organic traffic to each domain rather than as a result of marketplace search. I understand the importance of a domain being promoted in the registration path, but I wondered if I should be paying commissions on sales where the domain itself generated the lead. This made me want to explore if I could continue to make sales with my own landing pages.

Getting started…

I got going on Efty using the Bulk Upload tool and a CSV of my domains. I won’t go into details of how this is done, as I think the Efty team have some decent documentation covering this. It’s pretty painless. Once I’d got the domains indexed into Efty, I bulk changed all of the domains nameservers.

I chose not to use Efty for it’s custom marketplace, mainly because I didn’t think it would be useful. I’ve never focused on domainer-to-domainer sales... and I doubt that end-users really want to browse through my whole portfolio. Maybe it’s different for BrandBucket and marketplaces designed for discovery, but most of my domains don’t match that format. My transactions (so far) have been buyers reaching out to me for one specific domain - with no interest in the others.
For hypernames.co, I’d already set up a Wordpress site to redirect two dozen of my favourite domains. My Google Analytics data shows that most visitors only view one page per visit. (For anyone interested, the WP theme I'm using is Spaces by ThemeBeans.com).

For the Efty landers, I opted to use the Kiffer theme with a BIN (BuyItNow) and MakeOffer. I also enabled Escrow.com as my primary payment option. The BIN prices varied, but I set a blanket $500 minimum for MakeOffer. For reference, more than three-quarters of my inventory is priced between $2k and $5k - and my modal asking price is $4k.

I didn’t customise the page text or add logos as I knew the inventory was going to have a high churn rate. I also didn’t make proper use of the financial data that can be added to calculate renewals and portfolio profitability - as I already had this data in Excel and my accounting software.

Finally, I set up Google Analytics for the Efty landing pages, implementing a small hack to tidy up the pagename data: https://www.namepros.com/threads/efty-landers-and-google-analytics.1032187/#post-6732849

I left all of the domains listed on Afternic and Sedo, without FastTransfer or MLS activated. Both platforms had BIN with MakeOffer enabled.

Deal flow: turning inquiries into sales…

Here’s a breakdown of the 100 Make Offer inquiries that have come through so far…

42 of these are spam, abuse, very confused people and a few duplicate inquiries (people who submitted the form twice)

21 inquiries never got back to me after my initial reply (or two additional follow up emails)

25 negotiations didn't work out because my asking price exceeded the buyers budget, or they changed their mind during negotiations
12 have been converted into sales after negotiation

The total for completed sales came in just under $20k and at an average of $1667 each.
Excluding the 42 junk inquiries that I didn’t bother following up on, I had about 7 or 8 actual inquiries per month on a portfolio of 1300-1600 domains. My overall success rate for turning those inquiries into sales was about 20% (12 out of 58 inquiries) - which leaves plenty of room for improvement!

On sales, there was a mixture of who paid the Escrow fees (buyer/seller/split). Through a marketplace, I might not have been able to close all of the sales - and if I had, there would have been around 15% in commission. If I continue to trade at the same pace, I'll have saved almost $5k in commissions at the point my Efty plan comes up for it’s annual renewal.

Over the last eight months, I also had 14 BIN Escrow transactions from the Efty landers and not a single one of these went onwards to make payment. Most look like spam or people that don’t understand what they’re doing

Here's a bunch of things I learnt and other observations:

After changing to Efty landing pages, Afternic continued to produce sales but offers/sales via Sedo came to a grinding halt. I finally clocked in one sale on Sedo almost seven months later in December 2018, but unsurprisingly, it was a domain that I’d accidentally missed out when applying Efty nameservers.
It’s a cold reality that only 3% of the inventory even received an offer inquiry through the Efty lander in eight months. Even more important was that only 1-in-5 of those inquiries turned into a sale. I may reduce prices to see if I can increase sales but I'm not sure that lower prices always means more profit. Yield can be a tricky thing to tweak with accuracy on a portfolio with high inventory churn. I’m optimistic that in the future, a smaller (but higher quality) portfolio could receive landing page inquiries on 5% of inventory per year and convert around half of all legitimate inquiries into sales. Including sales coming through email, marketplaces and registration paths, I could have a 3% sell-through-rate across all channels.
Having a price on a domain gives a better chance to sell it (especially below $10k). It sets a starting point for negotiation and makes it easier for interested parties to make a reasonable offer.
At times I was rigid with my acceptance price (vs. the asking price). The completed sales then had to compensate for all the times I said ‘no thanks’. For every two offers I rejected at 20% of the asking price (BIN), I needed to close at least one at 60% of the asking price. Obviously, this also varies on a domain by domain basis. And several other factors come into play, such as the number of offers the domain has had in the past and the price that has been paid for it.
I've realised that a lot of potential buyers confuse the minimum asking price with the lowest price that I'll accept. When I had a $500 minimum set across all domains, it made negotiations harder because the potential buyer had anchored themselves to $500 from the outset. I found myself negotiating upwards from $500, rather than downwards from the asking price.
I recently left the Minimum Price field blank… this not only increased the volume of inquiries, but surprisingly, many of the starting offers increased towards 25% of the asking price. The change did bring in a few more lowball offers, but I don’t mind that.
In the future, I also plan to test out the Samir theme, which removes the MakeOffer amount option and replaces it with a contact form.
Of the 21 inquiries that never replied to me, several were offers I had accepted without countering. There’s something that makes buyers uncomfortable when their first offer is accepted. It could be a feeling that they haven’t completed the process of price discovery and/or feel regret that they may have gotten away with offering less. The absence of any resistance somehow detracts from the psychological value attached to the domain itself.
For offers that were close to my target price (considering accepting), my counter offer strategy evolved into a conditional acceptance: I’m happy to take an offer that’s good, but not perfect, and in return I want the buyer to reciprocate by covering the Escrow fees.
I think this was more successful because it shows a reasonable give-and-take towards a win-win for both sides.
It’s worth following up with an email when you don't hear back from someone. Three of the twelve sales were as a result of a second (sent three days later) or third follow up email (sent seven to ten days after the second). I normally stop after three emails.
I suspect that a large portion of those that don't reply are also disheartened by a counter offer. Perhaps they expected that the minimum price was the price they’d be able to pay. Going forward, I might start using the phone more often where a contact number is provided. Maybe I’ll have one initial reply, a follow up email and then try to call.
I closed one sale from a potential buyer who made an offer but didn’t understand the verification email that was sent to their inbox. I eventually disabled email verification (for Make Offer) but if you have it enabled, it’s still worthwhile reaching out to unconfirmed inquiries.
It’s handy to set up a unique email address to be displayed on the Efty Landers and Efty marketplace. I had thirteen other inquiries that came direct to my email inbox (not through the form on the Efty lander). I’m pretty confident that ten of those got in touch with me through the email address written on each landing page. For three, I couldn’t prove this - so they’ve been omitted from the data.
I use the ‘Labels’ function in Gmail as metadata labels on email threads, to identify successful and unsuccessful negotiations. I then go back periodically and read through my emails to review the words/language that I use and tweak my templated responses.
Reviewing old negotiations sound like watching paint dry - but I can often spot patterns and inconsistencies that lead to underperformance or failure. It’s not a perfect science but I like to think that it’s the domainers equivalent of a sports player reviewing/ analysing their historical games.

Onwards and upwards...

Ultimately, having control over the landing pages also meant having control over the whole sale process. For me that means:

Being able to build relationships with buyers during negotiation to seek out win-win scenarios
Having the flexibility to choose a variety of payment mechanisms (bank-transfer, escrow, PayPal, Stripe, crypto, barter, etc)
Owning customer service and support - and taking pride in making every transaction as smooth as possible for the buyer.
Following up with buyers (post-sale/completion) to get feedback and ask why they chose that particular domain or went with that ccTLD. If a buyer hasn't mentioned during negotiations, I ask what they plan to do with the domain - is it for a marketing campaign, a defensive purchase or maybe a rebrand? Once the sale has completed, buyers are much more willing to talk openly and it's a great opportunity to learn about what drives demand.
Hearing back from a potential buyer after a period of time, and being able to reference their previous negotiation history... or carry on the same email thread.
Having access to richer data for each domain (traffic, geo, inquiries etc) - which is useful as an input when considering which domains to drop/renew.

As a final note, I appreciate that managing the inquiry, sales and transaction processes creates an additional burden on the seller but I had the time to invest and have really enjoyed learning. Aside from the commission savings, the other advantages (transparency, autonomy and customisation) outweighed the downsides.
Becoming comfortable negotiating in the low four-figure range is like training on a regular basis to prepare for the bigger negotiations.

It’s always worth repeating that I work as an independent, without agenda or any other hidden motive. I’m not an expert or a seasoned professional. I have no affiliation with any blogger, registry, marketplace, registrar or vendor. I trade domains part-time, to learn about myself and to earn a little extra money for my family. If it’s not fun for you, don’t do it. I try to share my experiences on NP with high transparency - so that we can learn from each other.
And whilst I think that the Efty team is awesome, I have written about their product without prompt, permission or approval. Nonetheless, as a happy customer, I hope I get to buy them a beer at NamesCon to say thank you

As always, I’m looking to hear from your experiences too. Feel free to comment or ask me anything below.

----

Links below to the 12 referenced sales...

https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-622#post-6787370
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-626#post-6800600
https://www.namepros.com/threads/gaya-dot-co-sold-for-2500.1095910/
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-637#post-6863667
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-644#post-6899589
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-669#post-7017318

Nikul Sanghvi · Dec 27, 2017

AbdulBasit.com said:
Thanks @Nikul Sanghvi for sharing your experience and being so open. Very few people likes to share as much as possible with others to learn and understand.

Would you like to share how many total domains you got?
Also which 3 domains you think are the best in your portfolio?

Thank you

- I have around 1200 domains in total at the moment, but only a quarter of these are my core portfolio.
- My three showcase domains would be:

Data /co
Driverless /com
Wave /co

boker · Dec 23, 2017

Great post Nikul, thanks for taking the time to post everything. I need to say that after two-three first years of almost no sales, you need a lot of nerve to invest even more and even to acquire a 10k domain, I would not have had the courage. I know you have mentioned the xxxxxx sale, but it's not something you can count on it or even if you know that it will come, you can't know if it will take 2 years or 10 years. I'm curious if you would have been on profit without the big sale?
I have choosed another way in domaining. I have started just over two years ago, in my first year I've made high xxxx profit and my second year around 23k profit. All my acquisitions were handreg's, actually my average cost of acquisition was around 3$, so I have managed to make a nice profit all around. In my second year I've made 23 end user sales and around 350 resellers sales. My acquisitions are not following the rules of the basic domainer, but I've managed to find a way to be profitable. I will adapt my future strategy to raise my revenue and profits, but my main target will be to be make a profit year by year.

Nikul Sanghvi · Dec 23, 2017

Amzymayor said:
Can't think of a better read than this. Thank you! But do you think you need to have a deep pocket to make it in domaining?

Thank you

I don't think deep pockets are a prerequisite to making profits in domaining - but it does let you make more mistakes without hitting financial hardship.

If you have deep pockets and can invest through people with knowledge (such as trusted brokers), you have an advantage but aren't necessarily a 'domainer'.

If you have a good level of knowledge and deep pockets, you're likely to be at an advantage in terms of probability but it doesn't directly equate to success.

Start where you are, use what you have and do what you can.

DrJacoby said:
Excellent post!

I'm just starting out (purchased my first domain intended for flipping yesterday), so your advice is highly appreciated.

Where would you recommend that I try to sell my domain (CigarMaking.com)? Flippa, GoDaddy, NamePros, or any other place?

Thanks!

Thanks!

The best way to learn is to explore and try as many of the different marketplaces as you can. Just be careful not to simultaneously sell the domain in multiple places.

Nikul Sanghvi · Jan 8, 2019

Thank you @Jv1999 @boker @vravis9 @domains21 @frank-germany @Kenny @lolwarrior @Doron Vermaat @AbdulBasit.com @Dave @DomainBarracksRob @Kazzia and everyone else!

Writing is a slow and difficult process for me... but the feedback always motivates me to keep going

Doron Vermaat said:
I assume you're still using the old Escrow.com integration. We recently integrated with Escrow Pay and one of the many improvements is that this integration completely eliminates these deadbeat transactions that sometimes were initiated on the previous set-up.

Good point Doron - that's correct, those were all from the old Escrow integration. I swapped across to Escrow Pay last month and haven't had any BINs since then. Escrow Pay also looks slicker and a lot more buyer-friendly.

Kate · Dec 23, 2017

Nikul Sanghvi said:
In hindsight, the secret ingredient to getting the six-figure price was simple but partly non-intentional - I genuinely did not want to sell the name at that time.

Same experience here. My best sales were names I was not motivated to sell. The buyer had to make an offer I couldn't refuse.

Nikul Sanghvi · Jan 27, 2018

briguy said:
My question is (cause of your (dot)co portfolio)..
Do you think it is a good strategy to buy a (dot)co's because the (dot)com's was registered and popular?

If you're buying for the .com alone, then I'd say no... especially if the .com is a specific brand rather than a generic keyword(s).

I try to evaluate based on a slightly broader criteria:
- the keyword/phrase is used by a number of companies (as many as possible)
- the same domain is also registered in at least 12 other core extensions
- most of the registered tlds are developed sites
- a quick search on Google provides at least 10 other brands using appendages to supplement the keyword on a .com (example.co > exampleglobal.com, examplecorp.com, examplesolutions.com etc)

I have however found that in addition to above, for the .co to sell easily, the .com equivalent must either be a fully operational business or priced into six-figures.

Doron Vermaat · Jan 6, 2020

Nikul Sanghvi said:
Thank you to those of you that have been following this thread and welcome to anyone reading this AMA for the first time.

I’d had a few people reach out to ask for an update, so I wanted to give a general overview and talk about how 2019 performed. I’ll also try to connect back to the journey so far, to give context where I can...

So without further ado, here’s a summary of my trading last year:

$108k of total revenue

Minus $11k in commissions and fees

Minus $35k renewals, further registrations and acquisitions

Net approx $60k (before tax)

48 sales in total (an average of 4 per month)

25 sales via DAN ($36k) - mostly MakeOffer

9 sales Afternic ($41k) - mostly BIN

Remaining sales were inbound via Efty, Emails and DomainAgents... one via outbound email

Extensions: 43 .CO, three .COM, one .UK and one .EU

Average sales price of $2252

Average hold time per domain sold was 21 months (at least 1 renewal)

Average purchase price of domains sold was $78 (removing a $2k outlier, this drops to $35)

Average portfolio size around 1200 over the year, now at 1500

Annual sell-through rate at 4%

Below, you can see how 2019 stacks up against the previous two years:

Let's dig into each year in a bit more detail...

2017 and earlier

Prior to 2017, my portfolio size was only a few hundred domains. I hadn’t bought many domains but my acquisition costs per domain had also been higher than at present (mostly between $500 and $10k).
My spend across 2015 and 2016 had been around $175k, but I hadn’t really been buying smart.

(You can read more about 2009 to 2017 here: https://www.namepros.com/threads/almost-a-decade-of-domaining.1056328/)

Despite the heavy spending on acquisitions, I hadn’t had a single sale in the previous year (2016).
I didn’t want that to happen again, so I looked for something that would create some regular cash flow, but with lower upfront risk. I had the bandwidth, so also didn’t mind putting in any additional hours. Having had some success with .CO domains, I decided to try out bulk buying using discount coupons.

Moneyman[.co] was one of the few hundred .COs bought at $1.50 each. It was bought in July 2017 and sold a few months later in October.

The image below shows 2017 broken out further (ordered by sale date, descending):

2018

By mid-2018, the discounted .CO registrations had continued to make a steady stream of sales. I'd spent $9.5k spent on 1262 .CO handregs and had already reached around $37k in sales and a profit of $23k.

(You can read more about this here: https://www.namepros.com/threads/almost-a-decade-of-domaining.1056328/page-3#post-6786857)

That experiment went on to generate an additional $41k of sales without any additional spend, bringing the total revenue to $78k. Taking away commissions, the process yielded $68k of pre-tax profit from the initial investment of $9.5k.

September came quickly, and Neustar killed off the discount strategy with the introduction of the premium tiers on .CO. By then, I wasn’t registering .co in volume anymore but it suddenly became a lot harder to buy good quality .CO domains on the cheap.

2019

By early 2019, my portfolio had reduced from a peak of 1700 down towards 1000. By the middle of the year, I’d reached around 800 domains.

I had also started buying the premium tier .CO to test the water. By April 2019, I’d spent around $6k across 50 domains at $120(ish) each… of those, only three have sold so far, generating $13k in total. It was still profitable, but the pricing tiers had seriously shifted the margins.

I continued to test out discounts for .CO but they had been limited to only non-premium domains.
Since the premium tiers kicked in, I’ve registered around 600 .CO domains between $3 and $7 using discount codes. Out of those, I’ve only sold 1 so far! So although it’s still possible to buy hundreds or thousands of .CO for a few dollars each, their quality has drastically reduced compared to doing the same in 2017… and this is reflected in the overall sell-through rate.

My sales volume in 2019 was higher than 2018 but I also saw a dip in average sale price.

In 2018, it was $2670 - removing the outlier $19k sale brings it down to $2144.

In 2019, it was $2252 - removing the $15k sale and $9k sale brings it to $1809.

This was partly deliberate: after analysing the deals I couldn't close or lost in 2018 due to countering too high or sticking to a BIN, I knew I was leaving money on the table. In 2019, I started to lock in more sales and accept slightly lower offers - especially for inventory that I wouldn't miss.

HOLDING DURATION

Below you can see holding time (Number of Months) for the 90+ domains sold over the last three years.

Half of all domains sold were held for less than a year.

80% of all domains sold were held for just under two years.

When I split this out showing sales grouped by year, it’s clear that sales in 2019 primarily originated from purchases in 2017 and 2018.

WHERE DID SALES ORIGINATE FROM?

The image below shows revenue (2018 and 2019) from the four main sources for me. I also had sales from inbound emails, DomainAgents and one from outbound, but removed them for a cleaner overview.

In 2017, I was using Sedo landers across most of my domains. And in May 2018, I began using Efty servers. I detailed my experiences of the first 100 inquiries here: https://www.namepros.com/threads/almost-a-decade-of-domaining.1056328/page-4#post-7053359

Almost a year later, I started testing out Undeveloped (now DAN.com) landers too. I think they perform very similarly to Efty, but take up less of my time in negotiations and the sale process. In return, you lose the information about the potential buyer that comes through Efty (such as telephone and email) - and the ability to engage in a deeper dialogue through email and phone.
It’s an interesting trade-off - but my time commitment to domaining had started to reduce, so it was worth it for me.

Another interesting thing to note: after switching to DAN, I started to see more regular sales coming from Afternic. Using Google Analytics, I can see that at least three of the transactions on Afternic occurred immediately after a buyer had spent several minutes looking at the DAN lander. In all three cases, the buyer chose to pay a higher price for the safety of GoDaddy/Afternic (or other syndicated venue), instead of buying through DAN. I don’t think this is alarming, but does show the advantage of having a domain listed in multiple places.

SALES MULTIPLES

Lastly, a quick take on sales multiples - comparing the purchase price against the final sale price.

Below are all of the sales across the last three years... I had to plot this out using logarithmic scale for clarity.
The X-axis shows the purchase price. The Y-axis shows the multiple at which it sold (5x, 10x, 100x etc).
In top left for example, you can see Moneyman bought for $1.50 and sold for $1600.
In the bottom-right corner, you can see data dot science - which I bought for $12k and sold for $12.5k.

In the past, I’ve tried to use a tiered structure based on the acquisition price - https://twitter.com/hypernames/status/1122780585125130245

The table in that link is outdated and needs some updating, but I’ve tried to show how these groupings manifest on the graph below:

You can get a rough idea here…

The $1 to $6 promo codes sold mostly between 100x and 1000x

The $9 and $10 handregs sold between 50x and 500x

The three sales of premium tier .CO registrations were roughly 10x to 75x

All purchases that I’d made at $1k or more were generally grouped at 5x or less

Keep in mind, that most of these sales came through make offer. So whilst they were sold within those ranges, they were priced above those ranges to allow room for movement.

There’s a lot of mess outside of these neat rings - so they’re not perfect as groups and there are always outliers. I don’t pick many names to be priced wildly outside of these ranges - but there are always a few in play. You can’t rely on them, but if they sell, it’s a great outcome. I tend to pick names that I really like and then stick a solid BIN on them or hold firm if an offer comes. Qrypt, Qubit and Tempus are three examples of this working with a higher price which is outside the normal range.

WRAP UP

I’d love to conclude with some type of insight into what I’ll be buying over the next few years… but in all honesty, I don’t know at the moment.
Premium .COM domains continue to accelerate in price and demand - getting further out of reach from the vast majority of small businesses and startups. In the void, there’s still demand from these startups and SMEs for alternatives like .IO and.CO, but a wider set of competing extensions (like .AI) and investors now vie for this space.

Registries are also getting smarter, and continue to eat-into the margin that previously existed solely for domainers. The .CO registry’s premium tiers continue to evolve, and break away more frequently from the entry point prices that they’ve used until now. The lines between premium and non-premium have been pushed down so low, that the non-premiums are barely worth the risk, even at $3 each.
These shifts will drive two important elements of my strategy going forward. Firstly, I'd like to focus back on quality over quantity - and secondly, the obvious need for me to diversify my portfolio.

Thank you for reading! Wishing everyone health, happiness and plenty of sales in the year ahead!
As always, feel free to comment or ask me anything below

LINKS TO REPORTED SALES THREAD...

Sales thread references (2017):
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-516#post-6211749
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-536#post-6334962
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-543#post-6378438
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-547#post-6395575
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-567#post-6484675

Sales thread references (2018):
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-582#post-6544938
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-586#post-6566162
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-615#post-6742809
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-622#post-6787370
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-626#post-6800600
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-628#post-6815419
https://www.namepros.com/threads/gaya-dot-co-sold-for-2500.1095910/
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-637#post-6863667
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-643#post-6899589
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-669#post-7017318

Sales thread references (2019):
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-692#post-7137179
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-698#post-7168378
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-706#post-7209959
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-713#post-7252044
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-725#post-7311390
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-736#post-7376284
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-749#post-7447361
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-756#post-7500272
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-765#post-7572842

Best NP post of the year! Thank you for sharing with us Nikul.

Nikul Sanghvi · Mar 15, 2021

Thank you all for your support on this thread. I'm ending it here for now, but I'm truly grateful to everyone who read and participated. Thank you

---

Part One: The Journey So Far... (Dec 2017)
Part Two: Experimenting with expired .CO domains (Jun 2018)
Part Three: Efty landing pages and deal flow (Jan 2019)
Part Four: 2019 Trading Update (Jan 2020)
Part Five: 2020 Trading Update (Jan 2021)

DomainDepot · Dec 23, 2017

This was an excellent read. Really great stuff. Thanks for taking the time.

boker · Dec 23, 2017

Nikul Sanghvi said:
Thank you for asking me the questions on the sales thread!

It's hard to tell where I'd be without that first big sale, because it catalysed my interest in domains and as a result, I ramped up my time investment (reading online) from a few hours a month to an hour a day.

It was a very high risk purchase but it was very different to any other domain I'd bought:
- It was the first name that I'd dedicated at least 30+ hours of research to, and potentially the most research I've done on any purchase to date...
- It was a field that was connected to my day job at the time... so I had an insiders view into the usage of the term evolving at a fast pace. I also had a network that could explain to me what the term represented and how important it was going to be in the future.
- I had reached a point of frustration where I had the capital available and had also started making small profits in domaining. I was really frustrated at the pace of progress up until that point, so that year was an attempt to ramp up the investment at a point where I felt the risk had reduced slightly (compared to the previous years).

I'm glad you've found a way of domaining that works for you - and thank you for sharing your experience. It's a great example that shows that there any multiple methods to make money from domains. It's an incredible achievement within your first two years so you're on a great trajectory!
It would be hard for me to find the time to complete 370+ sales a year (one a day). My target is only one or two sales per month - so I'm working at slightly higher price point to balance out the smaller transaction volumes.

It's very time consuming, so it's not the best way to do it, but I've invested my cash in different online niches and give up to my contracts from last year and also this year I've started something offline, so I needed liquidity on a daily basis, moving cash from one area to another. The big plan is that at one point in time all of them will produce enough revenue to be independent from each other and to be able to make some bigger investments. Also, spreading the investments in multiple industries should protect me in case if some particular industry will crash.

Nikul Sanghvi · Dec 23, 2017

boker said:
Great post Nikul, thanks for taking the time to post everything. I need to say that after two-three first years of almost no sales, you need a lot of nerve to invest even more and even to acquire a 10k domain, I would not have had the courage. I know you have mentioned the xxxxxx sale, but it's not something you can count on it or even if you know that it will come, you can't know if it will take 2 years or 10 years. I'm curious if you would have been on profit without the big sale?
I have choosed another way in domaining. I have started just over two years ago, in my first year I've made high xxxx profit and my second year around 23k profit. All my acquisitions were handreg's, actually my average cost of acquisition was around 3$, so I have managed to make a nice profit all around. In my second year I've made 23 end user sales and around 350 resellers sales. My acquisitions are not following the rules of the basic domainer, but I've managed to find a way to be profitable. I will adapt my future strategy to raise my revenue and profits, but my main target will be to be make a profit year by year.

Thank you for asking me the questions on the sales thread!

It's hard to tell where I'd be without that first big sale, because it catalysed my interest in domains and as a result, I ramped up my time investment (reading online) from a few hours a month to an hour a day.

It was a very high risk purchase but it was very different to any other domain I'd bought:
- It was the first name that I'd dedicated at least 30+ hours of research to, and potentially the most research I've done on any purchase to date...
- It was a field that was connected to my day job at the time... so I had an insiders view into the usage of the term evolving at a fast pace. I also had a network that could explain to me what the term represented and how important it was going to be in the future.
- I had reached a point of frustration where I had the capital available and had also started making small profits in domaining. I was really frustrated at the pace of progress up until that point, so that year was an attempt to ramp up the investment at a point where I felt the risk had reduced slightly (compared to the previous years).

I'm glad you've found a way of domaining that works for you - and thank you for sharing your experience. It's a great example that shows that there any multiple methods to make money from domains. It's an incredible achievement within your first two years so you're on a great trajectory!
It would be hard for me to find the time to complete 370+ sales a year (one a day). My target is only one or two sales per month - so I'm working at slightly higher price point to balance out the smaller transaction volumes.

Nikul Sanghvi · Jan 6, 2020

Ntmt said:
Thanks for your detailed summary of .co experiment, I was one who waited for this post.
A couple of questions from me:

1. I noticed you had no sales on Sedo at all in 2019. Do you have any suggestion about the reason of this?

2. Your sales at Dan started only after your switched to their servers. We're your portfolio listed at Dan before this switch?

3. Do you plan to invest in premium .co?

4. Do you see any value in non-english single word .co? What about surnames and given names in .co?

Thank you! Answers below:

1. I had nearly all domains listed on Sedo in 2019 but did not use Sedo landers. Without the landers, Sedo doesn't produce any sales for me.

2. I didn't have any domains on DAN until I started using their landers.

3. I have been buying some premium .CO domains but as mentioned in the post, they haven't produced the return I expected for the higher price point.

4. Yes, I do value in some non-English words and certain names - but it really depends on the word and the surname. If it's a surname that has a range of businesses (end-users) using the same name, then yes. The key focus across most of my buying has been looking for domains that have a decent size pool of commercial end-users who might be interested.

Nikul Sanghvi · Jan 6, 2020

wwwweb said:
Hands down one of the portfolio analysis, and sales reports I have ever seen.

Are you putting 100% of your profits back in, including renewals, or are you taking a % off the table?

Thank you. Over the last three years, I've been pulling most of the profits out of the business for income.
It has severely limited the growth of the business but has also allowed me to spend a lot more time at home with my kids.

Having less spending power forced me to be more frugal and resourceful. But being dependant on domaining income also impacted my style of domaining. I became much more eager to close sales and accept offers, so there was a visible impact on my average sale price.

Nonetheless, it was worth it. Even if I never make a single more dollar in domaining, I'll be forever thankful for that the autonomy that domains gave me over those years.

I'll be slowly getting back into work and spending less time on domains but I see that as a good thing. Firstly, I think it will push me to make fewer but larger investments. Secondly, I'll be leaving more money in the business to reinvest. And lastly, I'm hoping that not needing the sale proceeds will put me in a better negotiating position.

MapleDots · Dec 24, 2017

@Nikul Sanghvi

Loved the read, loved the honesty and am truly happy you are making a profit.
Sounded like I was reading my biography because I started in 2000 and then again in earnest in 2002. Took 10 years to really start making any serious money.

maxtorz · Jan 7, 2020

Very in depth stats! Thank you.
I am grateful to have sold ALL my short .COs and .MEs in the Chinese bubble years ago.

I did a test of 100 x $1 promo handregs .co.uk in 2018 and sold 3 on DAN in 2019... best ROI ever with 3% sellthru rate, all $xxxx sales.
.com however is still the bread and butter for me and 99% focused on that.

1Darko · Jun 30, 2018

Nikul Sanghvi said:
Thank you to everyone who has read, shared, commented or got in touch with me about the original post in this thread. The response from NP readers was a major motivation for writing this update. I wanted to follow up with a deeper dive into one of the specific things that I had mentioned back in December 2017:

[Make a cup of tea or coffee first, the approx reading time is 25 to 30 mins ]

A little over a year ago (in May 2017), I began hand-registering deleted .CO domains in order to build up a sub-portfolio. The general hypothesis was that some of these deleted domains were undervalued and could be resold for profit. I filtered the domains using some well known tools, registered a few each day and aimed to sell at least one a month to generate some cash flow.
I didn’t expect to sell more than 1% of the total portfolio over the whole year, so I knew the domains had to be priced in a way that would allow for break-even (at minimum).

The portfolio was tracked and measured over the course of the year. By the end of April 2018 (at peak-inventory), it consisted of 1262 .co domains at a total cost of $9.5k. As of today, (time of writing = end of June 2018), the portfolio has had 19 sales, totalling almost $38k. After deducting the registration costs and marketplace commissions, the portfolio has made $23k of profit to date.

I wanted to share some details about the methodology and results, for two main reasons. Firstly, so that my posts on the sales thread would have some context, and secondly, so that others could learn from the process. (Please head up to the top of this thread if you haven’t read it before!).

Getting started...

The first step was creating an account on ExpiredDomains.net. If you haven’t used this tool before, I’d strongly recommend signing up and having a play. I used the ExpiredDomains search tool to create a filter looking at the daily deletes. I tried a variety of filters in the first few months, but in the end, I settled with something very simple. The three filters I use are:

CCTLD = .CO

Social Namecheck = Twitter

Name in selected TLD is registered = .com plus 5 others.

The ‘CCTLD = .CO’ is obvious, we only want to see deleted domains for .CO

The social namecheck for Twitter is useful because I’ve noticed that if the domain doesn’t have a matching twitter handle, there is unlikely to be a business that is actively using that name. It also automatically eliminates domains with hyphens or domains over 15 characters.

Lastly, for ‘Name in selected TLD is registered’, I was searching for the domain to be taken in other TLDs. I always selected .COM in the filter because for an end user, buying a .CO is nearly always an alternate option to buying the same domain in .COM.
If the domain isn’t already taken in .COM, I think it’s pointless to register the .CO equivalent.
I also found a specific selection of other TLDs that showed me that the deleted .CO domain could have a higher propensity to sell. I don’t want to reveal exactly which ones because it’s not the purpose of this post to give a specific recipe. It also eats into whatever tiny bit of competitive edge that I'll have remaining once this is posted! What I can say is that all of the other boxes I tick are also ccTLDs.

Aside from the filters, I used to sort the presented list based on ‘SG’ (global searches) but I quickly found this metric to be unreliable as it displayed zero for a lot of domains. I started sorting by ‘TLDs Reg’ which shows the number of TLDs the domain is registered in. For me, it’s the simplest way to give a ball-park estimate that there is existing demand for the domain. If the domain is registered in my six selected TLDs, along with 20 others, it’s a great signal. This is one of the reasons I’ve found it easier to sell hand registered .CO rather than hand-registered .COM. It’s hard to pay $9 for a .COM that is registered in 29 other extensions. However, it’s still possible to find a .CO that gets deleted and is already taken in 25 to 31 other extensions. Potentially, that’s a bad sign - and the counter-argument might be that the reason it gets dropped is because it is perceived to have no value.

I found this metric of ‘TLDs Reg’ to be a north-star metric. In the absence of any other data, it reflected the sale-potential better than any alternate metric. It fits in this context, because I was not focusing on any other specific aspects of the domain - such as keyword volumes, ppc competition or age. The filter simply looked for domains that were taken in many of the other most popular extensions.

The drop for deleted .co domains happens at around 18:04 GMT or 19:04 BST (British Summer Time). Once the list became available, I’d quickly hand-reg one or two (near the top of the list) based on gut feel. For the others, I would:

Search the domain (without .co on the end) on LinkedIn, filtering for ‘Companies’ only. Depending on how many companies came up in that list on LinkedIn, I’d either register immediately, or dig deeper. When digging deeper, I open out at least a dozen companies listed on the first page. I ignore any companies that don’t have a logo and I also tend to exclude companies with only 1 employee. It’s easy to look for potential buyers by expanding the company profile and looking at their existing domains in use. Here’s the opportunity to spot the upgrade paths. Could someone with example-group.com upgrade to example.co? I’ll talk about outbound later, but this information is something that I didn’t fully utilise.

I also search quickly for the domain (again, without .co on the end) on Twitter. If I could see under the ‘people’ tab, a handful of businesses using the name, it was a good sign. I’ve found over time that businesses who are active (or have presence) on social media are more likely to invest in domains.

Lastly, for many, I would run a quick search on Google and Wikipedia.

Here are a few more notes about how I choose what types of .CO to buy/register: https://www.namepros.com/threads/wh...ce-for-two-words-domain.1063706/#post-6557582

(For more expensive domains, I have a deeper research process. I have detailed an example here: https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-567#post-6484675)

If everything looked ok using the search criteria above, I would register the domain. In summary, I was looking for business names that already have a high level of usage. Firstly, because it provides an immediate variety of potential buyers. Secondly, if the business name is already in frequent usage, it’s likely to be used again by newly formed businesses. That last point is counter-intuitive, but the logic is that, if there are already 50 businesses called example, it’s likely to be a popular choice. If there is only one business called example2, it’s not a popular business name and the domain is unlikely to find a buyer. I think it’s important to clarify at this stage, that the goal was (and still is) never to seek out unique domains that are in use by a specific business. I made every effort I could to avoid specific trademarks or unique domains that could only ever have had one buyer. Every domain purchased needed at least a dozen potential end-users.

I had set aside around $15k at the start of the process, but I didn’t end up using all of it over the first 12 months. Here’s the breakdown of my registrations:

The first spike in July 2017 was a Name.com Happy Hour, followed by the .CO birthday special a week later. The last spike in March 2018 was a $4.88 Namecheap price promotion that lasted almost a week.

Below is the breakdown of the registration costs consolidated by month:

I started buying in early May, but I was distracted by new arrivals into my family. On the days where I was active, I found that my filters weren’t giving me the right types of domains. On other days, I was searching several hours after the initial ‘drop’, but many of the good names had already been taken. In the first few months, there wasn’t a daily discipline. On average, I ended up searching ExpiredDomains only once or twice a week on average.
It wasn’t until October that I really started to ramp things up. Around 90% of my total spend was concentrated in the seven months between October 2017 and April 2018. This partly skews the results of this exercise but I still wanted to include those first five months in the data, as I was still learning and refining during that time.

Over the year, I used four different registrars: Namecheap, Uniregistry, Name.com and GoDaddy.
I bought at nine different price points (shown below) including six discount promotions.

These NP threads were really helpful and I’m grateful to everyone who flagged up a discount code or promotion: https://www.namepros.com/forums/domain-coupons-and-offers.358/

I spent around $1.8k during those promotions and picked up 431 domains at an average of $4.25. In hindsight, I underutilised many of them… especially the $1.50 (and less!) event for the .CO birthday celebration.
The remainder of the budget was mostly split between $8.88 at Namecheap and $9.88 at Uniregistry. Again, in hindsight, I could have constantly sought cheaper options but I found that spreading the domains across more registrars would complicate the management of them.

I also registered the vast majority of those Namecheap and Uniregistry domains via my mobile phone (approx 800 in total). The workflow was optimised for speed at time of deletion/release. I had the Namecheap or Uniregistry mobile app open on a phone. On my computer, I had ExpiredDomains open on one browser and LinkedIn on another (to allow faster tabbing between the two). The cost of this faster workflow was that it wasn’t always the cheapest. The gained advantage was the ability to register domains that would otherwise be gone within the first ten minutes of availability.

It’s worth noting here that this entire experiment is only made possible by the fact that the first year fees are subsidised for .CO domains. The full price at time of renewal (at the end of year one) is upwards of $23. Buying 1262 domains at that price would have cost $29k instead of $9.5k. If an investor doesn’t keep an eye on the ball when renewals come around (with auto-renew enabled), it can end up being a very expensive learning experience.

Turning registrations into sales...

After registering the domains, I set the nameservers to Sedo parking, and listed them on Sedo and Afternic. Some registrars allow you to set default nameservers that get applied to every new domain registered, instead of having to do it manually.
As expected, parking revenues from Sedo were negligible - and I never intended to make money from it. It’s a shame that Sedo nameservers resolve to parking landers, instead of directly to a sale page - but that’s a rant for another day.

For the first 10 months, I had the Sedo landers set to ‘Make Offer’ with an asking price listed, but no minimum offer. For Afternic, I’ve had a Buy It Now price (same as the asking price on Sedo) along with Make Offer and a minimum offer. In mid-May 2016, I also began using Efty landing pages, at which point I enabled BIN on my Sedo listings.

I didn’t use any advanced methodology on pricing - but instead used the number of potential end-users as a guiding metric. Most of the asking prices were set between $2000 and $5000. My floor price varied from domain to domain, but I tended to look for between 40% to 70% of the asking price during negotiation. I was inconsistent with this, which is something I’ll talk about later.
Throughout the year, I messed around with the numerical endings (00, 25, 49, 50, 75, 88, 98 and 99) but found little conclusive evidence that one was vastly superior. The majority of the sales closed with 00 as an ending. I rarely ever found that any buyer negotiated without numbers rounded to the nearest hundred.

Out of 19 sales: four sold at BIN (Afternic), 11 with Make Offer on Sedo and the four most recent were private deals. I lost about 12 additional serious negotiations on Sedo because I was overly-aggressive, even when I should have accepted the opening offer. I also had three accepted offers where the buyer decided not to pay and disappeared.
There’s not a ‘right-way’ or perfect method for negotiations that I can share… or an answer for why some deals fail. Maybe some buyers back out because their offer is accepted too quickly - and they feel like they could have pushed harder. Others might have backed out because they hit a ceiling, and I mistakenly thought that they could keep going higher. It’s difficult to negotiate on some marketplaces because there is no direct relationship between the two parties.

Below are the domains for the 19 sales, shown against the month they sold in and the net proceeds (money in my account after commissions). All transactions are complete and paid for in full. Please respect the buyers and don’t write the domain names in the comments, to avoid search engine indexing.

The chart below shows a little bit more detail about the sale prices of each domain, along with the marketplace commission. The sales without any commissions against them were made privately. For non-marketplace transactions I used Escrow.com and most buyers covered the transaction fees.

The average gross sale price was $1994. After commissions, the average net price was $1728.
My mean purchase price was $7.71, so the average sale price was 259 times the average registration cost.

The average hold time between registration and sale was 107 days (roughly 4 months). The fastest sale was 8 days after registration and the longest was 298 days after registrations.

I didn’t have any sales from this portfolio for the first five months. If I include those months, my inventory sell through rate was 0.18% per month. Excluding those first five months, the monthly STR averages at 0.28%. That means that if I have 1000 domains, I can expect to sell roughly 2 or 3 domains per month. The sell-through-rate is important to understand, because it has a relationship with the pricing strategy.
If I only sell one domain out of 1000, that one domain has to pay for the cost of itself, along with the other 999. If each month I register 150 domains, than I have to sell at least one domain for a minimum of 150 times the average purchase price, in order to break even for that month. Or alternatively, I can sell two domains for 75 times the average purchase price, etc.

Even if there is a correlated relationship between price and STR, I don’t know if it can be classified as linear or causal. There is a dependance on demand for each individual domain (and demand will vary), rather than all domains performing as a uniform commodity. Reducing the pricing by half, will have an effect - but it may not exactly double the sales. Someone who has experimented with pricing at a greater scale will definitely have a better answer on this.

The mantra here is not ‘go big or go home’. Far from it. I’m not advocating that everyone go out and replicate scale or start registering thousands of domains each year. Scale is not the only option but it has a purpose when configured correctly. If an estimated monthly STR on a portfolio is 0.2%, there is only a probability to sell one domain out of 500. If the portfolio consists of only 100 domains instead of 500, and has the same monthly STR (0.2%), the probability changes to a sale of one domain every five months. This is assuming the quality of the portfolio remains a constant, but it’s an example to show how larger portfolios can generate greater numbers of sales on a regular basis. Super sized portfolios will also have greater probability to generate outliers which deviate wildly from the average ROI (eg. $10 handreg sells for $50k).

If a domainer accepts a strategy where only 2.5% of the inventory will sell annually, they must also accept that 975 out of 1000 domains will be losers. This goes against most common wisdom for traditional domain ‘investing’, but may be more appropriate when called domain ‘trading’. Or maybe it’s just semantics, and we just have to accept that there are a multitude of routes to make money in this industry. Either way, it’s hard letting go of these losers - so learning to prune a portfolio and drop the excess weight becomes a skill in itself.

To date, around 200 of the 1262 domains have expired. These were registrations from May and June a year ago. Each domain comes with a year of registration, so I still have up to 9 months of holding time for the remainder of the portfolio. Looking at the expected inventory count for each remaining month and multiplying it by the lower of the two sell-through-rates (0.18%), gives me a projection for potential upcoming sales. Without considering other influencing factors, I forecast that I’ll have another 12 sales before the last domain expires or comes up for renewal. If I was to continue to achieve an average sale price of $2k per domain, that would be another $24k of sales generated by this portfolio. (I’ll try to follow up in April 2019 to see whether the actual outcome was close or completely different!).

There's always room for improvement...

No regrets - but there are things that could have been done better, and some that can still be improved.

The search methods and filters that I use on ExpiredDomains could do with refinement. I have only just scratched the surface in terms of functionality that the tool offers, and some of the untested filters could improve the quality of the registrations. Spending time to learn and understand how a tool works will always reap dividends.

I also only listed the domains on Sedo and Afternic, and I realise that there are many other marketplaces that were ignored, including Uniregistry and Undeveloped. I also sometimes took a few days before listing domains on Sedo... because I was busy or forgetful. Some domains weren’t listed on Afternic until after a month of owning them. Those delays reduce the overall opportunity for the domain to be seen and bought.

There is greater opportunity to explore pricing, both in terms of floors and ceilings. I’d be more interested to explore the lower bounds, by bringing the domains into the $1000 to $2500 range. If I had more time, I would also like a sliding system where the pricing has some form of decay rate, such as a quarterly half-life (3 months at $6000, then 3 months at $3000, then 3 months at $1500 etc.)

On review of every marketplace and email based negotiation over the last year, I can clearly see that I had an inconsistent negotiation pattern. When I had made one or two recent sales, I was overly aggressive during negotiations that followed. Where there hadn’t been any recent sales, I became fearful of drought and accepted significantly lower offers. A more constant yield might be achieved through a more consistent behaviour, driven less by emotion.

Before switching nearly all of the landing pages to Efty, I paid around 17% of total sales as commission to the various marketplaces ($5k in total). Switching landers to Efty earlier could have mitigated some of that.

I mentioned outbound marketing earlier in this post, but here’s is where I admit that it could have been executed with greater scale, effort and enthusiasm. I didn’t enjoy the process of reaching out to potential buyers, so I didn’t commit time to it. I think that a successful outbound strategy is essential for maximising yield from a large portfolio. I made lots of excuses to myself about why I didn’t do it, but it mainly came down to laziness.

The final frontier, would be automating the buying and listing process, using a combination of APIs and some CRON jobs. But this is way beyond my skill set. Without the human touch, I would guess you’d also need a large budget to deal with any mistakes that the system makes. Unlike financial algorithms or stock trading-strategies, it’s hard to test a setup like this in a simulated environment.

Wrapping up and other stuff worth mentioning...

I posted this here in the AMA because I wanted transparency. I was also worried that if I created a new thread, I’d try to come up with a clickbait title. This post doesn’t warrant to be treated as a secret recipe or a get quick rich guide. Your own personal circumstances will be vastly different to mine. Your own experience and knowledge will also be different to my own. My appetite for risk-taking and ability to absorb that risk might be different to yours.

I started with an allocated budget and a rough plan in mind. I wouldn’t ever do anything like this on a credit card. I hope that nobody reading this thinks that’s even an option. Throughout the experiment, I had a ‘stop-loss’ in mind and knew that I would stop it if I sank below a particular amount. Knowing when to quit is sometimes more important than trying to win. Walking away intact with a manageable loss allows you to learn from mistakes and come back to fight another day.

Whilst I’ve tried to share as much as possible, keep in mind that this is a relatively small sample size of data. The main reason for measuring the performance of this test portfolio was that I needed a truth that I couldn’t hide from. It’s easy to look back after a while and make up a new narrative that fits the present needs. I didn’t want to lie to myself, and keep repeating a process where the true costs and true value were unknown.
I’d also place emphasis on keeping a simple journal throughout an exercise like this. It’s very difficult to reflect back and remember how things actually felt at the time. The financial profit isn’t always the ultimate scorecard.

As with everything, there is opportunity cost. I’ve spent roughly 315 hours across 210 days, and I expect to spend at least another 35 hours on this portfolio by the time the last domain expires. If I look at that another way, that’s 50 days at 7 hours per day (10 workings weeks!). That time could have been used working, learning new skills, exercising, relaxing and with family. That’s a genuine opportunity cost, even though it’s not an opportunity of capital.
The same financial investment might also have yielded a decent return from a single premium .com domain, within the same timeframe… without the time investment or grinding. Investing $10k in stock like Nvidia could have yielded 2.5x over the same period. The obvious trick with both of those examples is knowing which stock or which premium domain to buy... not so simple for most of us.
For comparison, when including the projected future sales and future time investment, the profit generated by the experiment works out at an hourly rate of $98/hour. That calculation has costs, commissions and corporations tax (20% in UK) already subtracted - but it does not exclude income tax.

I’ll probably still continue to look at .CO deletes, but without the same level of vigour as the last six months. I know that the game might change by the very nature of this blog post itself. This post could create more competition for those same deletes, but that’s ok. I might spend the next year by testing slightly higher upstream, with drops and backorders instead of deletes. I’ll also be using data from the experiment (offers and lander pageviews) to extend registration of approx 10% of the total inventory at the higher renewal price.

I place importance on documentation and administration but I’m sure that I make mistakes. I’ve excluded any sales or purchases that are not part of this .CO portfolio and I’ve also excluded any .CO purchases that I made (non-handregs). Also excluded are a dozen domains that I passed to others for free - family, friends, startups that I admire and companies in my business network. I also ended up returning three domains to previous owners (for free), each of whom had active businesses running on them and had let them expire for various reasons. (Two additional requests from previous owners were refused, because the domains were parked and not in commercial use).

Before I conclude, an essential disclaimer: I have my own particular choice-supportive bias with .CO because I’m heavily invested in it. Take everything written in this post with a large pinch of salt.
This test focused on .CO and the choice of extension will no doubt have had influence on the outcome. Having said that, the methodology isn’t specifically limited to .CO and could be opened out to other TLDs that have demand from end-users but are undervalued. I’m not suggesting that .CO is the most profitable TLD nor am I saying that any domainers should put all of their eggs into one extension (something I am guilty of myself). I’ve written openly about the pros and cons of .CO before here on NP: https://www.namepros.com/threads/dot-co-confusion.1033963/#post-6293060

It’s also worth stating that I have no affiliation with the .CO registry, any marketplace, any registrar mentioned or ExpiredDomains. I work as an independent, without agenda or any other hidden motive. I’m not an expert or a seasoned professional. I trade domains for fun, to learn about myself and to earn a little extra money for my family. If it’s not fun for you, don’t do it.

I wasn't competant enough to shorten this very long post, so a genuine thank you if you have read this far. Above anything else, this was a learning process for me. So as always, I’m looking to hear from your experiences too. Criticism and feedback are not only welcomed, but they are valued and greatly appreciated. Sticking with the AMA theme, feel free to ask me anything below.

Links to the NP sales thread for the sales mentioned (apart from the two most recent):

https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-547#post-6395575

https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-582#post-6544938

https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-615#post-6742809

https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-586#post-6566162

@Nikul Sanghvi Posts like this are the backbone of namepros! Thanks for your enthusiasm in sharing and reveiling your domaining path! You're on my hero list! Well done!

NamesNewbie · Dec 23, 2017

For a newbie that has been on a buying spree right after they entered this industry, your post is GOLD!

Nikul Sanghvi · Dec 28, 2017

smartwebby said:
Great post! Very well written!

Okay since you cant reveal the big one can you reveal a few of your key sales you can talk about with the prices you paid and what the final sale price was? Also holding period to reach the sale and number of turned down enquiries might help. Obviously there isn't logic in prices but might help someone understand better while pricing!

best,
Anita

Thank you

I've documented some of the sales for 2017 here on Namepros with extended notes but haven't done this for the earlier years:

https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-516#post-6212158
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-536#post-6334962
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-543#post-6378438
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-547#post-6395575
https://www.namepros.com/threads/report-completed-domain-name-sales-here.83628/page-567#post-6484675

Some of the notes also covered pricing, negotiation and buying:

Nikul Sanghvi said:
A note about pricing strategy...
For many years, I used 'Make Offer' with no price on all my domains, waiting for an incoming number. It was a subconscious safety-blanket because I didn't know how to value/price my own inventory.
This always resulted in lowballs on Sedo. And when I received emails via whois asking 'how much?', I would reply with some variant of 'you make an offer'. This method yielded fewer replies, so possibly it was a point of friction for potential buyers whom felt uncomfortable saying their number first or maybe even didn't know where to start.

This year, I've been making much more effort to clearly price my domains - regardless of whether they're set to Make Offer or Buy It Now.
With a guide price, it has become easier to communicate clearly with potential buyers and sets a starting point for negotiation. A lot of buyers are super busy people, so the last thing I want to do is waste their time playing 'you-go-first'.
I now have sales prices on most domains based on a combination of research and gut feel. Alongside this, I have a constantly evolving excel sheet with private targets / acceptable exit-points.
I'm going for the moon on a few, ambitious on most and slightly-above-market-rates on the rest.

Definitely debatable as a strategy, but to do this, I had to let go of the fear of leaving (hypothetical) money on the table. Better to have bread and butter today than constantly wait for jam tomorrow.

Nikul Sanghvi said:
I'd like to share two things that I learnt from the sale:

1) Over the weeks of email negotiations, I was reminded that negotiations don't have to be treated as a zero-sum game. For one side to win, the other side doesn't have to lose.
If we begin with a mindset that aims for a win-win (both parties happy with outcome), the negotiation can be a pleasant and enjoyable experience. It's far too easy to see a negotiation as 'us-vs-them', but I'm starting to see both greater personal satisfaction, as well as better results, from a more collaborative approach.

2) If you have sufficient cashflow and (more importantly) ample patience, there is a viable risk:return ratio even when paying premium prices for high-quality brandable domains. Before I buy anything above $1k, I always ask myself, 'Would I be happy to launch a business on it myself?'. Can I imagine this domain on a logo, my LinkedIn profile, my business card, billboard advertising, etc? I only purchase if the answer is yes.
Don't get me wrong, I've bought a lot of junk over the years, but I'm slowly trying to learn and curate a portfolio that I feel proud to own.

Nikul Sanghvi · Dec 24, 2017

DomainDepot said:
Can you elaborate on your 1 word .co portfolio? You alluded to it a bit. Curious about how that experience has gone on the acquisition and sales side's? Thanks!

.CO now forms a huge part of my total portfolio - at least 90% in terms of volume and maybe 70% in terms of potential resale value. The volume is mainly because I've ramped up the number of hand-regs (deletes) in the last 6 months, as part of the 'research/testing' budget. As a guesstimate, at least three quarters of the .CO domains are one word with the rest being LLL.co and some two word.

I think that the mapping of resale price (end-user) for CO:COM is between 1:10 and 1:20 (between 5 to 10% of the .com value). However, I often find myself buying good quality .CO words for 1:50 to 1:200 (less than 1% or 2% of the .COM equivalent). So the value for me lies between the two different ratios. On the downside: the liquidity is much lower, market awareness is obviously behind .COM and renewals are also higher. It's probably a very similar numbers game for .IO but maybe other members can verify that.

I've also given a more detailed opinion on the pros and cons of .CO here, it might be useful too:
https://www.namepros.com/threads/dot-co-confusion.1033963/#post-6293060

Nikul Sanghvi said:
I'll start off with a disclaimer. I'm equally invested into .CO and .COM so that will definitely increase my chances of choice-supportive bias - or at least some type of post-purchase cognitive bias that prevents me from being completely neutral.

There are valid points on both sides of the argument. For me:

The downsides of .CO
- Yes, some traffic loss. If you have the money, .COM is king, I'll be the first to agree to that.
- Renewal fees! (Although, I think this keeps the extension clean and prevents usage for spam / bots)
- As a domainer, they're never going to command the same money as .COM
- For the reasons above, it's not a domainer-friendly extension - it's expensive to keep and not the easiest to sell!

The advantages of .CO
- It's possible to pick up some great keywords for a fraction of their .COM equivalent.
- A good one-word .CO can still be bought for $XX and sell for 4-figures+
- I feel like things have moved on somewhat since 2010. I don't see as much confusion between .COM and .CO (although some will always remain).
- Many countries are familiar with using .CO.** as part of their cctld - .CO.uk, .CO.jp, .CO.kr, .CO.za etc - there's a potential upgrade path here for when the straight-swap .COM is unobtainable.
- There is also an upgrade path for end-users coming off longer .COM or hyphenated-COMs - both of which will already experience traffic loss and misspells (impacting email and traffic)
- I personally, like short and snappy domains for business brands. The trade-off with a long .com is that people have to remember extra words. I'd rather have word.co than wordwordword.com where the additional words are unnecessary. The extra variable to remember just alternates to the other side of the dot (the extension).
- The letters CO have represented the word 'Company' for hundreds of years before COM. There are vast quantities of brands that end in '& Co' or 'Co'.

Regardless of extension:
- Poor quality domains will still be poor quality domains, no matter how long you hold them
- Renewing domains without any type of strategy increases portfolio maintenance costs, eating into profits.
- Not knowing how to find potential prospects limits ability to research and invest in 'end-user' quality domains
- Once you can identify prospects, not having confidence to do outbound sales limits you to awaiting inbound enquiries and/or assuming that nobody wants them.
- Buying domains without any end-users in mind limits ROI (unless Liquid, but I'll come onto that)
- It's easy for experienced domainers to say to a new domainer - 'buy one great .COM instead of 100 other .COM/non-COMs' but in reality, this is really hard for someone to do without having experienced what constitutes a 'great' domain vs a crap one.
Yes, theoretically its possible to learn this through a few days of extensive research, but great domains have a high-barrier to entry - they can't be found for a few hundred bucks.
In reality, most of us think we know better and then learn through our own experiences/mistakes. Better to do this with a couple of hundred bucks than several thousand.

A final point about investment styles / suggested certainty of liquid values...
100% agree with @promo , new investors/domainers should stick to .COM - because like for like, any other extension is harder to sell and more expensive to renew.
However, I don't get the whole concept of random 4L.com having persistent/safe monetary storage value... it feels like tulip-mania to assign a floor price to something that nobody would ever use and call it an asset. For me, the probability of an end-user wanting the domain is it's true connection to value. If the only other people that see value in a domain are other investors (not end users), it's worthless to me.

When it comes to domains, I also personally prefer calculated risks (call it lottery tickets) over safe investment. That's just me - I like the risk/return of exponential payoff with domains rather than market movement of a commodity-like asset. For safe (passive) investment, it makes more sense to push money into indices, bonds and ETFs - even equities.
I'd question how many people (outside of China) become domainers or start domain trading because they're looking for safe investments or non-fiat storage. Most people (myself included) are initially drawn into this like moths to a flame, watching DomainSherpa interviews and hearing about rags to riches stories on a XX into XX,XXX flip. Then the reality sets in... most of us learn the hard way, it's not that easy.
I digress, but my point is that a strong .CO portfolio can still produce yields. It will just have a larger standard-deviation of ROI than a 4L.com portfolio of equal value - therefore, it represents higher risk. If you can't afford the risk in the first place, it's not worth it at all.

Lastly, if you're a beginner starting to build a portfolio that includes non-COM, you shouldn't put all your eggs into one basket. By eggs, I mean money. And by 'basket', I mean TLD and/or niche. It restricts your ability to learn and increases your overall risk.

Bayan · Dec 27, 2017

Nikul, your next project should be writing a book. I am serious mate, you clearly have the talent for it.
I wish you all the best

(Almost) A Decade of Domaining...

hypernames.coVIP Member

hypernames.coVIP Member

hypernames.coVIP Member

hypernames.coVIP Member

hypernames.coVIP Member

hypernames.coVIP Member

Top Member

hypernames.coVIP Member

hypernames.coVIP Member

Domainosaurus RexTop Member

hypernames.coVIP Member

Co-founder, EftyTop Member

hypernames.coVIP Member

Top Member

Top Member

hypernames.coVIP Member

hypernames.coVIP Member

hypernames.coVIP Member

Account Closed (Requested)

Established Member

Top Member

Established Member

hypernames.coVIP Member

hypernames.coVIP Member

Established Member

Similar threads

We're social

Pinned

Appreciation

Agreement