Located in Ask Pros Anything (APA), started by Nikul Sanghvi, Dec 23, 2017
This is a valuable article, even after all these years.
Thanks @jim h! I'm glad you found it useful.
Alongside the opening article, there are also a number of other posts within this thread, which may also be of interest:
Part Two: https://www.namepros.com/threads/almost-a-decade-of-domaining.1056328/page-3#post-6786857
Part Three: https://www.namepros.com/threads/almost-a-decade-of-domaining.1056328/page-4#post-7053359
Part Four: https://www.namepros.com/threads/almost-a-decade-of-domaining.1056328/page-5#post-7572841
Great reads! Thanks a lot for sharing your journey and insights.
Thanks for sharing
Can I nominate this for Post of the Decade? 😁
Thanks @NTLK , @Ozymandias and thank you @gericsb!
You might also like parts Two, Three and Four, linked below...
Thanks for another incredible post!
One question: Did you specifically search for Deletes, as opposed to expiring, simply to keep the Reg costs minimal? ( i.e. not get into a bidding war etc.)
Such a great thread and analysis, Nikul!!!
Thank you so much for taking the time to share.
Reviewing sales from 2010-2011, most of the low $xxx sales from that time I would not even bother renewing today. However, some of the high $xxx and low $xxxx sales from that time I would price higher today.
Thank you. In previous years, I felt the quality of inventory available in the deleted .COs was quite high, so I only bought at auctions for those domains that were exceptional. Over the last two years, this isn't the case. Firstly, the registry have introduced premium tiers, meaning deleted .CO are more expensive to hand register. And secondly, there is significantly more competition for .CO domains, which increases the amount of inventory being backordered and subsequently entering into auctions.
I didn't really start buying .CO until 2015(-ish), so missed out on the landrush in 2010. Sometimes when a new extension comes out, it's hard to immediately be able to tell which types of SLDs will pair well with that particular SLD. Probably a bit easier with nTLDs, but can be tricky with re-purposed ccTLDs.
Do you see some types of SLD that goes especially well with .CO?
great advice. ty.
Short, single words that makes good brand names. I see less traction on product names, dictionary plurals and EMDs, but that's not to say those sales don't happen.
Nice post and opened the eyes of newbies...
Thanks for sharing your experience instead of selling your experience in the form of ebooks....
Thanks, it looks similar to what is going well with .IO.
Thank you so much for sharing
This is a very valuable post I saw on namepros
If he charges, I think I will pay.
I have two questions,
How do you register 1,600 domain names in batches,
Use the tool to register manually or in batches, if you follow the method you wrote to register the domain name,
How long does it take
2020 is coming to an end, will you share the new sales report
I wish you increased sales
Thanks @leland - I built my portfolio over time (years). It's either a few domains each week or sometimes was in volume during a discount or coupon deal. Either way, it was manual - no tools other than ExpiredDomains.net (to monitor expired and deleted domains)
Yes, that's the plan! Hopefully in the first or second week of 2021.
thanks for sharing
I really think he is valuable,
I recently acquired some LLL.co
Hope to find some final buyers and make some money
Hope to hear your suggestions
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:
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:
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.
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.
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.
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.
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
LINKS TO REPORTED SALES THREAD FOR 2020:
Thanks for you valuable report, Nikul! Congrats with your sales!
Awesome report Nikul, thanks for the insights!
Thank you very much Nikul. Excellent post as usual
Awesome post there. Really deep dive at explaining your sales funnel.
How about increasing the BIN prices so that you can give the buyer the satisfaction of negotiating down, but still reach a win-win situation?
@Nikul Sanghvi oh wow what a legendary report!! thank you very mush for sharing.
Wish you all the best in 2021
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