discuss Are you better off trying to sell $1500 Domains for $250-400 and $3,000 Domains For $400-600 to get a much better sell through rate?

[Planet9]

I just read in Reddit that people buying domains with the intention of selling them can expect a 1% sell through rate each year give or take. Assuming this is true, are low level players better off underpricing domains significantly to get more sales or is their no price correlation for low level domains and sales rate.? Hypothetically if one might someday get $1,500 for a domain, will they get a much quicker sale today by underpricing them at $250-$400, etc? Is that the best move if you are not intending to build a vast portfolio and you have a low bankroll?

 

[biggie]

Hi

seems like common sense would dictate, with consideration of acquisition cost for each domain.

furthermore, each domain must have perceived or validated worth that’s higher than liquidation price.

shit info you find elsewhere, is just that.

btw: str don’t mean shit either


imo….

 

[bmugford]

Here is a good article by Michael (@NameBio) about price sensitivity.

https://twitter.com/x/status/1621065219232649216

Basically prices do not work in a linear way. If you have a domain priced at $2,500, it is not 5x as likely to sell at $500.

Lowering prices will likely raise STR somewhat, but not as much as the price drop.

It's a balancing act between maximizing prices and maximizing liquidity.

If I was starting out, my first stop would probably be GoDaddy closeouts. You can find better stuff on there daily than is available to hand register.

Over time, you will assemble a nice little portfolio of $50 (or less) domains.

It is also a lot easier to evaluate existing domains than come up with new registration ideas out of the blue.

Brad

 

[fka1080405]

The oft-quoted sell through rate of 1% is a number that reflects how unlikely most domain names are to sell, and how difficult it can be to build a portfolio of domains that will sell even if you are an experienced investor. The sell through rate also reflects that the typical domain name investment strategy is long term: it may take many years to find a buyer.

Sell through rate isn't very meaningful when comparing portfolios because, as you note, pricing can influence it. I've written a couple of reddit comments mentioning the 1% sell through rate number and each time my intent has been to demonstrate that sales are infrequent, rather than to provide a number to forecast or aim for. A portfolio of short single-word dictionary .com domains could have a 100% sell through rate if the owner decided to price for $100 each, or it could have a 0% sell through rate if the owner priced at 10s of millions of dollars per domain.

I believe that the mistake most novice domain name investors make is in believing that price is the starting point for understanding whether a domain name will sell. Price is the least important factor. The most important factor is the domain name itself because domains are not fungible. The first question to ask is: does anyone want the domain name? The answer to that question is almost always no. You, the registrant, are probably the only person on earth who wants it. Only once you have determined that there is at least one other person on earth who wants the domain name can you start to consider how pricing might influence whether or not the domain name can sell.

As an investor, whether you have a million dollars or a thousand dollars, your focus should be on building a portfolio of domain names that people want or will want. A portfolio of 1,000 domains that nobody wants is worse than a portfolio of 1 domain that someone wants. Domains are like art: anyone can paint a picture but only a fraction of a fraction of paintings would ever find someone willing to buy them.

A challenge for a novice is that namePros and other investment venues give the impression that domain names have some intrinsic value. A novice gets drawn in by "appraisals" and comparable sales. The reality is, the proportion of registered domains that anyone would pay for is a rounding error. If every domain name was made available to buy today for $100, less than 1% of all domain names would find a buyer. Appraisals are not useful for making investment decisions.

If you want to maximise your profitability, focus on acquiring and/or registering domains that you can define a buyer profile for. Rather than treating domain names as assets, treat them as liabilities: each domain is a burden that you must justify. Each domain is consuming capital that could have been spent on better domains.

Unfortunately, domain name investing is a zero sum game (there is only so much money to be made, if you make a dollar, that's a dollar I can't make) so you will not find many people willing to share their winning strategies. That's why I can't provide more concrete advice: you will need to have your own ideas and test theories and find your way to making money. The most concrete advice I can give is... buy less domains.

 

[bmugford]

btw: str don’t mean shit either

imo….

Yeah, it's just a guide.

If I own 1000 domains and sell (1) domain for $200,000 then the low STR doesn't really matter.

However, it's a somewhat helpful target to shoot for (or above) when it comes to selling ordinary domains at ordinary end user prices.

Brad

 

[Planet9]

Here is a good article by Michael (@NameBio) about price sensitivity.

https://twitter.com/x/status/1621065219232649216

Basically prices do not work in a linear way. If you have a domain priced at $2,500, it is not 5x as likely to sell at $500.

Lowering prices will likely raise STR somewhat, but not as much as the price drop.

It's a balancing act between maximizing prices and maximizing liquidity.

If I was starting out, my first stop would probably be GoDaddy closeouts. You can find better stuff on there daily than is available to hand register.

Over time, you will assemble a nice little portfolio of $50 (or less) domains.

It is also a lot easier to evaluate existing domains than come up with new registration ideas out of the blue.

Brad

Thanks for the info. Ironically I thiink I did buy a few of my domains at Godaddy Closeouts, I had forgotten till now, including CC1.org for $25 that I still can't sell at $250 2 years later, ADM2.com, Duty.2 COM at $15 each which haven't sold and the all-time dumbest thing I ever did because I didn't know better, the IDN, eû.com, for $50, which Godaddy/Afternic (and probably any other register) does not put as a landing page as eû.com but xn--e-cha.com! Yet they listed this on their auction page as eû.com and I swallowed the bait. These were all purchased as Buy It Nows & I had to pay registration fees as well. I stopped with the closeouts because they were giving me headaches looking at all the crap even with the advanced search engine. I only did Buy It Now Closeouts.

 

[Planet9]

The oft-quoted sell through rate of 1% is a number that reflects how unlikely most domain names are to sell, and how difficult it can be to build a portfolio of domains that will sell even if you are an experienced investor. The sell through rate also reflects that the typical domain name investment strategy is long term: it may take many years to find a buyer.

Sell through rate isn't very meaningful when comparing portfolios because, as you note, pricing can influence it. I've written a couple of reddit comments mentioning the 1% sell through rate number and each time my intent has been to demonstrate that sales are infrequent, rather than to provide a number to forecast or aim for. A portfolio of short single-word dictionary .com domains could have a 100% sell through rate if the owner decided to price for $100 each, or it could have a 0% sell through rate if the owner priced at 10s of millions of dollars per domain.

I believe that the mistake most novice domain name investors make is in believing that price is the starting point for understanding whether a domain name will sell. Price is the least important factor. The most important factor is the domain name itself because domains are not fungible. The first question to ask is: does anyone want the domain name? The answer to that question is almost always no. You, the registrant, are probably the only person on earth who wants it. Only once you have determined that there is at least one other person on earth who wants the domain name can you start to consider how pricing might influence whether or not the domain name can sell.

As an investor, whether you have a million dollars or a thousand dollars, your focus should be on building a portfolio of domain names that people want or will want. A portfolio of 1,000 domains that nobody wants is worse than a portfolio of 1 domain that someone wants. Domains are like art: anyone can paint a picture but only a fraction of a fraction of paintings would ever find someone willing to buy them.

A challenge for a novice is that namePros and other investment venues give the impression that domain names have some intrinsic value. A novice gets drawn in by "appraisals" and comparable sales. The reality is, the proportion of registered domains that anyone would pay for is a rounding error. If every domain name was made available to buy today for $100, less than 1% of all domain names would find a buyer. Appraisals are not useful for making investment decisions.

If you want to maximise your profitability, focus on acquiring and/or registering domains that you can define a buyer profile for. Rather than treating domain names as assets, treat them as liabilities: each domain is a burden that you must justify. Each domain is consuming capital that could have been spent on better domains.

Unfortunately, domain name investing is a zero sum game (there is only so much money to be made, if you make a dollar, that's a dollar I can't make) so you will not find many people willing to share their winning strategies. That's why I can't provide more concrete advice: you will need to have your own ideas and test theories and find your way to making money. The most concrete advice I can give is... buy less domains.

Great reply (post). A couple of opinion questions for you. If one had hypotheticslly 1,000 single dictionary word Com domains, if they priced them at $500 each, would the sell through rate be 100% through a calendar year? Expanding on what you said, how do ridiculous domain names, like (I'm making this up for example) 24399.com sell for decent money? Are these "phony sales" where the buyer is a friend ot partner of the seller who will give the buyer the sales price so that all he is losing is the comission price to drive up the value up? I mean why does MindSeek.com sell for $40,000?

 

[fka1080405]

Great reply (post). A couple of opinion questions for you. If one had hypotheticslly 1,000 single dictionary word Com domains, if they priced them at $500 each, would the sell through rate be 100% through a calendar year?

Probably.

Expanding on what you said, how do ridiculous domain names, like (I'm making this up for example) 24399.com sell for decent money? Are these "phony sales" where the buyer is a friend ot partner of the seller who will give the buyer the sales price so that all he is losing is the comission price to drive up the value up? I mean why does MindSeek.com sell for $40,000?

There are certainly people who engage in nefarious bidding to drive up prices but in most cases that's not what is happening. If, when analysing sales, you start by thinking that a domain has intrinsic value, a sale like MindSeek.com for $40,000 might seem ridiculous... but that's a flaw in the way you're thinking about sales.

The majority of high price domain sales are sales to an end user. An end user is someone buying a domain name to use, not as an investment. Sure, for $40,000 you could buy a 3L .com like nar.com that you could resell in future but if your company is called MindSeek, why would you care about resale value? An end user sale is coveted by domain name investors because the price is not dictated by the domain itself, but the value the end user gets from the domain.

.com is the default TLD, even today with thousands of alternative TLDs, .com still represents almost half of all domain name registrations. Owning the .com of your company name gives you de facto ownership over the name worldwide. If your company is called "MindSeek" and your website is "MindSeek.cool" then you are vulnerable to someone coming along and buying "MindSeek.com" which allows them (intentionally or unintentionally) to piggyback off of your brand building efforts.

Specific to MindSeek: google "MindSeek" and you'll find lots of companies using the name. There's mind-seek.com, mindseekai.com, mindseek.app and encoremindseek.net in the first page of results: that's multiple companies who would benefit from owning mindseek.com on the first page alone. Often, you can identify who bought the domain or make an educated guess. Which of these do you think might get $40,000 of value from owning the .com of their domain?

There is some degree of luck on the investors part here: did the investor in the domain know multiple companies would launch with the name "MindSeek"? Did they know that one of those companies would eventually be able to afford to spend $40,000 on a domain? No, they didn't know, but they likely had an investment thesis and a buyer profile in mind.

I won't provide a good strategy, but I will provide an example of a bad strategy:

A popular novice domain name investment strategy is to register a lot of keyword + location domain names, e.g: a novice might monitor new sales, see that houstonpersonalinjurylawyer.com sold for $4,700 and decide to build a portfolio of similar names. The novice might go to Wikipedia, find the top 100 most populous U.S. cities and then register 100 [city]personalinjurylawyer.com domains. Each domain is $10/year = $1,000/year. The novice might theorise that if each domain is worth $4,700 and they have a sell through rate of 1% then they will profit $3,700 per year.

That's a terrible strategy because it doesn't consider why the domain sold: who bought it? Why were they willing to spend $4,700? There are dozens of possibilities. For example, what if a company previously owned the domain houstonpersonalinjurylawyer.com and let it expire by mistake? Perhaps without access to the domain they couldn't access very valuable email communication, and that lack of access to could cause the business to shut down. The business owner would have a direct financial incentive to spend thousands of dollars on a domain for reasons that no other person on earth shares. The owner may have paid $4,700 out of desperation to rescue their business, not because [city]personalinjurylawyer.com has any intrinsic value.

Fundamentally, domains are not fungible. A domain that sells for $40,000 sold for $40,000 because it had $40,000 of value to the buyer. The reason for the $40,000 of value to the buyer could be completely unique to that buyer, or it could be indicative of a broader trend that an investor can use to help inform their investments.

 

[Planet9]

Probably.



There are certainly people who engage in nefarious bidding to drive up prices but in most cases that's not what is happening. If, when analysing sales, you start by thinking that a domain has intrinsic value, a sale like MindSeek.com for $40,000 might seem ridiculous... but that's a flaw in the way you're thinking about sales.

The majority of high price domain sales are sales to an end user. An end user is someone buying a domain name to use, not as an investment. Sure, for $40,000 you could buy a 3L .com like nar.com that you could resell in future but if your company is called MindSeek, why would you care about resale value? An end user sale is coveted by domain name investors because the price is not dictated by the domain itself, but the value the end user gets from the domain.

.com is the default TLD, even today with thousands of alternative TLDs, .com still represents almost half of all domain name registrations. Owning the .com of your company name gives you de facto ownership over the name worldwide. If your company is called "MindSeek" and your website is "MindSeek.cool" then you are vulnerable to someone coming along and buying "MindSeek.com" which allows them (intentionally or unintentionally) to piggyback off of your brand building efforts.

Specific to MindSeek: google "MindSeek" and you'll find lots of companies using the name. There's mind-seek.com, mindseekai.com, mindseek.app and encoremindseek.net in the first page of results: that's multiple companies who would benefit from owning mindseek.com on the first page alone. Often, you can identify who bought the domain or make an educated guess. Which of these do you think might get $40,000 of value from owning the .com of their domain?

There is some degree of luck on the investors part here: did the investor in the domain know multiple companies would launch with the name "MindSeek"? Did they know that one of those companies would eventually be able to afford to spend $40,000 on a domain? No, they didn't know, but they likely had an investment thesis and a buyer profile in mind.

I won't provide a good strategy, but I will provide an example of a bad strategy:

A popular novice domain name investment strategy is to register a lot of keyword + location domain names, e.g: a novice might monitor new sales, see that houstonpersonalinjurylawyer.com sold for $4,700 and decide to build a portfolio of similar names. The novice might go to Wikipedia, find the top 100 most populous U.S. cities and then register 100 [city]personalinjurylawyer.com domains. Each domain is $10/year = $1,000/year. The novice might theorise that if each domain is worth $4,700 and they have a sell through rate of 1% then they will profit $3,700 per year.

That's a terrible strategy because it doesn't consider why the domain sold: who bought it? Why were they willing to spend $4,700? There are dozens of possibilities. For example, what if a company previously owned the domain houstonpersonalinjurylawyer.com and let it expire by mistake? Perhaps without access to the domain they couldn't access very valuable email communication, and that lack of access to could cause the business to shut down. The business owner would have a direct financial incentive to spend thousands of dollars on a domain for reasons that no other person on earth shares. The owner may have paid $4,700 out of desperation to rescue their business, not because [city]personalinjurylawyer.com has any intrinsic value.

Fundamentally, domains are not fungible. A domain that sells for $40,000 sold for $40,000 because it had $40,000 of value to the buyer. The reason for the $40,000 of value to the buyer could be completely unique to that buyer, or it could be indicative of a broader trend that an investor can use to help inform their investments.

_

 

[Planet9]

Probably.



There are certainly people who engage in nefarious bidding to drive up prices but in most cases that's not what is happening. If, when analysing sales, you start by thinking that a domain has intrinsic value, a sale like MindSeek.com for $40,000 might seem ridiculous... but that's a flaw in the way you're thinking about sales.

The majority of high price domain sales are sales to an end user. An end user is someone buying a domain name to use, not as an investment. Sure, for $40,000 you could buy a 3L .com like nar.com that you could resell in future but if your company is called MindSeek, why would you care about resale value? An end user sale is coveted by domain name investors because the price is not dictated by the domain itself, but the value the end user gets from the domain.

.com is the default TLD, even today with thousands of alternative TLDs, .com still represents almost half of all domain name registrations. Owning the .com of your company name gives you de facto ownership over the name worldwide. If your company is called "MindSeek" and your website is "MindSeek.cool" then you are vulnerable to someone coming along and buying "MindSeek.com" which allows them (intentionally or unintentionally) to piggyback off of your brand building efforts.

Specific to MindSeek: google "MindSeek" and you'll find lots of companies using the name. There's mind-seek.com, mindseekai.com, mindseek.app and encoremindseek.net in the first page of results: that's multiple companies who would benefit from owning mindseek.com on the first page alone. Often, you can identify who bought the domain or make an educated guess. Which of these do you think might get $40,000 of value from owning the .com of their domain?

There is some degree of luck on the investors part here: did the investor in the domain know multiple companies would launch with the name "MindSeek"? Did they know that one of those companies would eventually be able to afford to spend $40,000 on a domain? No, they didn't know, but they likely had an investment thesis and a buyer profile in mind.

I won't provide a good strategy, but I will provide an example of a bad strategy:

A popular novice domain name investment strategy is to register a lot of keyword + location domain names, e.g: a novice might monitor new sales, see that houstonpersonalinjurylawyer.com sold for $4,700 and decide to build a portfolio of similar names. The novice might go to Wikipedia, find the top 100 most populous U.S. cities and then register 100 [city]personalinjurylawyer.com domains. Each domain is $10/year = $1,000/year. The novice might theorise that if each domain is worth $4,700 and they have a sell through rate of 1% then they will profit $3,700 per year.

That's a terrible strategy because it doesn't consider why the domain sold: who bought it? Why were they willing to spend $4,700? There are dozens of possibilities. For example, what if a company previously owned the domain houstonpersonalinjurylawyer.com and let it expire by mistake? Perhaps without access to the domain they couldn't access very valuable email communication, and that lack of access to could cause the business to shut down. The business owner would have a direct financial incentive to spend thousands of dollars on a domain for reasons that no other person on earth shares. The owner may have paid $4,700 out of desperation to rescue their business, not because [city]personalinjurylawyer.com has any intrinsic value.

Fundamentally, domains are not fungible. A domain that sells for $40,000 sold for $40,000 because it had $40,000 of value to the buyer. The reason for the $40,000 of value to the buyer could be completely unique to that buyer, or it could be indicative of a broader trend that an investor can use to help inform their investments.

I think it was MindSeek.ai not com that sold for $40,000.. If I made a typo I apologize. I'm too tired to doublecheck now, I admit I'm one of the people who tries to copy success domain sales but I'll just register a few similar domains if available not 100s.

 

[Acroplex]

You can always try to undersell 100 domains and see how that goes.

Not a fan of the STR strategy. Every domain in your portfolio needs to be priced according to accurate valuation, based on certain tools and your own research. If you must discount some in order to score a particular amount of money, do so—no need to expand the logic to the entire portfolio.

 

[othellotech]

including CC1.org for $25 that I still can't sell at $250 2 years later

So it was available to buy for 25 ... what have you done to add 225 of value to it for someone to consider it worth 250 ?

 

[bmugford]

So it was available to buy for 25 ... what have you done to add 225 of value to it for someone to consider it worth 250 ?

I would say that's not really how domain investment works in general.

It might be how it works when it comes to development, but pure domain investment is more about finding quality domains that have some greater potential than the price you are paying.

I am not adding value to the domains I buy. I am just buying domains I think have value.

In the sample domain though, I have no idea what the demand is for a LLN.org. I know it would be worth a fair amount in .COM, but apparently not in .ORG.

Brad

 

[Planet9]

So it was available to buy for 25 ... what have you done to add 225 of value to it for someone to consider it worth 250 ?

I don't get the question. I thought it was way undervalued at $25 Buy It Now and/or overlooked and as it was appraised at over $2,500. I just bought it and assumed that one day I will be able to sell it at $800 or up. That didn't happen so I went to $250 the lowest I'd sell it for. I don't get your point. When domains are sold by people who don't put web sites on them, they try to sell them at a significant profit. What is your point? What I did is basically no different than most people on this forum. I bought a domain, sat on it and hoped to turn a profit. Am I supposed to make a sacrifice to Satan to do something to get a profit? Oh yeah I also renewed it. What else do you want me to do? I don't think praying to God for material gain is something God wants. Satan, perhaps.

 

[URL Stream]

So it was available to buy for 25 ... what have you done to add 225 of value to it for someone to consider it worth 250 ?

I would say that's not really how domain investment works in general.

It might be how it works when it comes to development, but pure domain investment is more about finding quality domains that have some greater potential than the price you are paying.

I am not adding value to the domains I buy. I am just buying domains I think have value.

Aside from finding the right buyer, a simpler point is the distinction between wholesale and retail.

 

[NoobTask]

Why come to venture capital and try to sell for crumbs. In that case I would rather do something else.

I think less is more. And quality over quantity matter for me. If you droping bad domains for such prices to minify looses than I could understand that.

Point is that STR wouldnt change so much. Definitely not over 10%. So it is no point spending time with bad domains management.
Most likely you would play as waiter that serve hidden value to experiented domainers cheap.

 

[AEProgram]

The only time I would suggest pricing under 400 is if you will drop it anyway or you are doing mass email marketing.

 

[NoobTask]

AND to be rude generally speaking fuck aporaisals fools

 

[Planet9]

The only time I would suggest pricing under 400 is if you will drop it anyway or you are doing mass email marketing.

Interesting, Maybe I'll price these domains up again. Thank You for the advice. I'll start tommorow on that.