Dan.com

discuss .Co pricing strategy: Your views?

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Arpit131

Top Member
Epik.com Staff
Impact
4,428
I happened to buy a couple of 100 .CO domain names which I believe are decent. Includes names like Scara.co and similar pronounceable names.

What is the sweet point of sale in .CO mostly?

I wish to bank on numbers and considering that I invested like $400 only, a single sale would recover the cost. Looking for recommendations on pricing strategy for .CO.
 
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meslam479

Established Member
Impact
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with just 100 .co domains you have the possibility to sell between 1 to 3 domains through the year, considering the worst case scenario, you will be able to sell only one domain, so you should at least recover your total investment with slight profit, hence I would recommend minimum $500 to $5000 depending on the quality of the name.
 

Nikul Sanghvi

hypernames.coTop Member
Impact
5,352
@Nikul Sanghvi If you could share your views on this?
What is the sweet point of sale in .CO mostly?

On the hand reg portfolio, my average inbound sale price is just below $2k. The actual sale prices range between $400 and $4000. This gives a monthly sell-through-rate of about 0.2% of the portfolio inventory - or an annual STR of just over 2%. Applying the same logic to your 100 domains, hopefully you can sell at least one or two passively (assuming they are of the same quality).

It's tricky to provide advice on pricing strategy because there are a number of unknown variables including:
- the quality of the 100 domains
- your overall domaining strategy and personal financial circumstances
- willingness to do successful outbound vs inbound-only

Your primary aim should be to recoup your $400 investment within the first three months. This might mean sifting through the 100 domains and looking for a dozen to actively take to market with targeted outbound emails to some potential end-users. Once you've broken even, there's less pressure on the remaining domains.

From personal experience, I also wouldn't bank on 'pronounceable' domains for .CO. Instead, I'd focus on finding domains that are taken (and actively in use) in other extensions such as com, net, org and io.

Hope that helps - and good luck! :)
 

alcy

Restricted (15-30%)
Impact
34,637
On the hand reg portfolio, my average inbound sale price is just below $2k. The actual sale prices range between $400 and $4000. This gives a monthly sell-through-rate of about 0.2% of the portfolio inventory - or an annual STR of just over 2%. Applying the same logic to your 100 domains, hopefully you can sell at least one or two passively (assuming they are of the same quality).

It's tricky to provide advice on pricing strategy because there are a number of unknown variables including:
- the quality of the 100 domains
- your overall domaining strategy and personal financial circumstances
- willingness to do successful outbound vs inbound-only

Your primary aim should be to recoup your $400 investment within the first three months. This might mean sifting through the 100 domains and looking for a dozen to actively take to market with targeted outbound emails to some potential end-users. Once you've broken even, there's less pressure on the remaining domains.

From personal experience, I also wouldn't bank on 'pronounceable' domains for .CO. Instead, I'd focus on finding domains that are taken (and actively in use) in other extensions such as com, net, org and io.

Hope that helps - and good luck! :)

great info
however in terms of extensions taken we all know that 1word pronouncables nearly all rank highest in ext taken column.

p.s if i may ask.. regging co at 7usd or even less on promos is great and doable for most..but how do u manage the 20 to 25usd renewls after? or do u just start over each year and drop nearly all? also are u concerned with recent co news to charge premium for some names..ty
 

Nikul Sanghvi

hypernames.coTop Member
Impact
5,352
great info
however in terms of extensions taken we all know that 1word pronouncables nearly all rank highest in ext taken column.

p.s if i may ask.. regging co at 7usd or even less on promos is great and doable for most..but how do u manage the 20 to 25usd renewls after? or do u just start over each year and drop nearly all? also are u concerned with recent co news to charge premium for some names..ty

Thanks @alcy

If I was to look at Scara as an example in the first post - it's available to hang-reg in .io so I'd give it a much lower propensity to sell in .co
And even though it's pronounceable, I can't find a dozen solid leads that have a business called Scara at a quick glance (using LinkedIn / Twitter). It's just my preference, and I'm sure it could still be sold - but I wouldn't personally buy a .CO for the primary reason that it was a non-dictionary or dictionary pronounceable.

Re: renewals... this was the original plan:

I'll be assessing each domain to grade / sort it into one of three buckets:

A) Approx 10% of the inventory - will be renewed at around $23 each
B) Around 30% of the inventory - will be allowed to expire. I'll add the domains to a CSV file to be purchased only if/when a coupon is available at $4 or below. Will be interesting to see how many make it through and stay deleted. I know that some will be snapped up before I re-register them. At a guess, I'll probably only get half of it.
C) The rest - will be allowed to expire without any plans to renew.

I'll still only renew around 10% but now I find that the vast majority of domains that I drop end up as 'Reserved' by the registry, so there's little hope of picking them up again with a coupon. It's definitely not a level-playing field anymore. I don't mind fair competition from other domainers (I encourage it!), but it's impossible to compete with a registry that doesn't have to backorder or bid in order to secure the domains they want.
 

alcy

Restricted (15-30%)
Impact
34,637
Thanks @alcy

If I was to look at Scara as an example in the first post - it's available to hang-reg in .io so I'd give it a much lower propensity to sell in .co
And even though it's pronounceable, I can't find a dozen solid leads that have a business called Scara at a quick glance (using LinkedIn / Twitter). It's just my preference, and I'm sure it could still be sold - but I wouldn't personally buy a .CO for the primary reason that it was a non-dictionary or dictionary pronounceable.

Re: renewals... this was the original plan:



I'll still only renew around 10% but now I find that the vast majority of domains that I drop end up as 'Reserved' by the registry, so there's little hope of picking them up again with a coupon. It's definitely not a level-playing field anymore. I don't mind fair competition from other domainers (I encourage it!), but it's impossible to compete with a registry that doesn't have to backorder or bid in order to secure the domains they want.

ty
this reserving of names is the recent co change we heard of first couple months back right? do u have more info about it? is sept1 the date we will be first seeing premium priced co regs? this will change renewal strategies for many i think... i think many more will renew their names.. makes u wonder if that wasnt main reason they did this.
hmmmm
 

Nikul Sanghvi

hypernames.coTop Member
Impact
5,352
ty
this reserving of names is the recent co change we heard of first couple months back right? do u have more info about it? is sept1 the date we will be first seeing premium priced co regs? this will change renewal strategies for many i think... i think many more will renew their names.. makes u wonder if that wasnt main reason they did this.
hmmmm

Sorry, I don't know much else about it, only what I've read here:

https://www.namepros.com/threads/co...es-report-thread.573976/page-492#post-6826235
https://www.namepros.com/threads/co...g-delete-domain-names-for-themselves.1090842/

You're right about renewal strategies... there are some that I would have dropped but now I might renew them for another year. It's only a handful, so I doubt that was their reasoning.
 

alcy

Restricted (15-30%)
Impact
34,637
Sorry, I don't know much else about it, only what I've read here:

https://www.namepros.com/threads/co...es-report-thread.573976/page-492#post-6826235
https://www.namepros.com/threads/co...g-delete-domain-names-for-themselves.1090842/

You're right about renewal strategies... there are some that I would have dropped but now I might renew them for another year. It's only a handful, so I doubt that was their reasoning.

ty for links yer good guy

as for handfuls.. well u know bow it is...handful from me handful from u.. and then all other domainers... and suddenly its all exponential... ;)

whether that was their main reason or not..looks like many more renewals will be its main wanted or unwanted side effect... makes one wonder how they ll be pricing stuff... itll be weird to see for co.
 

Arpit131

Top Member
Epik.com Staff
Impact
4,428
with just 100 .co domains you have the possibility to sell between 1 to 3 domains through the year, considering the worst case scenario, you will be able to sell only one domain, so you should at least recover your total investment with slight profit, hence I would recommend minimum $500 to $5000 depending on the quality of the name.

Point noted. As of now, I have priced each of them at $2,000 on Sedo and Afternic.
 

Arpit131

Top Member
Epik.com Staff
Impact
4,428
On the hand reg portfolio, my average inbound sale price is just below $2k. The actual sale prices range between $400 and $4000. This gives a monthly sell-through-rate of about 0.2% of the portfolio inventory - or an annual STR of just over 2%. Applying the same logic to your 100 domains, hopefully you can sell at least one or two passively (assuming they are of the same quality).

It's tricky to provide advice on pricing strategy because there are a number of unknown variables including:
- the quality of the 100 domains
- your overall domaining strategy and personal financial circumstances
- willingness to do successful outbound vs inbound-only

Your primary aim should be to recoup your $400 investment within the first three months. This might mean sifting through the 100 domains and looking for a dozen to actively take to market with targeted outbound emails to some potential end-users. Once you've broken even, there's less pressure on the remaining domains.

From personal experience, I also wouldn't bank on 'pronounceable' domains for .CO. Instead, I'd focus on finding domains that are taken (and actively in use) in other extensions such as com, net, org and io.

Hope that helps - and good luck! :)
Thanks for the advice Nikul. Much appreciated.
I happened to follow your .CO post which made me try a similar experiment just to see how a sitting portfolio may perform.
The steps followed are more or less similar with some tweaks. I've priced it at $2,000 as of now but I'd be changing it to $1,000 as soon as the first sale happens.
The names are mostly taken in 15+ extensions and has twitter handle and LinkedIn companies on them.
Fingers crossed!
 
Impact
1,002
Seems like singular nouns sell quick along with LLL.

With 1 year and a 100 domains, I would probably list them all on GD premium along with Afternic with a BIN of $399 (maybe higher if you snagged some generic singular nouns) and then lower each month until expiration comes around next year

Good luck - Let us know of any sales!
 

alcy

Restricted (15-30%)
Impact
34,637
@Nikul Sanghvi

hi there.. just wondering if you would like to comment on the current new pricing tiers from .co in effect since sept1 2018.

such as how this will affect your .co pricings, acquisitions, renewal numbers..

it seems that most of us will be thinking twice before dropping vs renewing our .co names.. as it seems .co is pricing not only 3l.co or 4l.co or 1word names at premium prices.. but also relatively random or not particularly valuable 2word names.. 5l made up names (like brandable etc)..

would love to hear your thoughts on this. I understand .co sales are a major part of yoru domaining ventures/portfolio.

thanks!
 
Last edited:

Nikul Sanghvi

hypernames.coTop Member
Impact
5,352
I'm still thinking this over but for now, I can't see any major changes on my pricing, renewals or general acquisitions. I do see a change forming in my longer term strategy. I'll break this down and share some other thoughts...

The easiest way for me to think about this, is that there is a new domainer (Neustar/ CO Registry) who has two distinct and unfair market advantages. One advantage is that they have first right of refusal on all dropping domains - and never need to participate in backorders or backorder auctions. The second advantage is that they have no renewal fees, so their portfolio size is not hampered by any direct registration costs. This allows them to instantly build a huge portfolio and then sell the domains within the portfolio at a lower cost compared to other domainers. They have fewer worries about sell-through-rate or yield compared to us, so it's a win-win for them.

Aside from Neustar, the winners are GoDaddy and less obviously, the end-users. GoDaddy win because the bidding activity will be increased on GoDaddy Expired Auctions... unless they decide (or get paid) to drop .CO from this process and pass them back directly to the registry for first refusal. I think that overall, this is also a win for end-users. CO has always been an anti-domainer registry from the outset. They want to prioritise end-user demand, reduce inappropriate use cases (spam/phishing) and keep the extension in the race as a popular alternative to .com. Because the registry has minimal holding costs and no visible acquisition cost in this method, they are able to resell the domains for prices like $130. The domains that would have been picked up by domainers would have been priced higher than this - I would guess maybe around $300 to $4000. The 'premium' pricing by the registry is low enough to entice end-users and high enough to deter most domainers. It's a middle ground designed to push the domains into the hands of those that will actively use them. In the long term, this will hopefully mean the extension has more popularity, more end-user awareness and longevity. They've specifically chosen to have a one-off upfront premium fee rather than a reoccuring premium fee for every renewal (fees for renewals are still not cheap at $22+). The latter strategy of charging $XXX+ for renewals would have killed the extension and they know it.

I try to look at this from the perspective of what impact it will have on end-users. If the impact is positive, I think the outcome is largely favourable for domainers holding quality domains in the extension. The primary caveat/warning here is that this change is a clear indication of the registry's ability to make changes without prior consultation or communication to the domaining community. They set the rules and don't give a monkey about domainers... that much is certain and they are legally entitled to make decisions in that way. Old school domainers and .com stalwarts have long held a sentiment, which is clearer (and truer) than ever: if domainers invest long-term outside of .com, they expose themselves to inherent risks and have zero control over mitigating them.
There is nowhere to complain if .co renewal fees increase. There is nowhere to complain if .co decides to change the waterfall rules of expiry and deletion. It is not a domainer-friendly extension, but it's has found it's way through a tenacious focus on creating and promoting end-use rather than speculative holding.

The obvious losers are dropcatch/backorder services and many domainers that focus on deletes or backorders. The dropcatchers/backorder services are deprived of a revenue stream (users only pay for successful catches). I suspect that .co is insignificant volume for most of them compared to .com.
The domainers who build inventory from deletes and backorder are also deprived of a source of stock from which they can build inventory. A lot of 'flippers' on NP make money from buying through backorders and then reselling to other domainers at a wholesale markup. The change is a loss for that business model, but also closes an inventory acquisition path for domainers like myself who buy from those domainers.
This 'premium' pricing change is also less positive even for domainers who don't flip at wholesale, but have relied on hand-regs and expiring domains for end-user inventory. It pretty much leaves my deletes strategy dead in the water. I shared that information because I was planning to stop hand-regging in volumes on a daily basis. I really wanted other domainers to have a chance at making some money, so I laid out a blueprint. From this perspective, I'm incredibly disappointed in the change.
Going forward, the remaining domains available to handreg (not taken by the registry) will be of a lower quality. We can assume they'll have a much lower sell-through-rate to end users. In turn, this also reduces the value of coupons and discounts, because the can only be utilised on the weaker leftovers.
However, I wouldn't be surprised if discounts and coupons emerge for registry-recognised 'Premium' domains at some point in the future.

There are still a lot of great .co domains that are in private hands. It is unlikely or rare that these would ever be dropped or make it to delete. They will either be sold to end-users, traded from domainer to domainer, or be resold at GD expiring auctions (dependant on which registrar held them). On those types of acquisitions, this makes no difference to the price I am willing to pay for a good domain. If I thought I could make money on a domain, I would pay the same price through GD auction, domainer resale or direct from Neustar. I normally look for at least 10x resale on purchases that range from $100 to $500. So if I think the domain is priced at 10% or less of it's potential resale value, I'm indifferent to the acquisition source. I'd prefer that money going back into the pockets of a private domainer, rather than a big company like Neustar or GoDaddy!

In the near future, the lower-middle market that might emerge is domainer to domainer wholesale/resale of .co domains on places like NP.
I may not be wanting to renew a particular domain for $23, but there may be others who will take a punt on it. As a domain comes up towards expiration, the aftermarket may be more willing to buy this domain for $10 to $30 (plus the renewal fee) - in situ of the traditional backorder or closeout cost. But I don't think that would be a massive market, because the volume of domainers willing to pay $50+ (in total) for a .co domain is relatively small.

Regarding renewals, I don't think I will hold onto substantially more domains because of this. If I picked up a domain for $4 and wouldn't renew it for $23, the same logic still applies. What has changed, is my ability to refill inventory with similar quality of domains at those discounted rates. It still doesn't make me want to pay $23 for a domain that I was planning to drop. My investment in a domain is based on it's propensity to sell, so I don't see any major changes in that. I think I'll renew an additional 5% of .co inventory as a result of the changes.
I do think twice about what I drop, but I don't hold onto a domain just because I already have it. It's only worth renewing, if I think it's worth the renewal cost and has a good chance at selling. I have different expectations on a $1 reg and a $23 renewal. It's not worth renewing just because my replenishment costs have increased to restock the portfolio. I always think about the opportunity cost of the renewal fees. I also ask myself if I would hypothetically buy that domain from another domainer at the renewal price.

I also won't be increasing resale prices - because I don't think that end-users will or should absorb the change. The general rule is that if prices go up, total number of sales go down - unless demand also increases or supply wanes. There is no additional end-user demand created in the short term, but there may be different demand signals from domainer to domainer. Outside of wholesale, nothing really changes for me in terms of pricing or resale targets. If renewal costs do go up, and end-user prices don't - it just means a squeeze on margins.

I've been acknowledging the over-dependence on .co within my own portfolio for a while... so I think this will act as a catalyst for me to seek some diversification.
I haven't really practiced what I preach, and I have a lot of eggs in the same basket. This has been a helpful reminder that I need to spread out my risk - and also bring some focus back onto quality vs quantity.

To conclude, I think the impact of this change depends on where your strategy is focused as a domainer.
Last year, when I was testing .co handregs at scale, it would have hit me hard. This year, I am less worried... but I still think it's far from ideal. Nonetheless, these changes are outside of our control, so as domainers, we have no choice other than to learn and adapt.

Hope that helps :)
 
Last edited:

alcy

Restricted (15-30%)
Impact
34,637
I'm still thinking this over but for now, I can't see any major changes on my pricing, renewals or general acquisitions. I do see a change forming in my longer term strategy. I'll break this down and share some other thoughts...

The easiest way for me to think about this, is that there is a new domainer (Neustar/ CO Registry) who has two distinct and unfair market advantages. One advantage is that they have first right of refusal on all dropping domains - and never need to participate in backorders or backorder auctions. The second advantage is that they have no renewal fees, so their portfolio size is not hampered by any direct registration costs. This allows them to instantly build a huge portfolio and then sell the domains within the portfolio at a lower cost compared to other domainers. They have fewer worries about sell-through-rate or yield compared to us, so it's a win-win for them.

Aside from Neustar, the winners are GoDaddy and less obviously, the end-users. GoDaddy win because the bidding activity will be increased on GoDaddy Expired Auctions... unless they decide (or get paid) to drop .CO from this process and pass them back directly to the registry for first refusal. I think that overall, this is also a win for end-users. CO has always been an anti-domainer registry from the outset. They want to prioritise end-user demand, reduce inappropriate use cases (spam/phishing) and keep the extension in the race as a popular alternative to .com. Because the registry has minimal holding costs and no visible acquisition cost in this method, they are able to resell the domains for prices like $130. The domains that would have been picked up by domainers would have been priced higher than this - I would guess maybe around $300 to $4000. The 'premium' pricing by the registry is low enough to entice end-users and high enough to deter most domainers. It's a middle ground designed to push the domains into the hands of those that will actively use them. In the long term, this will hopefully mean the extension has more popularity, more end-user awareness and longevity. They've specifically chosen to have a one-off upfront premium fee rather than a reoccuring premium fee for every renewal (fees for renewals are still not cheap at $22+). The latter strategy of charging $XXX+ for renewals would have killed the extension and they know it.

I try to look at this from the perspective of what impact it will have on end-users. If the impact is positive, I think the outcome is largely favourable for domainers holding quality domains in the extension. The primary caveat/warning here is that this change is a clear indication of the registry's ability to make changes without prior consultation or communication to the domaining community. They set the rules and don't give a monkey about domainers... that much is certain and they are legally entitled to make decisions in that way. Old school domainers and .com stalwarts have long held a sentiment, which is clearer (and truer) than ever: if domainers invest long-term outside of .com, they expose themselves to inherent risks and have zero control over mitigating them.
There is nowhere to complain if .co renewal fees increase. There is nowhere to complain if .co decides to change the waterfall rules of expiry and deletion. It is not a domainer-friendly extension, but it's has found it's way through a tenacious focus on creating and promoting end-use rather than speculative holding.

The obvious losers are dropcatch/backorder services and many domainers that focus on deletes or backorders. The dropcatchers/backorder services are deprived of a revenue stream (users only pay for successful catches). I suspect that .co is insignificant volume for most of them compared to .com.
The domainers who build inventory from deletes and backorder are also deprived of a source of stock from which they can build inventory. A lot of 'flippers' on NP make money from buying through backorders and then reselling to other domainers at a wholesale markup. The change is a loss for that business model, but also closes an inventory acquisition path for domainers like myself who buy from those domainers.
This 'premium' pricing change is also less positive even for domainers who don't flip at wholesale, but have relied on hand-regs and expiring domains for end-user inventory. It pretty much leaves my deletes strategy dead in the water. I shared that information because I was planning to stop hand-regging in volumes on a daily basis. I really wanted other domainers to have a chance at making some money, so I laid out a blueprint. From this perspective, I'm incredibly disappointed in the change.
Going forward, the remaining domains available to handreg (not taken by the registry) will be of a lower quality. We can assume they'll have a much lower sell-through-rate to end users. In turn, this also reduces the value of coupons and discounts, because the can only be utilised on the weaker leftovers.
However, I wouldn't be surprised if discounts and coupons emerge for registry-recognised 'Premium' domains at some point in the future.

There are still a lot of great .co domains that are in private hands. It is unlikely or rare that these would ever be dropped or make it to delete. They will either be sold to end-users, traded from domainer to domainer, or be resold at GD expiring auctions (dependant on which registrar held them). On those types of acquisitions, this makes no difference to the price I am willing to pay for a good domain. If I thought I could make money on a domain, I would pay the same price through GD auction, domainer resale or direct from Neustar. I normally look for at least 10x resale on purchases that range from $100 to $500. So if I think the domain is priced at 10% or less of it's potential resale value, I'm indifferent to the acquisition source. I'd prefer that money going back into the pockets of a private domainer, rather than a big company like Neustar or GoDaddy!

In the near future, the lower-middle market that might emerge is domainer to domainer wholesale/resale of .co domains on places like NP.
I may not be wanting to renew a particular domain for $23, but there may be others who will take a punt on it. As a domain comes up towards expiration, the aftermarket may be more willing to buy this domain for $10 to $30 (plus the renewal fee) - in situ of the traditional backorder or closeout cost. But I don't think that would be a massive market, because the volume of domainers willing to pay $50+ (in total) for a .co domain is relatively small.

Regarding renewals, I don't think I will hold onto substantially more domains because of this. If I picked up a domain for $4 and wouldn't renew it for $23, the same logic still applies. What has changed, is my ability to refill inventory with similar quality of domains at those discounted rates. It still doesn't make me want to pay $23 for a domain that I was planning to drop. My investment in a domain is based on it's propensity to sell, so I don't see any major changes in that. I think I'll renew an additional 5% of .co inventory as a result of the changes.
I do think twice about what I drop, but I don't hold onto a domain just because I already have it. It's only worth renewing, if I think it's worth the renewal cost and has a good chance at selling. I have different expectations on a $1 reg and a $23 renewal. It's not worth renewing just because my replenishment costs have increased to restock the portfolio. I always think about the opportunity cost of the renewal fees. I also ask myself if I would hypothetically buy that domain from another domainer at the renewal price.

I also won't be increasing resale prices - because I don't think that end-users will or should absorb the change. The general rule is that if prices go up, total number of sales go down - unless demand also increases or supply wanes. There is no additional end-user demand created in the short term, but there may be different demand signals from domainer to domainer. Outside of wholesale, nothing really changes for me in terms of pricing or resale targets. If renewal costs do go up, and end-user prices don't - it just means a squeeze on margins.

I've been acknowledging the over-dependence on .co within my own portfolio for a while... so I think this will act as a catalyst for me to seek some diversification.
I haven't really practiced what I preach, and I have a lot of eggs in the same basket. This has been a helpful reminder that I need to spread out my risk - and also bring some focus back onto quality vs quantity.

To conclude, I think the impact of this change depends on where your strategy is focused as a domainer.
Last year, when I was testing .co handregs at scale, it would have hit me hard. This year, I am less worried... but I still think it's far from ideal. Nonetheless, these changes are outside of our control, so as domainers, we have no choice other than to learn and adapt.

Hope that helps :)

thanks for sharing. obviously this move impacts some domainers.

it also appears a place like gd is not allowing premium names to be sold via their auctions at all. except expiring of course.

so many of us will lose that sale venue as well. i think same for sedo.

u can try listing any 3l etc... it wont let u get past input window
 

Nikul Sanghvi

hypernames.coTop Member
Impact
5,352
so many of us will lose that sale venue as well. i think same for sedo.

Thanks @alcy I didn't know about GD or Sedo.

Oh well, I guess there's always Efty :)
 

alcy

Restricted (15-30%)
Impact
34,637
yes... but efty is for landers... there are alwaya many options for landers... me i meant exposure on marketplaces... where so many sales happen
thanks ;)
 

Brands.International

MarekTop Contributor
Impact
8,570
I'm still thinking this over but for now, I can't see any major changes on my pricing, renewals or general acquisitions. I do see a change forming in my longer term strategy. I'll break this down and share some other thoughts...

The easiest way for me to think about this, is that there is a new domainer (Neustar/ CO Registry) who has two distinct and unfair market advantages. One advantage is that they have first right of refusal on all dropping domains - and never need to participate in backorders or backorder auctions. The second advantage is that they have no renewal fees, so their portfolio size is not hampered by any direct registration costs. This allows them to instantly build a huge portfolio and then sell the domains within the portfolio at a lower cost compared to other domainers. They have fewer worries about sell-through-rate or yield compared to us, so it's a win-win for them.

Aside from Neustar, the winners are GoDaddy and less obviously, the end-users. GoDaddy win because the bidding activity will be increased on GoDaddy Expired Auctions... unless they decide (or get paid) to drop .CO from this process and pass them back directly to the registry for first refusal. I think that overall, this is also a win for end-users. CO has always been an anti-domainer registry from the outset. They want to prioritise end-user demand, reduce inappropriate use cases (spam/phishing) and keep the extension in the race as a popular alternative to .com. Because the registry has minimal holding costs and no visible acquisition cost in this method, they are able to resell the domains for prices like $130. The domains that would have been picked up by domainers would have been priced higher than this - I would guess maybe around $300 to $4000. The 'premium' pricing by the registry is low enough to entice end-users and high enough to deter most domainers. It's a middle ground designed to push the domains into the hands of those that will actively use them. In the long term, this will hopefully mean the extension has more popularity, more end-user awareness and longevity. They've specifically chosen to have a one-off upfront premium fee rather than a reoccuring premium fee for every renewal (fees for renewals are still not cheap at $22+). The latter strategy of charging $XXX+ for renewals would have killed the extension and they know it.

I try to look at this from the perspective of what impact it will have on end-users. If the impact is positive, I think the outcome is largely favourable for domainers holding quality domains in the extension. The primary caveat/warning here is that this change is a clear indication of the registry's ability to make changes without prior consultation or communication to the domaining community. They set the rules and don't give a monkey about domainers... that much is certain and they are legally entitled to make decisions in that way. Old school domainers and .com stalwarts have long held a sentiment, which is clearer (and truer) than ever: if domainers invest long-term outside of .com, they expose themselves to inherent risks and have zero control over mitigating them.
There is nowhere to complain if .co renewal fees increase. There is nowhere to complain if .co decides to change the waterfall rules of expiry and deletion. It is not a domainer-friendly extension, but it's has found it's way through a tenacious focus on creating and promoting end-use rather than speculative holding.

The obvious losers are dropcatch/backorder services and many domainers that focus on deletes or backorders. The dropcatchers/backorder services are deprived of a revenue stream (users only pay for successful catches). I suspect that .co is insignificant volume for most of them compared to .com.
The domainers who build inventory from deletes and backorder are also deprived of a source of stock from which they can build inventory. A lot of 'flippers' on NP make money from buying through backorders and then reselling to other domainers at a wholesale markup. The change is a loss for that business model, but also closes an inventory acquisition path for domainers like myself who buy from those domainers.
This 'premium' pricing change is also less positive even for domainers who don't flip at wholesale, but have relied on hand-regs and expiring domains for end-user inventory. It pretty much leaves my deletes strategy dead in the water. I shared that information because I was planning to stop hand-regging in volumes on a daily basis. I really wanted other domainers to have a chance at making some money, so I laid out a blueprint. From this perspective, I'm incredibly disappointed in the change.
Going forward, the remaining domains available to handreg (not taken by the registry) will be of a lower quality. We can assume they'll have a much lower sell-through-rate to end users. In turn, this also reduces the value of coupons and discounts, because the can only be utilised on the weaker leftovers.
However, I wouldn't be surprised if discounts and coupons emerge for registry-recognised 'Premium' domains at some point in the future.

There are still a lot of great .co domains that are in private hands. It is unlikely or rare that these would ever be dropped or make it to delete. They will either be sold to end-users, traded from domainer to domainer, or be resold at GD expiring auctions (dependant on which registrar held them). On those types of acquisitions, this makes no difference to the price I am willing to pay for a good domain. If I thought I could make money on a domain, I would pay the same price through GD auction, domainer resale or direct from Neustar. I normally look for at least 10x resale on purchases that range from $100 to $500. So if I think the domain is priced at 10% or less of it's potential resale value, I'm indifferent to the acquisition source. I'd prefer that money going back into the pockets of a private domainer, rather than a big company like Neustar or GoDaddy!

In the near future, the lower-middle market that might emerge is domainer to domainer wholesale/resale of .co domains on places like NP.
I may not be wanting to renew a particular domain for $23, but there may be others who will take a punt on it. As a domain comes up towards expiration, the aftermarket may be more willing to buy this domain for $10 to $30 (plus the renewal fee) - in situ of the traditional backorder or closeout cost. But I don't think that would be a massive market, because the volume of domainers willing to pay $50+ (in total) for a .co domain is relatively small.

Regarding renewals, I don't think I will hold onto substantially more domains because of this. If I picked up a domain for $4 and wouldn't renew it for $23, the same logic still applies. What has changed, is my ability to refill inventory with similar quality of domains at those discounted rates. It still doesn't make me want to pay $23 for a domain that I was planning to drop. My investment in a domain is based on it's propensity to sell, so I don't see any major changes in that. I think I'll renew an additional 5% of .co inventory as a result of the changes.
I do think twice about what I drop, but I don't hold onto a domain just because I already have it. It's only worth renewing, if I think it's worth the renewal cost and has a good chance at selling. I have different expectations on a $1 reg and a $23 renewal. It's not worth renewing just because my replenishment costs have increased to restock the portfolio. I always think about the opportunity cost of the renewal fees. I also ask myself if I would hypothetically buy that domain from another domainer at the renewal price.

I also won't be increasing resale prices - because I don't think that end-users will or should absorb the change. The general rule is that if prices go up, total number of sales go down - unless demand also increases or supply wanes. There is no additional end-user demand created in the short term, but there may be different demand signals from domainer to domainer. Outside of wholesale, nothing really changes for me in terms of pricing or resale targets. If renewal costs do go up, and end-user prices don't - it just means a squeeze on margins.

I've been acknowledging the over-dependence on .co within my own portfolio for a while... so I think this will act as a catalyst for me to seek some diversification.
I haven't really practiced what I preach, and I have a lot of eggs in the same basket. This has been a helpful reminder that I need to spread out my risk - and also bring some focus back onto quality vs quantity.

To conclude, I think the impact of this change depends on where your strategy is focused as a domainer.
Last year, when I was testing .co handregs at scale, it would have hit me hard. This year, I am less worried... but I still think it's far from ideal. Nonetheless, these changes are outside of our control, so as domainers, we have no choice other than to learn and adapt.

Hope that helps :)
Nikul, with this type of .co pricing and overal logic how to handle the porfolio, you can now safely move to new gTLDs ... we have it like this from day 1 :)
 

alcy

Restricted (15-30%)
Impact
34,637
Nikul, with this type of .co pricing and overal logic how to handle the porfolio, you can now safely move to new gTLDs ... we have it like this from day 1 :)

most ngtlds have premium renewals too..unlike .co.... plus the sales of .co far far exceed ngtld sales... minus a few exxeption domainers such as perhaps yerself...

truly it is hard to beat an extension like co in terms of appeal..its just too similar to com..and many love it for it... i think after com...co has most sales..
so that about says it all.


cheers
 

NYJimbo

Domain Re-AnimatorTop Contributor
Impact
6,306
What is the sweet point of sale in .CO mostly?
Buying .CO domains of existing large companies and convincing them they really need to buy the .CO versions of their .COM's. It's not just making a sale, it's an art. :xf.wink:
 

alcy

Restricted (15-30%)
Impact
34,637
Buying .CO domains of existing large companies and convincing them they really need to buy the .CO versions of their .COM's. It's not just making a sale, it's an art. :xf.wink:

that would make a whole lot of artists in the world according to namebio.. ;)

no outbound needed really... just the right names.. and marketplaces.. and landing page.. the rest does itself ..

.co is far from being just about outbounding the .com equivalent.. though it can be that too.. if you want it to be :)

cheers
 
Impact
4,268
I see the point of keeping only LLL .co or key one word, because renewal is expensive.
 
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Shaun Lun

Top Contributor
Impact
398
I happened to finally receive my much awaited LLL.co from gd auctions. The domain at gd appraisals stated it’s taken in 26 other extension. I would love to make a sale. Great insights from all contributors to this thread. Keep up the good work!
 
Impact
4,268
LLL.co transfer/renewal price has risen. We waited for a drop price of .co, but we got increase.