tips Discounting domain prices - 2023 update. (Don't discount much)

[twiki]

Some of you might know that in the past I did a lot of posts on discounts, and pricing to clear.

This is sort of an update post, as to what I am doing in 2023. Been testing lately, side note I always test things.

Note: This might not apply to everyone so do your own best judgement. I'm just sharing what I understood and I am using now.

Okay, now to the point.

In the past I used to sell a lot of domains at $199, $299 and whatever prices. Also at $75 in some cases. This was pre-2022. And quite a lot of other folks here have followed suit with good results in general. But in 2022, all this has stopped. Something did change in the market.

So what I do now? (except from a few tests here and there, and NP sales):

Never discount much under $1K, if at all.

And let me explain why.

There are 3 obvious types of buyers of domain names if you ask me:

1) Retail buyers (that will pay top dollar)

2) Lowballers (in lack of a better name; anyway buyers that will only ditch a couple hundred out, for any reasons including they don't have more; usually NOT investors )

3) Other investors.

The difference in my perception is that investors no longer pay $199 or $299 on a domain since 2022 started. Or at least most of them. And if you do the math in the current market, you'll know why. They'd be making losses.

So what do you do now by discounting that much? You actuall give the option to lowballers to get your domain for cheap before the right buyer comes, and you might definitely miss on that top retail sale.

I currently use 2 prices, $999 and $750 currently and still doing some alternate testing (haven't decided yet which brings more).

Please also note that if you by chance get 5 sales at $199, that's just $1k. You might feel you sold a lot, but no, that'd be just one discounted sale of 1k. It's a perception thing that might fool some of us (it definitely "tries to play me" as well).

You also might get hit with more fees for more payments.

And if you plan to renew them? That's entirely dumb pricing in such case, as overall at 1% or 2% yearly average sales ratio, you are bleeding money fast. Especially in the current market where domain prices went up and sales went down; so yearly ratio might be significantly smaller, you definitely need to price high.

Besides, domain prices haven't went down lately. And no chance they will by a lot. Because it doesn't make sense economically for most investors to reduce prices now.

Now the caveat is, everyone loves a good deal.

So if you had your domain at say $2K, dropping it to $1500 or $1700 might bring you a very happy buyer.

But do not discount it to $250 or $150 or whatever; as that will likely only bring you loss overall. Assuming though that you made your research well and that your prices are accurate.

Happy sales in 2023!

Later edit: Most of my domain are .COMs of 1-2 words and not liquid type, to be more specific. Either meaningful or brandable .COMs.

 

[evea]

Thank you for the valuable info

 

[tonyk2000]

An interesting observation. Thank you @twiki . An exception would probably be discounted listings, replacement of nameliquidate(.com)... If the domainer is not going to renew something, then replacing makeoffer or normal BIN with something in low 3 figures makes sense. Folks are already doing this, I guess successfully. This is because one can always find some deals in low 3 figures range on marketplaces (local marketplaces of domainer-friendly registrars like Dynadot or NameSilo) and/or afternic (via godaddy auctions search)... and the resulting domains would be somewhat close to expiry. Yeah, one man's trash is another man's treasure...

 

[twiki]

An interesting observation. Thank you @twiki . An exception would probably be discounted listings, replacement of nameliquidate(.com)... If the domainer is not going to renew something, then replacing makeoffer or normal BIN with something in low 3 figures makes sense. Folks are already doing this, I guess successfully. This is because one can always find some deals in low 3 figures range on marketplaces (local marketplaces of domainer-friendly registrars like Dynadot or NameSilo) and/or afternic (via godaddy auctions search)... and the resulting domains would be somewhat close to expiry. Yeah, one man's trash is another man's treasure...

You are correct. This is mostly for general marketplaces such as Afternic and Sedo where you get a lot of end user sales.

Nameliquidate, as well as NP sales, are a different thing - EOL sales to other domainers.

 

[Rajiscripts]

Thanks for putting this out.
This is one of many reasons we would always pride knowledge and experience in the domain industry.

 

[okaydomains]

Thank you for the write-up. I'm struggling with this as well and really appreciate hearing your thoughts.

I've recently gotten pretty brutal with my own portfolio - I'm going to drop or clear at least 50% of it. They aren't bad names, but I don't want to keep renewing them for 10 years when I can use that money to get better names right now.

I've dropped prices on my clearance names to $199 and they are selling fast. I've moved 10+ in the last 30 days. Its nice to get those Afternic emails but its true - it takes a lot of $199 sales to make up for one retail sale. I'm not sure if I'm maximizing my yield or hurting it.

That said, I'm also not having to pay renewals on these names anymore and to me that's worth something. Every time I move a name for $199 I mentally add $50 to account for the 5+ years of renewals I won't be paying on that name.

Thank you @twiki for reporting some of your clearance sales lately. I'll try and do the same soon. Its tempting to only post the most impressive sales, but that paints an unclear picture for people trying to learn. It makes us think the best strategy is always to price for the highest possible sale, but cash flow is critical if you want to actually make domain investing your full-time business.

 

[twiki]

Thank you for the write-up. I'm struggling with this as well and really appreciate hearing your thoughts.

I've recently gotten pretty brutal with my own portfolio - I'm going to drop or clear at least 50% of it. They aren't bad names, but I don't want to keep renewing them for 10 years when I can use that money to get better names right now.

I've dropped prices on my clearance names to $199 and they are selling fast. I've moved 10+ in the last 30 days. Its nice to get those Afternic emails but its true - it takes a lot of $199 sales to make up for one retail sale. I'm not sure if I'm maximizing my yield or hurting it.

That said, I'm also not having to pay renewals on these names anymore and to me that's worth something. Every time I move a name for $199 I mentally add $50 to account for the 5+ years of renewals I won't be paying on that name.

Thank you @twiki for reporting some of your clearance sales lately. I'll try and do the same soon. Its tempting to only post the most impressive sales, but that paints an unclear picture for people trying to learn. It makes us think the best strategy is always to price for the highest possible sale, but cash flow is critical if you want to actually make domain investing your full-time business.

It depends on the names, really. These $199 sales keep your blood running hot, I know the feeling; but is it the right thing to do? I have strong doubts on that nowadays.

If your names are xxx range, or $1k max then yes $199 might help. This is because your prices now are good into the market, while not being dirt cheap (see caveat at bottom though)

If your names are say $1.7K-2k in value or more, then you're more likely hurting your sales. That is what I have observed. In such cases I tend to use a $750 or $999 sales price which is half price and the right buyer will jump on it.

Caveat for $199: Be aware that if the names are good, you're going to be far off in a few years in profits, if you renew them. Prices will increase a lot once this crisis goes away. I'd especially stick to any AI names in general.

I think focus of smart domainers now would be to BUY and HOLD best names possible; and not to look for current profits. Live off something else. Just keep your best names and buy a few great ones if possible. You will get dividends on the other side of the tunnel. (make sure these are 4-fig names or above though, high chance of sale, active niches... otherwise it's not worth it).

 

[okaydomains]

If your names are say $1.7K-2k in value or more, then you're more likely hurting your sales.

That's the rub, isn't it? We only get to sell each name once so its not really something we can test in a meaningful way.

Right now I can buy a pretty decent name for $200 at auction. I can buy phenomenal names at auction for $1200-1500. So I have to weigh keeping a basket of mediocre names for several years vs liquidating them right now for a great name. Would I rather keep this name, or have my choice of whats available at auction?

The crux is that I just don't love a lot of these names anymore, even though they have value. For me its a lot like coding - if I look back on code I wrote a year or two ago I find it horrifying. I think that's normal for people who are always improving their skills.

I've got 6000 names. They can't all be awesome. So in 2023, if a name gets rejected by SH and BB I'm taking a hard look at whether I am really going to be able to sell it. And if its a drop reg that I can sell for $199 or $499 and still get a 5-20x profit in under a year, I'm taking the deal.

In previous years I have been a "hold indefinitely for maximum value" domainer. I'm going to try being a "take the damn deal" domainer in 2023 and see how it goes.

Prices will increase a lot once this crisis goes away. I'd especially stick to any AI names in general.

Absolutely, there are some niches that I'm willing to hold longer as they are still rapidly developing (AI, space, biotech, and telemedicine are a few of mine).

Thank you again for being so open about your strategy, @twiki. Its so valuable to me, and I'm sure for others as well. I've learned so much from you.

 

[phaethon]

I think it's better to have 300 names you would definitely use to name your own company than having 5000 you would not use to name your company. That might sounds subjective, but that's what it is. Quality over quantity.
A good name always stands out and could eliminate hundreds mediocre names.

 

[okaydomains]

I think it's better to have 300 names you would definitely use to name your own company than having 5000 you would not use to name your company.

Certainly. I think we all agree that owning 300 good names is better than owning a bunch of trash, even if its a whole lot of trash.

But I would also say that 300 names is far too few for a full time investor. That's fine for a hobbyist, but I'm trying to sell a lot more than 5-6 names a year (I'm shooting for at least an order of magnitude higher).

Every name I have I bought because I thought it was a good name for a business or otherwise is valuable. But it's also clear that some names I have are better than others and some will take a long time to sell. It's healthy to reevaluate your portfolio and liquidate domains that aren't as likely to sell.

The time value of money is extremely important in any type of investment.

 

[twiki]

Thank you for the write-up. I'm struggling with this as well and really appreciate hearing your thoughts.

I've recently gotten pretty brutal with my own portfolio - I'm going to drop or clear at least 50% of it. They aren't bad names, but I don't want to keep renewing them for 10 years when I can use that money to get better names right now.

I've dropped prices on my clearance names to $199 and they are selling fast. I've moved 10+ in the last 30 days. Its nice to get those Afternic emails but its true - it takes a lot of $199 sales to make up for one retail sale. I'm not sure if I'm maximizing my yield or hurting it.

That said, I'm also not having to pay renewals on these names anymore and to me that's worth something. Every time I move a name for $199 I mentally add $50 to account for the 5+ years of renewals I won't be paying on that name.

Thank you @twiki for reporting some of your clearance sales lately. I'll try and do the same soon. Its tempting to only post the most impressive sales, but that paints an unclear picture for people trying to learn. It makes us think the best strategy is always to price for the highest possible sale, but cash flow is critical if you want to actually make domain investing your full-time business.

Quick question, how long after dropping price to $199 until they started selling?

 

[okaydomains]

Quick question, how long after dropping price to $199 until they started selling?

I saw about a 3 week lag before the first sale, and now they've started selling regularly (10+ in the last 30 days). A mix of .com, .xyz, and .io names.

I tried this price because I had already discounted a bunch of domains to $799, and didn't see the results I expected. I wanted to know if there was a price point at which they'd start to move. It seems I can sell names quickly at $199 - probably too quickly. I am happy with the sales but I'm definitely handing out some deals.

I've also priced another batch of [Keyword]App.com names at $499 and have sold one of those so far (out of ~100).

I'll continue to experiment until I find a way to properly scale.

 

[magnificentdomains]

Thanks for the info. I am curious about the <$500 pricepoint. I think the majority of investors with large portfolios are looking to sell around 1-2% of their inventory / year. I'm curious if at these lower pricepoints like 199, 299 etc you see something like upwards of 5% of your portfolio / year?

 

[twiki]

Thanks for the info. I am curious about the <$500 pricepoint. I think the majority of investors with large portfolios are looking to sell around 1-2% of their inventory / year. I'm curious if at these lower pricepoints like 199, 299 etc you see something like upwards of 5% of your portfolio / year?

It used to be even more than that, I've had 8% in the past at times... but that's years ago.

But now it is more tricky. You get some sales but it's hard to say whether that works or not.

Likely not profit - rather aiming at recovering some of the losses from expiring ones.

If you ask me, selling domains retail under $2K today is probably not feasible overall.

Edit: As an example. If you have a domain say at $1.2K but have doubts on it and expiry comes soon, it makes sense to drop it to $199 or whatever. This line of things. Not as a general rule of investing.

 

[magnificentdomains]

It used to be even more than that, I've had 8% in the past at times... but that's years ago.

But now it is more tricky. You get some sales but it's hard to say whether that works or not.

Likely not profit - rather aiming at recovering some of the losses from expiring ones.

If you ask me, selling domains retail under $2K today is probably not feasible overall.

Edit: As an example. If you have a domain say at $1.2K but have doubts on it and expiry comes soon, it makes sense to drop it to $199 or whatever. This line of things. Not as a general rule of investing.

That makes sense. I talked to a couple of guys at godaddy who favored the 1-3k pricepoint on premium names. That tends to be the ballpark most buyers don't mind putting on their credit card. It's worked very well for me over the years but always wonder what my results would be at higher/lower price points.

I would love a way to quickly run like a 7 day sale and instantly discount the BIN price of the entire portfolio by 40% or viceversa. I brought this up years ago and they said this functionality was on their radar but it doesn't look like it will be rolled out any time soon.

 

[okaydomains]

I would love a way to quickly run like a 7 day sale and instantly discount the BIN price of the entire portfolio by 40% or viceversa.

In the new interface you can bulk adjust prices by percentage. Can't do the timed discount though, at least not automatically. That'd be a great feature.

 

[magnificentdomains]

In the new interface you can bulk adjust prices by percentage. Can't do the timed discount though, at least not automatically. That'd be a great feature.

Wow! I did not see that in the new interface. It looks like you can only select a max of 500 domains at a time. Hopefully they will give us a select all domains option soon. Thanks!! The changing price by % is news to me.

 

[Recons.Com]

That's the rub, isn't it? We only get to sell each name once so its not really something we can test in a meaningful way.

Actually, you can test in a meaningful way if you have thousand+ names priced, let's say at $1500-2000 currently and giving around 1-1.5% STR.

Just take 500 of those randomly and price at $199 and another 500 (randomly) at $750 or $999. Let it stay that way for few months and see which bucket did better. Even better, if you also have the third bucket where the prices remained unchanged for benchmarking.

 

[magnificentdomains]

Actually, you can test in a meaningful way if you have thousand+ names priced, let's say at $1500-2000 currently and giving around 1-1.5% STR.

Just take 500 of those randomly and price at $199 and another 500 (randomly) at $750 or $999. Let it stay that way for few months and see which bucket did better. Even better, if you also have the third bucket where the prices remained unchanged for benchmarking.

I've done similar experiments. I tried taking a block of names and lowering them by 35%. I saw a big increase in sales and assumed those results to conclude that this was a better price point. But after more tests my data pointed to the increase in sales was due to the change in price not the actual price point. So for example let's say I had 5k names priced at 2.5k. Then lowered them to 1.75k. Evidently some of the names were on the radar of potential buyers and when they saw the big discount they pulled the trigger and bought. Initially I interpreted the data to mean that the lower price was better but more data has led me to conclude it was the actual price change.

This has me really excited about the new afternic feature to lower pricing in bulk by %. I can't wait... I just want them to add select all domains and not max 500.

 

[Recons.Com]

I've done similar experiments. I tried taking a block of names and lowering them by 35%. I saw a big increase in sales and assumed those results to conclude that this was a better price point. But after more tests my data pointed to the increase in sales was due to the change in price not the actual price point. So for example let's say I had 5k names priced at 2.5k. Then lowered them to 1.75k. Evidently some of the names were on the radar of potential buyers and when they saw the big discount they pulled the trigger and bought. Initially I interpreted the data to mean that the lower price was better but more data has led me to conclude it was the actual price change.

This has me really excited about the new afternic feature to lower pricing in bulk by %. I can't wait... I just want them to add select all domains and not max 500.

Interesting. I am wondering how long your test ran for the stage where you saw great improvement and how long for the stage where it flattened out. And also, how many names were involved?

Again, for pure comparison, one bucket of randomly selected names should remain unchanged. Then you can compare to both the increased phase and flattened phase. This would allow to weed out the possible seasonality or general economy effects.

 

[okaydomains]

Actually, you can test in a meaningful way if you have thousand+ names priced, let's say at $1500-2000 currently and giving around 1-1.5% STR.

Just take 500 of those randomly and price at $199 and another 500 (randomly) at $750 or $999. Let it stay that way for few months and see which bucket did better. Even better, if you also have the third bucket where the prices remained unchanged for benchmarking.

My background is not in statistics, but I don't think that's a big enough sample size or enough sales to produce statistically significant data, especially if you add a third bucket. I also don't think it's easy to find two equivalent names, especially when limited to your own portfolio.

It seems that the only people with enough data to produce useful results are the marketplaces. I'm not sure where that leaves us.

 

[okaydomains]

Evidently some of the names were on the radar of potential buyers and when they saw the big discount they pulled the trigger and bought.

This is one of the things I like awake at night wondering about.

If I lower the price and it sells, was the buyer someone who previously passed on the name because it was too expensive? Or did the earlier visitors see the high price and move on, never to return? Is it a brand new visitor who is now making an impulse buy? If so, would they have paid more?

I think we are not meant to know the answer to this, at least until we get better analytics from Afternic.

 

[Recons.Com]

My background is not in statistics, but I don't think that's a big enough sample size or enough sales to produce statistically significant data, especially if you add a third bucket. I also don't think it's easy to find two equivalent names, especially when limited to your own portfolio.

It seems that the only people with enough data to produce useful results are the marketplaces. I'm not sure where that leaves us.

I understand. That is why a large portfolio is important to draw meaningful conclusions. Marketplaces could have helped, but they seem to have no knowledge, desire or motivation.

Regarding equivalent names, that is not required. Let's say you have 1500 names that made 15 sales in 1500-2000$ range. That tells you that you have a decent portfolio of pretty much hand-reg to closeout quality. Now if you randomly distribute them into 3 buckets, all very good to bad ones within the mix would be pretty evenly distributed just because that is how random works across large sample. So all buckets would be the same initially and the only difference would be the new prices.

 

[twiki]

My background is not in statistics, but I don't think that's a big enough sample size or enough sales to produce statistically significant data, especially if you add a third bucket. I also don't think it's easy to find two equivalent names, especially when limited to your own portfolio.

It seems that the only people with enough data to produce useful results are the marketplaces. I'm not sure where that leaves us.

Here's about buckets,

I had split my portfolio this year in 2 buckets. 2000 were in bucket A, 3000 in bucket B. Sort of off numeric as it was by accident, but anyway.

Through 2,5 months, bucket A had no sales, while bucket B had several, in the tens range (all other sales actually in 4-fig range). Note, the names are not sorted by strength among the two.

Would you think that is accurate or not to draw some conclusions on?

Cause it's the same thing as running an 1000 names A/B test over 5 to 6 months.

(edited a bit for clarity)

 

[Recons.Com]

Here's about buckets,

I had split my portfolio this year in 2 buckets. 2000 were in bucket A, 3000 in bucket B. Sort of off numeric as it was by accident, but anyway.

Through 2,5 months, bucket A had no sales, while bucket B had several, in the tens range (all other sales actually in 4-fig range). Note, the names are not sorted by strength among the two.

Would you think that is accurate or not to draw some conclusions on?

Cause it's the same thing as running an 1000 names A/B test over 5 to 6 months.

(edited a bit for clarity)

I am not sure I understood what you are saying about the sales results. And also how exactly you split the names between the buckets.

If you split the names using random function in a software (excel or something else) and then either did not change anything else or changed the same, the results in the buckets should be proportionately similar.