survey Domain Optimal Pricing Research - NP Survey

[Ostrados]

Hi,

I am currently doing a research on optimal domains pricing, the goal of the research is to:

1. Determine sell through rate (STR) for different pricing ranges
2. Derive a formula for the relationship between STR and Domain Price
3. Using formula from #2 we can make simulation for different pricing scenarios to find optimal pricing strategy
4. Ultimately deriving a domain pricing formula (in a separate future study).

This study requires a lot of data, I collected some data using Dofo, Sedo, Namebio.

Here is a sneak peak of what I got so far:

However the results I got are inconclusive, and I need more accurate data.

To get more accurate results I am asking Namepros community to help me collect more data, and for that I have created the following Survey:

https://freeonlinesurveys.com/s/OqGsfT2s

* The survey is totally anonymous there is no way to tell who sent it.

* The survey is for all extensions and not specific to .com

* The results of the study will be published at Namepros, I believe the results will be insightful for all of us.

* Contribution will be greatly appreciated especially from big portfolio sellers and from marketplaces that have enough data.

@Sedo @GoDaddy @DAN.COM @LaszloSchenk @GrantP @James Iles @DaaZ @aoxborrow
@AbdulBasit.com
@bmugford
@Recons.Com
@JudgeMind
@xynames
@twiki
@Acroplex
@Bob Hawkes
@Name Trader
@MadAboutDomains
@tonyk2000
@ResoluteDomains
@Leo Angelo
@Nikul Sanghvi
@TERADOMAIN
@Yusupbabay

...and all others please contribute.

Thanks

 

[Recons.Com]

BTW:

@Recons.Com said in another thread



Me explained in this thread:


Spot the difference!

But negativity must exist

Not sure what you mean here by "negativity must exist".

I kind of given up here, because I believe the problem lies in you not understanding correctly what price elasticity means, while that is what you are trying to measure...

You don't measure price elasticity of ALL cars together, as different cars are priced differently and they differ way too much and serve different audiences and markets.

You can measure price elasticity of THE car, buy doing a/b/c/d... tests for the SAME car at the SAME time to see how change in price (delta price) influences change in demand (delta demand). Based on this, you determine the optimal price that maximizes your revenue.

In case of someone's specific portfolio that is large enough (many many thousands), you can take all domains CURRENTLY priced the same and treat them as homogeneous. Then you can do delta price to check delta demand simultaneously and over long enough time. You can't replace this by treating current price levels as change.

Again, IT HAS TO BE THE ACTUAL CHANGE IN PRICE UP AND DOWN OVER N NUMBER OF MONTH.

There is no substitute or shortcut here. You will be just cooking numbers to suit your original hypothesis.

That is not how research works.

 

[Ostrados]

Not sure what you mean here by "negativity must exist".

I kind of given up here, because I believe the problem lies in you not understanding correctly what price elasticity means, while that is what you are trying to measure...

You don't measure price elasticity of ALL cars together, as different cars are priced differently and they differ way too much and serve different audiences and markets.

You can measure price elasticity of THE car, buy doing a/b/c/d... tests for the SAME car at the SAME time to see how change in price (delta price) influences change in demand (delta demand). Based on this, you determine the optimal price that maximizes your revenue.

In case of someone's specific portfolio that is large enough (many many thousands), you can take all domains CURRENTLY priced the same and treat them as homogeneous. Then you can do delta price to check delta demand simultaneously and over long enough time. You can't replace this by treating current price levels as change.

Again, IT HAS TO BE THE ACTUAL CHANGE IN PRICE UP AND DOWN OVER N NUMBER OF MONTH.

There is no substitute or shortcut here. You will be just cooking numbers to suit your original hypothesis.

That is not how research works.

Please don't twist the facts and please don't claim false things that I didn't say, no body is talking yet about prices changes we are still in PHASE1: STR RELATION, you can just go and read my replies carefully, and please refer to this:

Yes I know my first post was confusing, I explained in details in replies after that.

The objective of this study is to compare real life sales with portfolio pricing, to derive STR values for different price groups.

I will give simple example:

Lets say your portfolio consists of the following domains (numbers are just for illustration):

Groups	Type of Domains	Selling Price Range	STR
Tier 1	* Premium domains * One word domains ...etc	$30,000 to $100,000	??
Tier 2	* High value keywords * EMD domains .. etc	$15,000 to $30,000	??
Tier 3	* Strong value domains * Pronounceable LLLL ...etc	$5000 - $15,000	??
Tier 4	* Average value domains * GD Closeouts ...etc	$2000 - $5000	Maybe 1% to 2%
Tier 5	* Hand Reg domains * Obscure TLDs ...etc	$500 - $2000	Maybe 2% to 4%

What we know:

• The only known STR for us is for Tier 4 & 5, and we only have an approximate STR range.
• Unkowns: STR for Tiers 1,2 and 3.

Lets say I want to build strong portfolio with only Tier-1 domains where I will pay $10k+ on each domain acquisition. I want to make a feasibility study and find expected ROI in next 5 years. I can't do that without knowing the expected STR, if you ask anyone how much STR for selling $50k+ domains nobody will give you an answer.

You don't like this study? fine .. just ignore it. You can add me to your ignore list if you like.

Let's move on and thanks for your time.

 

[tonyk2000]

Optimal pricing? It strongly depends on portfolio imho. What works for one portfolio would not necessary work for another portfolio. One example. Buydomains .com has a large portfolio and they maintain "Just missed them" (recent sales) list right on their homepage. It shows that buydomains prefers to sell in low 4 figures range. It is their preference today, 01/21. They may well add extra zero tomorrow and will still sell some. They may set 50% discount next week and will definitely report more sales. Whatever their current preference is, imho it has little or nothing to do with other portfolios...

 

[David Day]

I contributed. Happy to help.

 

[Eric Lyon]

I just finished doing the survey, however, after doing professional appraisals for the last couple decades (More so in the last 6 years), it's become clear that STR and Sales Reports are not as reliable as they used to be. Especially since many sales reports stick, that actually fell through (E.g. buyer failed to pay at the venue the purchase was reported from or The sales report was falsified unethically in an attempt to leverage the report to sell the domain later referencing the falsified sale). I'm sure your survey will also get data input that isn't accurate from some claiming more sales than actually transpired for higher amounts than they actually sold for (The human condition of embellishing is as natural as that Big 5 pound Fish your buddy said they caught the other day at the lake, that was actually a tiny 1/2 pounder)

It's unfortunate that sales reports can not be counted on as much these days. I find that in as high as 95% of all the evaluations I do, that the majority of sales reports (Even those decades old) have never been developed by an end user and remain parked, landed, or do not resolve. Which questions the very essence of accuracy when it comes to "Genuine use case" examples of domains that resold to an end user (These are the most accurate STR's/Sales reports one should be leveraging when considering a domain assets value) - Investor/Reseller to End User and not Investor/Reseller to Investor/Reseller.

Even then, one can not use a single or even 2 variables (STR + Sales Reports) as a definitive or even remotely accurate way to establish a domain names value. A single variable change in a combination (E.g. adding or removing an "S", singular vs plural) can sometimes sway value on the scale greatly.

It is not advised to register or invest into a bunch of variant domains based on a single domain evaluation or variable source. Each variant change may or may not decrease or eliminate value completely.

Value can never be determined from a single point of research or variable. It's also important to understand the potential use of a domain asset in terms of monetization and revenue structure. This gives an inside look at what such an asset may be worth in a particular niche industry.

If you are dealing with a Brand asset of companies that may have been established prior to asset acquisition, you may want to consult with an IP/TM attorney in the country you reside. Most have 1 free consultation. Just to be sure, if you haven't yet.

Remember, at the end of the day, a domain name is truly only worth what a buyer and seller agree on.

In my opinion anyways. Everyone's different.

 

[Ostrados]

I would like to share this excellent eye opening info from Namebio (@Michael)

https://twitter.com/x/status/1621065221212368897

Here is the twitter thread in one text block:

If you're a domain investor you're definitely leaving money on the table. A story about price sensitivity...

For those of you who don't know, NameBio's sister company owns more than 70k domains. We BIN price all of them, and to do this initially we grouped them into seven price buckets based on GoValue, DotDB, and other metrics.

The bottom 30% of the portfolio was priced into three buckets: $1795 (20%), $1295 (5%), and $995 (5%). After three months of testing, this group of names was contributing 14% to our total sales by quantity.

As an experiment, for the next three months we combined those buckets into a single price point: $2195. Logically we were expecting fewer sales, but we wanted to see if the higher price could more than offset the decrease in STR.

But something shocking happened... the number of sales didn't decrease. The bucket was still contributing 14% to our total sales by quantity, except now it was contributing 38% more to our gross revenue.

Darpan noticed the same thing a few months later, that there is almost zero price elasticity at <$2k

That means a name priced at $500 has basically the same chance of selling if priced at $2,000. If you're pricing names below $2k - $2.5k, raise your prices up to that level. You shouldn't experience a meaningful drop in STR and you'll make more money.

Topics of pricing sensitivity, price elasticity and STR need more research and some generous publicity from big marketplaces like Afternic and Sedo.

 

[Ostrados]

Regarding my survey I still don't have enough responses (less than 20), I will post an update in few days.

 

[Ostrados]

FINAL UPDATE:

Unfortunately the collected data is very small and can't be used to derive any conclusive results.

I will continue the research privately and will continue to seek other methods.

Thanks for all who contributed