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Domain Princing using ROI and CR perspective

Labeled as discuss in Domain Buying and Selling Discussion, started by M0rd0r, Oct 17, 2020

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6
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335

  1. M0rd0r

    M0rd0r Established Member

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    Hi domainwizards!

    The last domain I sold on retail market was a 35.5 ROI. I was wondering if it is a really good ROI or not.

    Taking into account an hypothetic Conversion Rate of 2% I would have to price my domains, at least, with a Price of 50 ROI (Domain cost * 50)

    The fact is really difficult to me to choose names with adequate pricing ranges.

    Do you usully take into account this topic when you buying and pricing domain names?

    I think is really important to take into account to have a sustainable portfolio.

    Glad to read your opinions! :)
     
    Last edited: Oct 17, 2020
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  2. alcy

    alcy Top Contributor VIP

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    I think too much math is bad for everyone and kills soul things. as in joy... try to get rough figure for yer renewals .. compare to net yearly sales ...then based on that simple number and yer finances overall. figure out if u are where u need to be
     
  3. biggie

    biggie Top Contributor VIP ★★★★★★★★★★

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    Hi

    price is what you think it's worth.
    sales, is the price the seller and buyer agree to
    the ROI is the difference between seller acquisition costs + renewals (-) net profit received *
    * = any PPC income earned prior to sale.

    still, the focus:
    should be on making a profit, whether it's 10% or 1000% and then move on to the next.

    imo...
     
  4. M0rd0r

    M0rd0r Established Member

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    Yes I understand the concept, but the main question for me is...is the profit I can get for this domain enough to make my portfolio sustainable (the famous break-even point)?

    I have read lots of discussions here about this topic and as far I can understand, domaining is about:
    * Very (Very) Low Conversion Rates.
    * High ROI's

    So you can have a really really good portfolio with relative good conversion Rates or astronomic ROI's, but if you can't balance this equation you may have an issue, due to:
    * High costs of acquisition
    * Low prices

    Thanks for your replies.
     
  5. biggie

    biggie Top Contributor VIP ★★★★★★★★★★

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    Hi

    to me, if you read, then you have to read more, than just what makes a headline.
    as there is so much more in between the lines.

    for instance:
    one can have very high conversion rates or high str, while also sell at low roi's at same time
    as long as they can sustain their model, year after year... they get to stay in the game.

    on the other side of that unseen coin
    one can acquire domains at low cost or with a modest budget and garner high ROI's for them.

    however, if you look at domaining from a "flipper" mentality, then you won't vision the "wait time" needed to accomplish that.


    sustainability can be obtained, but not overnight
    startups can generate millions in revenue, but fail to show a profit.

    one sale, depending on quantity of domains and the amount the name sold for, could sustain the portfolio for this year, but what about the next five?

    also, depends on if you keep buying more names or if you let some expire or a combo of both.
    depends if you earn any $ from ppc or other monetization efforts.

    keep reading, but try not to read the generalities as specifics and don't take the specifics in general.

    imo...
     
  6. Ostrados

    Ostrados EpicName.com VIP

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    Focus on pricing your domain right, price should not be very variable, the variable should be number of domains you need to achieve target ROI within a set period of time. If you overprice your domains then STR will be lowered significantly, if you underprice your domains then your sales may not cover your costs. In both cases you will lose money! If you price your domains right and you still not making net profit then number of domains in your portfolio is low and you need to buy more domains.

    Also ROI is meaningless when you calculate it per domain, if you buy a domain for $1 and sell it for $100 then you have 100x ROI which is great but $99 is not enough to return your investment on all domains in your portfolio. And thus ROI should be calculated on portfiolio level not single domain level.
     
    Last edited: Oct 17, 2020
  7. M0rd0r

    M0rd0r Established Member

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    Hi @Ostrados ,

    Yes, totally agree.

    In my particular case my acquisition costs are almost no variance but I will change in the future so the problem is more complex.

    Thanks for your feedback.
     

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