sales Don't Shoot for the moon

[equity78]

Rob Monster of Epik recently started an interesting discussion over at NamePros about “shooting the moon” when selling your domains. Basically the premise was that you don’t know how much the buyer would be willing to pay, so you might as well ask for an astronomical number and see what happens.

After all, you can’t get a high price if you don’t ask… right? Plus you can always offer a lease as a cheaper alternative, or you can walk your price back down.

For 99.99% of you this is terrible advice. Why?

Read more at Namebio

 

[Michael]

I think "Shoot the moon" is different for each person. My "Shoot the moon" is anything 100x for handeg and 10x for anything over $500, 5X for anything in the low thousands...etc

This. Exactly this. We've been working on an AI appraiser that might never see the light of day. But the idea is to only look at wholesale sales and come up with a wholesale valuation, and then use that to calculate a retail range. You've closely described my formula for converting wholesale to retail, although it needs to be an equation and not stepped. But the basic idea is the same, the higher the wholesale value the lower the multiple, with a very high multiple at the low end of the spectrum.

Your pricing model is not a moonshot at all, it's perfectly practical and realistic. A moonshot is a price that has an extremely low probability of being accepted, not about the multiple. Like replying with "similar names routinely sell for six figures" for completely average or even low-quality names. Great way to kill every inquiry instantly. Asking $1-2k on a hand reg is not a moonshot, even though it is a 100x+ return.

The main point is that if you ask for extremely low-probability prices on every inquiry you're never going to make a sale, or if you do it will take a decade or more. That's just statistics. Most people will have given up by then. Just do it on a small percentage of your portfolio if anything. It's also not that easy to walk back a price from "six figures" to $5k either. The buyer won't take anything the seller says seriously at that point, and it makes the seller look inept and weak. So it isn't really the case that the seller can just come down significantly without any harm done, so might as well start off crazy and hope to get lucky.

You must be making sales given your sensible approach to pricing and the quality of names in your signature. It's immediately clear that you understand this business better than most.

I agree with Michael's take on this. It is very similar to mine in the shoot for the moon thread.

Buy, sell, rinse, repeat is the model that works for many profitable domain investors.

The key here is a model needs to be repeatable. Outliers are not repeatable.

Brad

You are exactly the type of investor that people should be looking up to and trying to replicate, not the people who got in extremely early and are playing a different game entirely. I would imagine many of my thoughts and beliefs about this industry where influenced by watching you do your thing over the years.

 

[biggie]

Hi

it's good to shoot for the moon

if.... you have the type of domain names that will fuel the launch

and sure, you can copy an email template, but you can't copy the names that got sold using it.

so, if the name doesn't stand-up, then the campaign will fail.



imo...

 

[bmugford]

I agree with Michael's take on this. It is very similar to mine in the shoot for the moon thread.

Buy, sell, rinse, repeat is the model that works for many profitable domain investors.

The key here is a model needs to be repeatable. Outliers are not repeatable.

Brad

 

[Ategy]

Everybody needs to remember that this is all a numbers game.

Rule #1 = When you combine all your sales vs all your costs, at the end of the year you need to be profitable.

Beyond that, a lot depends on the specific domains and your style.


With bigger portfolios you will definitely get more sales with lower prices .. guaranteed. But will those sales combine for more than the one "moonshot"? My guess is that some years yes .. and some years no!


The good/bad thing with Rob's perspective is that it's not the same scale as us. He views volume sales at the registrar level .. where indeed moonshots do happen. He's not BS'ing .. some people pay "astronomical" (beyond the moon) prices for questionable domains most wouldn't even bother to handreg.

But on the opposite side is that amount the moonshots .. are countless tens/hundreds of thousands ++ domains that don't get sold.

Epik might indeed see 1-2 $100k+ sales a month .. but if you pro-rate that to domainers with 100-1000 domains, it could take a decade or more before ever seeing one.


I think the best thing you can do is tier your portfolio .. do moonshots only with your top tier .. for the rest be reasonable and make sure you end the year with profit!

 

[Federer]

Some of the best advice I have seen, period.
"list all of your domains for sale on Afternic and Sedo, price most of them and make it a reasonable number, and opt them into the MLS/DLS so they get into the registration path. If you do that you’ll be ahead of most domain investors, and well on your way to growing your portfolio."

 

[oldtimer]

The premise of Shooting The Moon is not based on the Quality of your domain, but rather on the fact that an End User that you don't know anything about might have fallen in love with the specific domain that you might have and that they want it at any cost. Although the chances of such scenario might increase if you have a premium domain name, but that might not necessarily be the main requirement since the most important factor is how suitable your domain is to the specific needs of an End User who thinks that your domain is what they have to have. It happens to all of us when something catches our eyes that we have to have and that we are willing to pay more to get it as the price might not be the most important factor for us in that case. Perhaps that's why some paintings sell for astronomical prices or that some people pay thousands of dollars more to see their favorite concerts or sports games.

The only way to know whether this method is going to work for you or not is to try it for a while provided that you can afford the wait, and remember you have to overcome three major obstacles to get to the Moon, first you have to get an offer on one of your names which doesn't happen that often for most domainers and then you have to gamble on whether the person who has made the offer has sat their heart on having the specific domain that you have and that they can't do without it. You also have to gamble on whether the buyer who has fallen in love with your domain has a lot of money to spare. If all the stars line up correctly you might be able to get to the Moon after all, but you might want to have another strategy in place in case if they don't.

PS: The more specific the domain is that you have gotten an offer for perhaps it is better justified to Shoot The Moon for it.

IMO

 

[Soofi]

This made my day @Michael

For most of you, if you shoot for the moon you’re going to end up missing and floating around in space until you suffocate.

 

[LarryDomain]

I think "Shoot the moon" is different for each person. My "Shoot the moon" is anything 100x for handeg and 10x for anything over $500, 5X for anything in the low thousands...etc

Any name you register has the ability to "Shoot the moon". So don't let anyone tell you to not shoot for the moon!

Since we talking about Shoot the moon! Does anyone know where to play Spades?? I miss playing on Yahoo!!

 

[Bob Hawkes]

Thank you for the outstanding analysis and article @Michael. By taking the time to do this you will no doubt make a positive difference to countless domain investors who take your message to heart and respond accordingly. Sincerely thank you, both for this article and the outstanding NameBio.

Also very interested to hear of your future AI project related to wholesale and retail pricing.

Thanks again,

Bob

 

[LarryDomain]

Yep, shoot the moon on all of it!! Even the 20 character names! Who else knows the value of your domain better than you??

 

[NickB]

I’m shooting for the moon on most of them.

Tell NameBio CEO to focus fixing reporting unconfirmed sales (higher price = more work)

Samer

I read a lot of your posts and they are very positive regarding Rob and you seem quite defensive when it comes to him, but you why you feel the need to post sly digs about someone who provides a constructive alternative to his suggestion is beyond me.....

 

[frank-germany]

I’m shooting for the moon on most of them.

Rob’s post provided best email outline, i saw
i recommend all copy, cuz i had a hard time writing email to any interested buying my DN.

Dont take “shoot moon” literally, pick ur price

He went above and beyond, by proved email outline for his past successful transactions,
(you can use your own prices, not “moon” price

Tell NameBio CEO to focus fixing reporting unconfirmed sales (higher price = more work)

Samer

I wish you all the luck to shoot to the moon, Samer.
It's not impossible you may hit it

they did it in `69
so why wouldn't you?

 

[frank-germany]

please stop shooting to the moon!

here is what you have done to the moon already:


enough is enough!

https://www.shutterstock.com/video/clip-8624773-flying-over-moon-surface-view-spaceship-close

 

[Nikul Sanghvi]

But the idea is to only look at wholesale sales and come up with a wholesale valuation, and then use that to calculate a retail range. You've closely described my formula for converting wholesale to retail, although it needs to be an equation and not stepped.

Michael - I loved this article, so first of all, thank you for writing it...

I run a very similar stepped model. The multiples need some revision but it's roughly like this: https://twitter.com/hypernames/status/1122780585125130245

I think it would be interesting to see your equation run in the opposite direction, using a high/medium-probability retail value to determine a wholesale price range. Then the purchase becomes the theoretical point at which the money is made.

If investors don't use enduser prices to determine wholesale values, a few things could happen:

• Higher chance to overpay for the acquisition at wholesale = poor deployment of capital
• Once an investor has overpaid at auction/wholesale, a static multiple (like 10x/100x) forces a low-probability retail price (moonshots) and a weaker sell-through rate
• If end-user prices are static, but domains are getting more expensive on aftermarket, margins will become tiny.
• If we ignore end-user prices and trade on wholesale only, domains will end up getting used as a store of value. Then we get stuck in an asset bubble, passing money around to each other.

 

[NickB]

my biggest issue in this industry is coming up with email outline, Rob provided1 free.
a damn good one
respectfully disagree

You respectfully disagree with what? This is not about a free email outline (there are other threads on Namepros regarding this) this is about your blinkered approach when it comes to discussing alternatives to his thinking....

It might of connected with you, but disregarding everybody elses advice and experience and blindly following one person is a dangerous game. You should try and keep an open mind.....

 

[equity78]

What does it mean by the "registration path"? Does this mean it shows up on other registrars sites when people search for the name and reg it on that site?

When you list at Afternic for instance, your names (well for com,net,org) will show in the registrar path at GoDaddy.

So anyone doing a search will see your name, with the price you picked.

 

[barman]

I'm shooting for the moon, or as I like to call them "Hail Mary"s on a small portion of my names, the best ones, that I'm willing to hold onto for a decade or longer.

The rest - I'm taking a much more reasonable approach, similar to @Nikul Sanghvi 's chart. I've had plenty of "down to earth" sales, which has kept me in business.

Still waiting on my one moon shot though!

 

[NickB]

Great advice and a very good read

I am shooting for the moon on a very small percentage of my names (mainly the Defi ones) the rest I am very realistic, if a reasonable offer comes in then I am happy to move it on and not be sentimental about it.

You have to try and keep moving forwards and to do that in this industry you need sales to pay for those renewals and to keep adding the right inventory (easier said than done!)

 

[frank-germany]

the advice of somebody who lives domain name sales data
day in and day out

should be taken seriously

the advice of 3rd parties
not backed by any data
other than
"I've done it frequently"

well .. you guess it

and listen:
who of these 2 guys is selling stuff to you?

 

[equity78]

I had rather said that I will "shoot the moon" as well as I will note his advice.

here are some name reported on his own namebio.

commercialsearch.com 30,000 USD 2019-11-05 Sedo
gambling-law-us.com 57,000 USD 2019-11-04 GoDaddy
recipe4living.com 40,500 USD 2019-10-25 GoDaddy
blog-city.com 30,500 USD 2019-10-17 GoDaddy

if the above name cant fit on "shoot the moon" then I must say he should remove this sales as it may be fake.

there is nothing wrong here for asking price at what you want to sell

Nobody shot the moon there, they were expired auctions purchased for back link profile, no one sold them by shooting the moon.

 

[topdom]

Let Epik do negotiation on your behalf when an offer comes. Then it may work. Shooting the Moon is usually not possible because we are usually dealing with flippers, and don't know it.

Domainers sell to flippers, flippers sell to endusers. When endusers don't pay, flippers don't pay either and you may be surprised why a very low 200 USD was not paid for this great domain when there is 5 figure potential.

 

[branding]

One of the sanest articles on domaining I have read in ages. Thanks for sharing. Bookmarked for future reference!

 

[Blitzpotz]

It is so silent here. Everybody waiting for a statement by Rob Monster?

However, if I remember correctly the other thread ended similar to the message of the article here which is another Best-of-Namepros.
It resulted like You need a great domain name to come anyhow near the moon, but if you are an unknown domainer you probably will never shoot it.
That´s why I like the comparison to Mr. Mann´s sales, because let´s face it: Those reports about him or Mr. Schwartz or the Costello Brothers or other VIPs are tempting and able to create too high expectations.

The key here is a model needs to be repeatable.

Great conclusion which reads so easy but isn´t. Personally I´d be happy to identify those never selling domains much earlier as I do now to remove ballast from my (pseudo) moon rocket park. I know 80% or more of my names will never sell - but which ones?

 

[Michael]

Michael - I loved this article, so first of all, thank you for writing it...

I run a very similar stepped model. The multiples need some revision but it's roughly like this: https://twitter.com/hypernames/status/1122780585125130245

I think it would be interesting to see your equation run in the opposite direction, using a high/medium-probability retail value to determine a wholesale price range. Then the purchase becomes the theoretical point at which the money is made.

If investors don't use enduser prices to determine wholesale values, a few things could happen:

• Higher chance to overpay for the acquisition at wholesale = poor deployment of capital
• Once an investor has overpaid at auction/wholesale, a static multiple (like 10x/100x) forces a low-probability retail price (moonshots) and a weaker sell-through rate
• If end-user prices are static, but particular domains are getting more expensive on aftermarket, margins will become tiny.
• If we ignore end-user prices and trade on wholesale only, domains will end up getting used as a store of value. Then we get stuck in an asset bubble, passing money around to each other.

The model seems very reasonable to me, good stuff. The only reason I don't have it stepped is it gets weird at the edges, like a $999 acquisition might be priced quite a bit off from a $1,000 acquisition.

It wouldn't work in reverse though because retail prices don't have predictive value, you need to solve for wholesale and then extrapolate to retail. I'm just talking from an AI perspective though. You could certainly look at a name on auction and say to yourself "I think that could reasonably sell for $25k retail, I'm willing to pay around a grand for it." But it wouldn't work for an AI to try to guess at retail and work back to wholesale, there's not enough data and it's too random.

That's why I believe automated appraisers are crap right now, they don't exclude retail and it muddies the waters to the point where it all becomes nonsense. It's even hard for a human to peg a retail value, if you ask 10 experts you'll probably get 10 different answers. Used to happen all the time on DomainSherpa's Guess that Price segment or whatever it was called, guesses were all over the place.

I agree though, domainers need to give more thought about retail valuation when buying. Many are just bidding because others are participating, and are buying names for a grand or more that aren't likely to sell to an end user for more than a few grand. That doesn't work if you're only selling one out of every few hundred names. Perhaps they are just banking on the wholesale value going up so they can flip it, which as you say leads to a bubble. It works for massive buyers who are only trying to grow their top line though and are ok with a 10-year ROI, and they're squeezing the margins to the point that the little guy can't play.

I think we've been there for 2-3 years now actually. End user prices are not keeping up with the growth in wholesale prices, not by a long shot.