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I have recently discussed some stuff about price flexibility in this article. ( Side note, it's probably useful not just to beginners, or at least as a refresh and check for some of us. )
Today I will address the entirely opposite approach: Sticking to full retail price (e.g. $3k or whatever your domain is max worth).
In this case, you stick to the top price you see the domain as being sold for, and you are willing to wait until the right buyer arrives. Which may be this year, next year or another year altogether.
There are pros and cons to both strategies, and choosing one against the other might not be easy. Especially until you have reached maturity and plenty of experience in domaining.
Because the big trick is, you have to price right. Very much so. Otherwise your chosen strategy might turn to failure. Too high, you don't sell. Too low, you lose money. But you can also get away with a higher price, if your budget is large and you have all the time at your disposal. Some domainers here have reached success with a very simple strategy: waiting, and renewing for several years.
So I'm going to outline here some possible cases and choices in this regard:
- If you usually buy lower or medium quality domains, sticking to xxx range (especially in the $100-300 range but sometimes above that depending on domain) can be your best choice. And If you're not 100% sure that your domains will sell in the 4-figure range, it might not be a good choice to stick to full retail.
Note: In my first year in domaining I sticked to that retail price for a very long time; I only sold a couple domains in that range for over 6 months and then I figured out my domains were overall worth much less. Then I managed to still get profit by discounting everything and getting fresh and better domains. But it was another time when good coms were much easier to reach... (edit: I was mimicking other successful domainers but I lacked the experience and a similar true value of domains.)
So if you overprice by accident, guess what, you might have just killed the golden goose. At least for this year's sales. If you're inexperienced, sticking to xxx range (and especially .coms) might be the safe path for you today.
- If you have a limited budget and need to eat today and to stay afloat, my recommendation is again to stick to a lower, discounted price. And even to discount more if the domain is approaching expiration and you're not prepared to renew it for whatever reason. Sell out everything, apart from some very good keepers, and buy new and better ones (based on recently acquired experience).
There are successful domainers here that do this, they discount and sell a lot before expiry, and I also do this (partially at least - as my own portfolio pricing is all over the board). It works, it keeps your mind relaxed as you see lots of sales. But as always, there's a tradeoff.
The downside of discount pricing is two-fold. And it's not the earnings you get. If you drop a price from 3k to 1.5k you will have roughly double the chance to sell it because the sales-through ratio increases significantly. So more or less the earnings are there.
The real problems with discounting are: 1) you deplete your inventory n times faster by selling them at 1/2 or 1/4 price etc; And 2) if your purchase/renewal prices are high, although income is good, you actually pay more overall in purchases and renewals; therefore you sum up much more such costs. End result is, overall you might be losing money.
This being said,
- If you purchase domains at a higher price, not just manual regs or very cheap ones, you probably need to stick to full retail pricing (4-fig range or above).
I would personally consider a $50 or more average price per domain to be quite high and demanding such full retail strategy. This differs of course from one domainer to another, but anyway. On the opposite side, hand regs are the cheapest as you only pay for the domain at registrar and no extras. And you might even be able to choose a good offer for that moment.
- Otherwise if you have a large budget, some available cash and you are able to renew domains for years, the obvious choice is full retail. Choose a good lander, set your retail price and be prepared to wait. As time goes by, those retail sales will cover your renewal costs and turn to profit.
Just make sure, as usual, your pricing is right. Fortunately, as I mentioned already, time will be in your favor here as the prices only increase over the years. This is especially valid with .coms.
Now in the ending part, I'm going to add some (rather important I'd say) notes regarding what I see happening lately and some market trends especially with .coms. Basically trying to glimpse a bit of what happens currently and especially next. This is personal observation; feel free to comment with yours.
I do have plenty of nice ngTLD sales today. So that's cool. But with .coms, I see that the market pressure has increased very much lately. gTLD sales have initially eroded the .com market in as similar fashion as, for example, altcoins have eroded bitcoin; however, in a similar fashion, .COM domains have not been dethroned, .com is still king and the demand is increasing a lot.
Please note that the first 100 ngTLDs will have had much more effect than 100 new today. For the sole reason that the available market has grown real fast back then. Right now, adding 100 new TLDs extra will not have that much impact as a %. Therefore, this also strengthens the case for .coms in my opinion.
Today you can see 5-fig .com sales for makeshift .coms, invented names, which were not really common in past years. Which is good to see - for us domainers. Doubled letters, -ly domains etc are going for high 4-fig and 5-fig all the time. This really tells the story - the market is growing and .com field is only going to get more scarce as time goes by.
Another issue I see is significant increased in competition on expired domains.
I have rather good success with that but it is pretty worrisome at least, for the future. I know my methods and strategies today will not yield the same quality in next years, as my former strategies are also outdated today.
Competition at drop has increased a lot, and lately a ton of domains that used to stay off the DropCatch reach are being snapped right away. And not only DC and SnapNames do this; but there's an entire flurry of various registrars focusing on dropcatching that also get such names; which are much more active nowadays in comparison with what they used to be. They didn't use to be so visible. Second-level names get snapped by them.
So guess what, your everyday backorder at the everyday registrar might be useless soon, due to such increase, unless you aim for really crappy domains which obviously is not a good choice.
Been following auctions as well.
Here it pays off to be a veteran with large budget; as there's a ton of money with domains that you pay say 8k for one at auction but sell it a few years later for 40k or 100k.
But that's obviously not for everyone. For everyday domains, I see prices going far beyond the profitable point for most domainers, far more than it used to be. Often they are sold at a loss, meaning if you sell it today, you barely make what you paid for it at auction.
But there's a trick - of course: Whoever buys it like that, perhaps overpriced, makes an investment. I mean the ones that know exactly what they pay for. They are prepared to hold it as long as necessary, until .com prices increase. And that is a rule of nature; the more a demanded resource gets scarce, the more it is being increased in price. This is why some investors are buying at high price today; if they have budget for it, it's somewhat similar to a gold investment or some other rather safe resource to have your money saved in.
This being said, my final advice is this: If you can afford, price high and stick to that price, and be prepared to stick to it for years to come. This is for folks with a budget. Today you will probably make little, but long term this will make the difference for you.
The truth is, by selling out your domains for cheap today (especially .coms which are to be regarded as crown jewels) will keep bank happy today, but make the future far less bright. In the end, it's a trade-off for being belly full today and being perhaps rich or anyway belly full in the near future. I do remember some good names I let go for too cheap and still kinda miss them - sometimes as a fleeting sentiment.
I have just mentioned here what I observed. The choice is obviously yours. Make that choice wisely, and share your learning with us. Good luck with your purchases and sales!
Feel free to comment, I'm always glad to learn from your experience and so are others here. Thanks for reading!
Today I will address the entirely opposite approach: Sticking to full retail price (e.g. $3k or whatever your domain is max worth).
In this case, you stick to the top price you see the domain as being sold for, and you are willing to wait until the right buyer arrives. Which may be this year, next year or another year altogether.
There are pros and cons to both strategies, and choosing one against the other might not be easy. Especially until you have reached maturity and plenty of experience in domaining.
Because the big trick is, you have to price right. Very much so. Otherwise your chosen strategy might turn to failure. Too high, you don't sell. Too low, you lose money. But you can also get away with a higher price, if your budget is large and you have all the time at your disposal. Some domainers here have reached success with a very simple strategy: waiting, and renewing for several years.
So I'm going to outline here some possible cases and choices in this regard:
- If you usually buy lower or medium quality domains, sticking to xxx range (especially in the $100-300 range but sometimes above that depending on domain) can be your best choice. And If you're not 100% sure that your domains will sell in the 4-figure range, it might not be a good choice to stick to full retail.
Note: In my first year in domaining I sticked to that retail price for a very long time; I only sold a couple domains in that range for over 6 months and then I figured out my domains were overall worth much less. Then I managed to still get profit by discounting everything and getting fresh and better domains. But it was another time when good coms were much easier to reach... (edit: I was mimicking other successful domainers but I lacked the experience and a similar true value of domains.)
So if you overprice by accident, guess what, you might have just killed the golden goose. At least for this year's sales. If you're inexperienced, sticking to xxx range (and especially .coms) might be the safe path for you today.
- If you have a limited budget and need to eat today and to stay afloat, my recommendation is again to stick to a lower, discounted price. And even to discount more if the domain is approaching expiration and you're not prepared to renew it for whatever reason. Sell out everything, apart from some very good keepers, and buy new and better ones (based on recently acquired experience).
There are successful domainers here that do this, they discount and sell a lot before expiry, and I also do this (partially at least - as my own portfolio pricing is all over the board). It works, it keeps your mind relaxed as you see lots of sales. But as always, there's a tradeoff.
The downside of discount pricing is two-fold. And it's not the earnings you get. If you drop a price from 3k to 1.5k you will have roughly double the chance to sell it because the sales-through ratio increases significantly. So more or less the earnings are there.
The real problems with discounting are: 1) you deplete your inventory n times faster by selling them at 1/2 or 1/4 price etc; And 2) if your purchase/renewal prices are high, although income is good, you actually pay more overall in purchases and renewals; therefore you sum up much more such costs. End result is, overall you might be losing money.
This being said,
- If you purchase domains at a higher price, not just manual regs or very cheap ones, you probably need to stick to full retail pricing (4-fig range or above).
I would personally consider a $50 or more average price per domain to be quite high and demanding such full retail strategy. This differs of course from one domainer to another, but anyway. On the opposite side, hand regs are the cheapest as you only pay for the domain at registrar and no extras. And you might even be able to choose a good offer for that moment.
- Otherwise if you have a large budget, some available cash and you are able to renew domains for years, the obvious choice is full retail. Choose a good lander, set your retail price and be prepared to wait. As time goes by, those retail sales will cover your renewal costs and turn to profit.
Just make sure, as usual, your pricing is right. Fortunately, as I mentioned already, time will be in your favor here as the prices only increase over the years. This is especially valid with .coms.
Now in the ending part, I'm going to add some (rather important I'd say) notes regarding what I see happening lately and some market trends especially with .coms. Basically trying to glimpse a bit of what happens currently and especially next. This is personal observation; feel free to comment with yours.
I do have plenty of nice ngTLD sales today. So that's cool. But with .coms, I see that the market pressure has increased very much lately. gTLD sales have initially eroded the .com market in as similar fashion as, for example, altcoins have eroded bitcoin; however, in a similar fashion, .COM domains have not been dethroned, .com is still king and the demand is increasing a lot.
Please note that the first 100 ngTLDs will have had much more effect than 100 new today. For the sole reason that the available market has grown real fast back then. Right now, adding 100 new TLDs extra will not have that much impact as a %. Therefore, this also strengthens the case for .coms in my opinion.
Today you can see 5-fig .com sales for makeshift .coms, invented names, which were not really common in past years. Which is good to see - for us domainers. Doubled letters, -ly domains etc are going for high 4-fig and 5-fig all the time. This really tells the story - the market is growing and .com field is only going to get more scarce as time goes by.
Another issue I see is significant increased in competition on expired domains.
I have rather good success with that but it is pretty worrisome at least, for the future. I know my methods and strategies today will not yield the same quality in next years, as my former strategies are also outdated today.
Competition at drop has increased a lot, and lately a ton of domains that used to stay off the DropCatch reach are being snapped right away. And not only DC and SnapNames do this; but there's an entire flurry of various registrars focusing on dropcatching that also get such names; which are much more active nowadays in comparison with what they used to be. They didn't use to be so visible. Second-level names get snapped by them.
So guess what, your everyday backorder at the everyday registrar might be useless soon, due to such increase, unless you aim for really crappy domains which obviously is not a good choice.
Been following auctions as well.
Here it pays off to be a veteran with large budget; as there's a ton of money with domains that you pay say 8k for one at auction but sell it a few years later for 40k or 100k.
But that's obviously not for everyone. For everyday domains, I see prices going far beyond the profitable point for most domainers, far more than it used to be. Often they are sold at a loss, meaning if you sell it today, you barely make what you paid for it at auction.
But there's a trick - of course: Whoever buys it like that, perhaps overpriced, makes an investment. I mean the ones that know exactly what they pay for. They are prepared to hold it as long as necessary, until .com prices increase. And that is a rule of nature; the more a demanded resource gets scarce, the more it is being increased in price. This is why some investors are buying at high price today; if they have budget for it, it's somewhat similar to a gold investment or some other rather safe resource to have your money saved in.
This being said, my final advice is this: If you can afford, price high and stick to that price, and be prepared to stick to it for years to come. This is for folks with a budget. Today you will probably make little, but long term this will make the difference for you.
The truth is, by selling out your domains for cheap today (especially .coms which are to be regarded as crown jewels) will keep bank happy today, but make the future far less bright. In the end, it's a trade-off for being belly full today and being perhaps rich or anyway belly full in the near future. I do remember some good names I let go for too cheap and still kinda miss them - sometimes as a fleeting sentiment.
I have just mentioned here what I observed. The choice is obviously yours. Make that choice wisely, and share your learning with us. Good luck with your purchases and sales!
Feel free to comment, I'm always glad to learn from your experience and so are others here. Thanks for reading!
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