analysis What am I missing on the supply side of domain pricing?

[smartynames]

Hi folks, I wrote a little blog post on domain pricing, from the perspective of a newbie. I think once I looked into the data, it became more apparent to me why domain investors not only want to sell domains for a lot of money, but basically have to in order to survive.

Can you let me know what am I missing? I am sure there's a ton I am still not understanding. Thanks!

https://smartynames.com/blog/business/NTJmOWIxNzAt

 

[karmaco]

You haven’t factored in that regs/renewals cost is rising each year 7% in September for at least a few more years. So in most cases the hand reg is more expensive to renew than it is to register.

Hand reg only is not a solid business model as you have illustrated . Even if good you will wait years for an end user in most cases.

You need to have some names with meat on the bones (age) to speed up the likelihood of sales. Those will run you more than ten bucks.

Better to have 50 good names than 50 mediocre ones. Quality matters even more with a tiny portfolio than a bigger one.

 

[bmugford]

Hi folks, I wrote a little blog post on domain pricing, from the perspective of a newbie. I think once I looked into the data, it became more apparent to me why domain investors not only want to sell domains for a lot of money, but basically have to in order to survive.

Can you let me know what am I missing? I am sure there's a ton I am still not understanding. Thanks!

https://smartynames.com/blog/business/NTJmOWIxNzAt

This part is pretty accurate -

"As you can probably see by now, it simply does not make sense to have a portfolio of domains and to sell them for cheap."

The only way you can sell domains for "cheap" is by having a much higher sell-through rate than average. The math does not work out otherwise.

Brad

 

[smartynames]

@bmugford thanks! Do you know if anyone has tried lowering the price to see if the rate goes up?
It feels like a potentially fruitful experiment, but requires convincing someone with 500+ domains to drop their prices for a year and see. I've not met anyone yet who would want to try.

 

[smartynames]

@karmaco how do you objectively assess that your names are good? I'd love to have a portfolio of 50, but if I buy them today and list them right away, it might still take years till I know what is selling and what is not.

Alternatively, I guess I could play a game of front-running hot topics, like AI, registering a handful of still available domains before the rush starts, then I'd know in a few months what was actually useful. But then again, it's very subjective and topic and time specific.

Lastly, is there a strategy for registering with a bot, and would the math look different for that one?

 

[VadimK]

Do you know if anyone has tried lowering the price to see if the rate goes up?
It feels like a potentially fruitful experiment, but requires convincing someone with 500+ domains to drop their prices for a year and see. I've not met anyone yet who would want to try.

People have been doing that. It's not that complicated if your portfolio has thousands names. From what I remember rate didn't go up at all...

Alternatively, I guess I could play a game of front-running hot topics, like AI, registering a handful of still available domains before the rush starts, then I'd know in a few months what was actually useful. But then again, it's very subjective and topic and time specific.

Nowadays that's what many of the domainers precisely are doing. Currently drops are bad and auction prices for something decent are hitting the sky... Find emerging trends and pair them with nice and popular words, forming an attractive combination. Months (and years!) later you'll find out if you hit that sweet g-spot. )))

 

[biggie]

it became more apparent to me why domain investors not only want to sell domains for a lot of money, but basically have to in order to survive.

Can you let me know what am I missing?

Hi

it depends on how much each domain sells for in your portfolio.... and how much was the acquisition cost for each domain.
then you add in renewal fees for the list.

once you've figured that out, then you'll have clearer picture.

if you're earning any ppc from those domains, then that can offset some or all renewal fees.

some may not profit this year or last, but they still survive, because there is some income/sales from their portfolios.

if i only have 150 domains and sell 4 for 5 figures total in one year and none the next, there is still enough revenue/profit to sustain going forward.

management is key, knowing what you have and... is it worth having and holding.


imo..