discuss What percentage of your portfolio do you sell per year?

For now 0 its been just a month since i reg my first domain but now i have 400 of them, its addictive...

Even i just had 1 offer and it was scam :D

But yes this thread is good i am curious about professionals statistics here.

Lets see.

1% to 3 %

Yep. 1-3% seems about right. I'm trying to improve that %age by dropping my crap domains This might not exactly answer your question because this if for my whole portfolio. I do have domains in myportfolio that I've paid >$25 for (even as much as $$$$ for), but probably not enough to skew the percentage significantly.

Probably at least 65% - 75% of my acquisitions are sold within the first year. My model is to get names sold price paid + profit, whether that profit be $1 or $1000 within the first year of owning it (depending on the name) and domains with 2 months or less left before renewal get top priority for being marketed. I really hate to see domains drop or be renewed, if I reg'd it it had a purpose. I don't acquire something unless I feel it can be sold or I have a plan for it myself. Liquid names get renewed with no rush to pass on, but I'm all about cash-flow. My buyers get some really fair deals which accounts for the ratio.

For now 0 its been just a month since i reg my first domain but now i have 400 of them, its addictive...

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Ouch, thats going to hurt at renewal time

You should only reg around 5-10 names in your first year and see if you can sell any first, then use the profits to buy more

I used to sell a lot of names on the forums to other domainers, which gave a much higher percentage turnover but a lot less total monetary return.

Now I only sell to end users, giving about a 2% sales but a greater monetary reward

Depends on the price range. If it is $xx-$xxx than it is around 5-10% for higher range it is around 1%
Bought once over 100 domains in bulk and sold them all in a week with over 300% net win :D

40% of my domains sold in a year.

In my first year I sold around 10 to 20 domains with a portfolio of 50-60 domains (including 10-12 domains grabbed for free).. some domains sold at too cheap some at good price.

I think sales percentage really doesn't matter, what matters the most is profit percentage.

Two different portfolios with 100 domains at $ 2 each.

first one sells 50 domains at $2 in whole year
and second one sells just one domain at $300 in last month of the expiry.

so first one is definitely active but second one is profitable. After all it's part of everyone's strategy.

serhatkotan said:

For now 0 its been just a month since i reg my first domain but now i have 400 of them, its addictive...
...

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'''' ..more proof the real money in domaining is in being a registrar. good grief.

I sell 1.3% of my names per year (total of 84 names sold since mid 2012). Average sale price is $760. Highest sale was $4,195 but that is an outlier. Most "high" sales are $1,995. Most lower end sales are $395-495. Sales have slowed recently. If Q4 doesn't pick up 2015 will be my worst sales year since 2012.

Most were hand regged but some were drops. Started business 4 years ago and it just about breaks even year over year. Way too much work for a break-even business. I started with 2,000 names and now have about 1,100. I intend to cut that number in half next year (letting 1/2 drop) as I wean myself down to only my most perceived valuable brandables. I am no longer acquiring names of any kind.

Have learned I hand reg too many names. Drops and buying names are very addicting. Need to be super careful when buying or regging. I am much better at hand regging and selling brandables over Geo. I only targeted brandables over the past 18 months but have stopped buying altogether as I whittle down portfolio.

I did a lot of price testing over the years. Lowering prices has no affect on sales. It appears the market is inelastic. Granted 98% of my domains are priced $1,995 or less with the bulk being in the $495-$995 range. Perhaps these prices have to do with the inelasticity. Or perhaps selling brandables is like throwing darts. I'm just waiting for someone else to dream up the name I own.

This is a more seasonal business than I initially thought. The first 6 months of the year clearly outweigh the 2nd half for sales. Jan-Apr are the high season for new sales with May-July being decent. Aug/Sep is dead season - almost no sales whatsoever. Nov/Dec rivals Aug/Sep as a very slow season. Only October shows some life in the back half of the year.

Almost all sales are via GoDaddy Premium. A very small # sell through Sedo. I have used GoDaddy Auctions and NamePros auctions but the prices sold are terribly low. These latter outlets only make sense if trying to recapture some of the money spent rather than make a profit imo. And both require too much work to do it.

Would be open to selling my whole portfolio in lump but unsure how best to find a buyer. Too much work to list separate names on NamePros. Perhaps I could try Flippa to move the whole lot.

It is generally understood that typical domainer portfolios turn 1% - 2% annually and SEDO reports show a median sales price of $600 on its platform. Platform sales require payment of a commission. Of course there are individuals who have higher turnover with low-dollar sales, or who make money via parking and website development or who sell domains for no less than five figures which pays for a lot of renewals. Regardless even if your entire portfolio is acquired reg fee...

100 domains x $10/year = $1000 in renewals
Commissions 15-20% on most platforms
If turnover is only 1% (one domain) you need a $1250 sale just to have breakeven cash flow

Backorders and auctions provide a means of acquiring higher-quality inventory but the investment is much higher. In finance, return on investment analysis involves discounting anticipated future cash flows at a discount factor which considers investment risk and breaking even will not be acceptable. The 95%+ of your portfolio which does not sell every year must either be renewed entailing additional cost or you suffer a 100% loss.

After nearly ten years in this industry I have to admit I don't see evidence of increasing acceptance of end users being willing to pay premium prices for domain names other than the LL / NN and one-word .COM domains that get all the press on weekly reports. As an accounting/finance professional I know that even small companies spend thousands of dollars on all kinds of routine expenses - advertising, professional services, travel, IT costs, etc. I have seen a large company which spends seven figures annually on IT costs and professional services registering newbie-quality handregs for projects. Domains as brands are still years away from mass acceptance which is why I think the launch of hundreds of nTLD is BS. End users are balking at paying for aftermarket domains even in .COM or older extensions such as .Net and .TV. So I refuse to pay end user prices and premium renewals for extensions which may never gain market acceptance and hope that some day maybe things will work out.

I have never been one to bid very aggressively in domain auctions - relying more on backorders, forums and experience to acquire better domains. In ten years I have only had four sales over $1500 with most sales low $XXX but a lesser number mid to high $XXX and occasional sales of $995-$1500. Total turnover is better than industry average but still less than 5% and the business of investing in domain names for resale is NOT one I would recommend to a good friend. Post 2010 I have seen domain sales over $500 to be much more difficult which again is why I believe the nTLDs are BS as investments.

garptrader said:

In ten years I have only had four sales over $1500 with most sales low $XXX but a lesser number mid to high $XXX and occasional sales of $995-$1500. Total turnover is better than industry average but still less than 5% and the business of investing in domain names for resale is NOT one I would recommend to a good friend. Post 2010 I have seen domain sales over $500 to be much more difficult which again is why I believe the nTLDs are BS as investments.

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Agreed. Interesting that you have had only 1 sale over $1,500. 21% of my sales were over $1,500 (18 of 84 sales). However of these 1/3 were domains I hand regged in 1999 and held for a long time (hard to replicate if you're just entering the biz today). Of the remainder 1/3 were drop catches or auction purchases (i.e., names that others previously found valuable and I agreed and scooped up). Leaving the remaining 1/3 hand regs within the past 4 years.

Since I cannot replicate the 1999 hand regs going forward (ahhh, if only I had more money back then!) removing those leaves me with only 12 sales over $1,500 of which half require a significant investment (as getting names via drops and/or GD Auctions requires more spend than hand regs). Generally I spent ~$70 on average acquiring names via those methods (not high - but 10x higher than the $7 average on hand regs). Once I realized the sales of drops/auctions weren't much higher as a % of my hand regs, I stopped acquiring names that way. However, without the GD Auctions & drop acquisitions the volume of sales has dropped significantly and that makes the business much smaller revenue wise than I'd like.

Finally I agree with you again that nTLDs aren't the way to go. Some may find niche success but clearly .com is the the bread/butter of the business.

It is my guess that the move to mobile and apps are hurting sales of domains. Companies just don't find a web presence as valuable as an app presence. But this is just an opinion and the data I have does show the same # of domain sales year over year for the past 4 years so not sure why I'm feeling that way.

Hello,

The last 365 days I've sold 85 domains. That's about 10% of the portfolio.

In 2016 I will slim down the portfolio to exactly 550 names (of which 50 of them are in a "kill zone"). If I buy a new domain, I will have to remove (not renew) another one from the "kill zone". My "worst domain" from the 500 list will then end up in that "kill zone", and so on.

When I sell a domain, I will buy a new one right away (from a "wanted list" that I'm updating on a daily basis).

Usually 30-60% / year.

Percentage of portfolio sold is secondary. The most important thing is overall return on investment. As an extreme illustration, if over the course of a year you invest $10,000 on 1000 domains and you only sell one domain, that means you'd only sold .1% of your portfolio for that year. However, if that one sale is for $1 million, I doubt you'd be complaining about the low turnover rate.

As an example of the other extreme, let's say you invest $10,000 on 1000 domains as follows: 99 domains at $10/each, and 1 domain at $9,010. Now you sell all the $10 domains at $11 each, but you can't find a buyer for the $9k domain. That would mean that you'd sold 99% of your portfolio at a profit but still lost money overall.

Obviously, these are not real world examples, but my point is that the more important questions are about how much money is being returned on every dollar spent and how much money is being made overall.

Disco has a valid point - portfolio turn is only one metric. Rick Schwartz sells less than one percent of his portfolio annually but makes enough money in parking he can live off of parking income and never has to sell even one domain. His typical sale however probably pays renewals on his entire portfolio for the year.

Returning to the 100 reg fee domain portfolio with $10 renewals and assuming 20% commissions, you still need $1250 in sales to pay renewals. That could be a turn of....

1% (one sale) at $1250
2% (two sales) at $625 average
3% (three sales) at $417 average
10% (ten sales) at $125 average
25% (25 sales) at $50 average

Note that ten sales at $125 average will not work at SEDO due to minimum commissions being $50 which would equate to a 40% commission rate. The 25 sale scenario would generate zero net as the commission rate would effectively be 100%.

Selling at higher prices allows one to more easily pay renewals with fewer sales but higher prices limit the number of potential buyers as fewer interested parties are willing to pay above a certain price for a domain (regardless of how trivial the domain cost compares to other business expenses).

The challenge in recent years is that depending entirely on reg fee domains leaves lower quality inventory which is less likely to sell at all and if so for lower prices. Backorders give one access to higher quality domains though at a higher price point. Renewals can be covered just as easily but an acceptable ROI will require either higher turnover or higher sales. Examples assuming backorders at $69 and three additional years of renewals (four year horizon). Over four years each domain costs $99 and 100 domains cost nearly $10k requiring $12.4k in sales to cover renewals vs. $4k in cost for the pure reg fee portfolio and $5k needed to cover renewals on a pure reg fee portfolio. I believe the backorder strategy is what many domain investors including myself migrate to as domain auctions quite often are so competitive that one can tie up a lot of capital very quickly (without necessarily assuring an attractive ROI on that domain) . So the backorder / nonauction strategy requires $12.4k in sales or $3100 in sales annually to cover total renewals and the higher acquisition. Breakeven over this four-year horizon is...

1 sale annually at ~$3100 ($3094)
2 sales yearly at ~$1550 average
3 sales each year at ~$1033 average
5 sales per year at ~$620 average
10 sales annually at ~$310 average

Another strategy many domain investors utilize is acquiring domains in other TLDs where premium keyword availability is easier but renewals and initial acquisition cost are a bit higher. I will use .TV as an example since that is a TLD I am familiar with but could also be applied to new TLDs. I will assume a $59 backorder cost and $30 renewals with 100 domains. Over four years you have nearly $15k in cost requiring $18.6k in sales to cover cost + renewals. To breakeven you need...

1 sale each year at $4656 (not likely)
2 sales each year at $2328 avg
3 sales each year at $1552 avg
10 sales per year at $466 avg

When you start paying $50 plus in renewals or hundreds of dollars up front you need much higher sales prices and turnover to pay the bills.

I will add who invests thousands of dollars just to break even?

garptrader said:

I will add who invests thousands of dollars just to break even?

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It was not my intent, but break-even has been the result. There are benefits to running a break even business if it is large enough (although I'm in NO way offering tax or investment advice so check with your own tax planner or accountant) but the following may apply: you can run a 401k match through it and contribute significantly more to retirement than you could via a corporate job. You can also write off health care through a small business.