Domain Spotlight:

Domain Shane’s Daily List of Domains at Auction for Thursday May 21st, 2020

Today we are going to talk about math. It’s what you need to be able to turn a profit in domain names. Here’s a simple question. If you have a 10% sell through rate and every domain cost the same amount, how many times costs would you have to make a profit? 10 times multiple is wrong. Why? Because there is renewal fee and most likely a commission of some sort on at least a few of those. It’s probably more like 11 or 12. But obviously not all domain cost the same. Conceivably you could sell one of your more expensive domains for 11 times and cover the costs for many of the lower cost domains. But what if you only sell the cheap one? Then you would have to get even higher returns. One more question? If Mike Mann has a .25 percent sell through rate (not fact, just quick math from deck by 3rd party), what does his return need to be?

400 Times. Yes. Will all domain cost being equal, if you only sell 3 names per 1000 you are going to need to get 400 times the price you paid. So keep that in mind when you see a great price from Mike Mann’s portfolio. If its $40,000 sale it needed to cost $100 to break even. As I said above that obviously all the names didn’t cost the same so my math isn’t truly correct. But you get my point. Math is only good when you have both sides of the equation. Having only sales price doesn’t tell the story. You don’t know what it costs. But now you do know what’s needed to make those sales profitable and its a HUGE multiple at the current sell through rate.

Domain of the Day: So true, so true

Quote of the Day: Names at Auction or Dropping There are a bunch of team names at auction but this one is the most generic in my opinion. The Rockies is a pretty popular term I don’t love it but its gotten quite a few bids so what do I know? 2012 birthday. The oldest of the names coming up for auction 2014 birthday. Tens of thousands of them across the US. Many for sale Last call. Ok, maybe not last call. Pretty sure it will go to auction

Namejet and Sedo & More Domains at Action Dot cc rules. Ok maybe not rules but it may sell Man I love Gulab jamen. So sweet Closes today but I don’t think it gets higher than initial offer With the price of real estate you wouldn’t have to sell too many digs to pay for the site. No bids Pretty sure its a big enough category to build a site on. Most Americans own one Registered in 17 other extensions. History and backlinks included Taken in 33 extensions. The highest of the dot coms at Namejet today I just put it here because it has bees in the name

Godaddy Domains With Bids Top number of bids on the board today. Boring to me but its super common name for a cleaner Here’s the name of your new advisory company that helps businesses get back to work safely Ironically my nickname in High School Z makes it much cooler Sound rich….and like a Strippers name The greatest affiliate site Throw a MY in front of keyword to give it value I knew it would do well. eSports all the way Its the best kind of success

Godaddy Names With One or No Bids

The Rest of the Godaddy Names with Bids

Have a name at auction and need more exposure? Send me an email. We Charge $10 per name per day. We may be able to help. If you have an auction you want to promote, email us for details.*All names chosen by us, Shane and Josh . (ie you click through and purchase a name you like) or an occasional paid listing. Everything we say is based on our own research or is opinion. Do your own due diligence. That means look it up yourself if you don’t think the stats or our opinion is correct. We hand choose the names but we are paid to make this list by both the auction houses, individuals that are auctioning names, and Godaddy affiliate links. Keep that in mind and only buy names that YOU think are good.

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One Reply to “Domain Shane’s Daily List of Domains at Auction for Thursday May 21st, 2020”

  1. Heya .. it actually isn’t quite so straight forward. That multiple of “acquisition cost” on what it takes to be profitable is good only if looking at the first year .. but the overall long-term isn’t entirely correct depending acquisition costs.

    It gets to be a bit of a sliding scale over time as average annual holding costs go down.

    With a 0.25% annual sell-through rate the number he’d need is 400x over averaged “annualised holding cost” to break even (as opposed to purely “acquisition cost”). Meaning that if you look at it over 5 years for a portfolio full of domains he bought at $100, he wouldn’t need to sell them at $40,000, but actually at $12,000 as the annual average cost of the domain at that point is $30.

    $100 + (5 x $10 renewals) = $150 cost over 5 years = $30 cost per year

    So with a 5 year plan he’d only need to sell domains acquired at $100 at 120x over actual cost in order to break even (still 400x over averaged annual holding cost which would always be constant as long as the average sell-through-rate is constant at 0.25%).

    The higher the acquisition costs vs renewal price, the sharper the drop in required mark-up over time. So if your portfolio is only handregs, then there is zero drop over time.


    But what I wrote is actually the simplified and not entirely accurate version. If you want to get even further detailed (probably not .. lol), a few months ago I actually made a stupidly complex “Portfolio Projection” spreadsheet that accounted for depreciating averaged holding costs to show expected break-even timeline depending on your specific (constant) acquisition habits. Took a good chunk of a weekend on Excel .. lol, but really opened my eyes to the math behind domaining.

    If ever you want me to do one for you, the main variables to input are:
    – Acquisitions per day
    – Average acquisition price
    – Average renewal cost
    – Sell-through rate
    – Average $ sale amount
    From those it calculates the date and amount of your peak out of pocket investment, as well as the dates you will break-even, and the dates you will hit $100k, $500k and $1M in profits. Obviously it’s all theoretical and based on steady sales, but still interesting.

    I don’t really follow Mike Mann (sorry Mike .. it’s not you, it’s Twitter .. lol). But from what I see others post here’s a sample based on the following data:
    Acquisitions / Day: 5.00
    Avg Acquisition Cost: $100.00
    Avg Renewal Cost: $8.50
    Sell-Through Rate: 0.25%
    Average Sale: $12,000

    Based on those numbers this is the expected timelines:
    -$404,490 = 4y06m16d (peak investment)
    Break Even = 8y11m26d
    $100k Profit = 9y06m14d
    $500k Profit = 11y03m14d
    $1M Profit = 12y11m27d
    $2M Profit = 15y07m21d

    That’s based on a continuous and ongoing acquisition of 5 domains per day at an average cost of $100 with $8.50 renewals. With the 0.25% sell-through he’d only make 2 sales in the first year. After 10 years he’d have 18024 domains and a total of 226 domains sold (43 sales in that year). Getting back to multiples, after 10 years his multiple would be 680x (and climbing every year due to decreasing averaged annual costs). More interestingly is that he’s be losing money for 5 years before seeing $40k in profit in the 6th year; and overall it would take about 9 years to break even. But after that profits really start to roll because of the size of the portfolio and decreasing holding costs.

    That being said .. if I adjust his average sale down to $7,000, he would bleed money for 11 years and take 21 years to break even (but he’d still hit $1M in profit after 26.5 years).

    All that is based on if he was starting today with 0 domains. However, for any portfolio with $8.50 renewals and a 0.25% sell-through rate you’d need an average sale of about $3400 to break even (if you ignore acquisition previous costs and invest in the portfolio today with no further acquisitions going forward). With his 350,000 domains if his average sale was just a little more at $4000, it would profit $500k per year. A little less at $3000 and it would lose $350k per year. At $5000 average the profit would be $1.4M per year.

    Again though .. this is all theory based on statistical averages .. real world will end up very different! 😉

    #NumbersAreFun 🙂

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