Trends in the Domain Aftermarket in 2014 And Where I See it in 2015

I’ve looked through thousands of domains up for sale on Namejet, Flippa, and Godaddy every single day.  I read through the broker newsletters.  I read through all the sales results.  And most importantly I talked to people behind the scenes to see what they were buying and what they were selling.  And I’ve come to this. 2014 was a banner year for most seasoned domain investors.  If you have been in this industry more than 5 years and have purchased short names and numerics, you made A LOT of money this year. The people that had million dollar profit years are all around you but with little fanfare and they want to keep it that way.   It was a great year for you if you held the following types of names.  With each type I’ll discuss where I see it headed in 2015 and which side I’m concentrating on in that area.

Sell Side= I am selling more than I am buying or accumulating.  Most buys are for quick flips.  Sell side does not mean I’m negative

Buy Side= I am buying every good priced name in this area I can afford.  Only selling at great returns

 

 

• Bitcoin:  If you owned any coin or bitcoin types of names and sold, you had a great return.  BTC.com was one of the bigger sales on record but there were hundreds of other bitcoin names that passed through the auction houses  Where I See it Heading in 2015:   If you purchased bitcoin names in 2014 I think you will have to hold to see great returns.  It all comes down to what you paid ,but I don’t see a huge move up in price from here. Essentially I think the price of bitcoins and bitcoin domain names move parallel from here.  I’m on the SELL side
  

 

• Dot Info:  Flippa single handily brought dot info names to the forefront of the domain aftermarket.  If you ever wanted to watch an aftermarket grow in front of your eyes and grow quickly, dot info was your tld of choice. Names that could have been had for next to nothing starting selling for hundreds and some thousands.  It started off the larger Flippa sellers putting up some of the better keyword dot infos and have them hit good prices.  What followed was other tagging along and also received solid prices.  From there, everyone seemed to go hunting for dot infos to sell on Flippa.  Where I See it Heading in 2015:  Dot info has solidified its place in the resale market.  It is the perfect tld for putting up info and I feel the general public does know what it is.  Obviously the surge is over but I think there is money to be made if you can find some private buys on some good keywords.  There is also opportunity to buy on Godaddy and flip on Flippa.  Just not easy money like it was 8 months ago. I’m on the SELL side of the model

 

• Drone Names:  It all started with 60 minutes doing a piece on Amazon’s fictitious delivery of packages using drones.  Nobody picked up that the article was done Sunday night before Cyber Monday in order to drive sales.  All they saw were the cool drones.  The prices have been climbing ever since.  A ton of hand regs and older names hit the market and the sales prices were all good enough to keep people hunting and selling.  Where I See It Heading in 2015:   I think prices in the hand regs and low quality drone names go stagnant and the small handful of top notch drone names rise tremendously in value.  No doubt drones are here to stay and will continue to be a part of lives, but the skies and the drone market will be crowded. I’m on the SELL side of this one

 

• NNNN.coms Went Crazy:   This could probably have its own article.  The people that called for the top of the market looked silly this past year.  The NNNN.coms moved to the point that good numbers were over $10K and the bottom was $4K which was the exact same level of LLL.coms at the time (that changed quickly).   There is a buyer with the handle named ‘First’ that pretty much bought every numeric he could and can.  Paying top dollar at the time and yet he is already way ahead just 6 months later.  Every day seems to hit new highs for numerics with the best names with three 8s seeking $250K each.  Not selling but seeking.  Where I See it Heading in 2015:  It has really no where to go up for one reason.  You can’t find very many NNNN.coms right now.  The supply is dropped to almost nothing because many of the NNNN.coms were bought and put into large portfolios.  With only 10,000 names, every day another one is being purchased and put into use.  Sellers are keeping their price high because they know that there just aren’t many to buy right now.  I see prices going higher just don’t see an active market because so many domains will be held tight.  I’m on the BUY side of this model

• LLLL.coms    LLLL.coms seemed to sit there this year.  There seemed to be more LLLL.coms for sale at the auctions than there have been in the past few years.  Maybe I just noticed more because there were more above $100.  All LLLL.coms regardless of letter quality have some value.  Figuring out which one is better than the rest is still the big mystery.  Everyone has their own formula but guarantee that most can’t come within 10% of where an auction will finish.   These are still great for flips.  And although I’m not sure they increased nearly as much as the other areas in this post, they certainly haven’t gone down.  Where I See Them in 2015.  I seem them climbing moderately.  I don’t think they rocket up like LLL.coms did but a general 25% increase.    I am on the BUY side and think everyone should have 5 to 10% in LLLL.coms in their portfolio

 

• 5N.coms   Another movement in price that not a lot of people saw coming.  I personally talked to a few people that had been stocking up in all of 2013 on this type and they’ve been making 10 times what they paid on each sale. Ironically, the prices have continued to climb into the end of the year and many of the people that bought in the first half of 2014 have actually made good money on the resale.  The market is driven by the lack of inventory in the NNNN.coms. I wanted to see confirmation by the Chinese market before I became an investor. When I saw the buyer “First”, mentioned above, buying every 5N.com that came up I saw that as a very good sign.  Where I See it Heading in 2015:  I see a double from here. Maybe more for the top numbers.  The Chinese market has money to spend and they like to build large portfolios of numbers to create assets.  I think they continue to drive the market in 2015.  And no I don’t see this as a use thing.  I don’t see a ton of 5N.coms going into use as a website.  I see this as a demand thing.  As long as people want things, regardless of how useful that thing is, prices will move up.   I’m on the BUY side of this model

•  3D Printing.   Took off like gangbusters in the spring and then died.  Still getting some action but just like 3D printing stocks, the demand and the prices fell hard.  Where I see it Heading in 2015.   I think 3D printing will continue to become part of our every day world.  There will be demand for 3D printing names but not nearly as many as what the market was pricing names for.  I think prices peaked and there will be some bag holders.  I am on the SELL side.

• One Word Dictionary:   One word dictionary have always been in demand but this year saw them taken to a new level.  Different conjugations of verbs and other forms of nouns that normally were at a lower price level, surged to premium pricing.  Singular nouns that could become brands became $25K plus names.  With the economy in the US in full swing more companies were looking for short brands and searching for names.  And each year that goes by means more names are being taken out of the pool and made into functional, corporate websites.  The last thing that is adding to the prices is the fact that domain owners know that replacing a sold name of the same quality has become difficult and expensive so they are holding firm with pricing.  Where I See it Heading in 2015.  Nowhere but up. The domain sellers are actually helping to step up prices. With the big sales means a flush of cash that can go into another name and they are willing to pay a little more now that their wallet is bigger.  I’m on the BUY side….because everyone should be on this category if they have the money

• LLL.coms  What can you say?  They have ascended to the next pricing level. The safest of all domain purchases and domain investors flocked to them.  There wasn’t a domain investor out there that didn’t look at the market and wish they wouldn’t have sold some of the LLL.coms that they have sold over the last year or two.  I personally saw my MQO.com get changed hands 4 times this year and is yet back up for sale.  And I know every person made a little money along the way.  Not very many markets do that in one year.  Where I See It Heading in 2015.   I do think we have leveled off a bit in the last few months.  I also think that many of the recent sale prices of some of the LLL.coms will take time to flip at a profit because its starting to get to high multiples of just this spring.  The low end price used to be $4K in spring and now its $6K.  But I also think there are going to be quite a few names coming out of the closet and sold because it provides cash flow and great profit.  Most LLL.coms were purchased well below current market prices and if a company or investor needs cash there is no easier domain to sell than these.  I think we will see some great sales this year because companies have realized they better buy now before all the good letter LLL.com go over 100K like the NNN.coms have.  And finally like mentioned above,  domain investors that have made some great sales will reinvest in the safe haven of LLL.coms and they have a lot of money to spend so they will pay up for a great name.   I am on the BUY side….but watching carefully because there is an opportunity to tie up a bunch of money and have prices settle.  If cashflow wasn’t an issue for me  SUPER BUY side

• LL.coms, NN.coms and NNN.com.  They’ve become the domains of Kings.  Their prices more than doubled this year.  An average NNN.com could have been had for $40-$60 last year and this year you probably weren’t going to find any under $100K.  NN.coms are pretty much millionaire names.  25.com is up for sale and is a great price at $3 million plus to any larger business IMO.  That’s how strong the market is.  LL.coms.  They are getting to the point that they will soon be all in use.  Anyone selling under $1 million either has a few bad letters or they need to free up some cash.  Otherwise, patience will lead to seven figures IMO.   Where I See This Going in 2015.   You will see new records set every month.  TJ Demas will be in the headline quite a bit for his incredible foresight into the numeric market and his large sales I see coming.   Andrew Rosener and Domain Holdings selling lots of these in 2015 as well.  Where I See it Heading in 2015:  Nowhere but UP, new records every day and obviously I am on the BUY side……if I had the money.

• CCC.com  LLN.com, NNL.com and the rest.   You’ve heard me say it 1000 times.  The most liquid and affordable names in domain investing.  Names that usually sell for under $1000 and can often be flipped days later if purchased right.  The prices continued to move upward this year with LLN.com and NNL.com averaging in the $750 range.  But could often be purchased under $500 depending on the letters and luck.  They went up enough that if you bought more than a year ago you were guaranteed to make money, most times double or more.  Where I See it Heading in 2015.  I feel like we should see another 25% move up over 2015.  They are short, seem to be in good demand.  They always get bids at auction. There are just a lot of combinations available and they come up for sale quite often.  The NLN.com and LNL.coms should move up in price as well but are the least desirable of the group.  They always have liquidity but a crap shoot on their prices.  Average seems to be $150 right now and I see that moving up to $200 or so.  And while this whole article is educated guesses the CCC.com market is a complete guess.  Very volatile results.   I am on the BUY Side ….but flip 75% of my buys at the auction houses
  

•  gTLDS    I can’t leave these out.   I think the year was rough.  Little to no aftermarket for any of the names.  Dot club seemed to be the only ones that could generate any positive buzz.  Their stocks did poorly as well.  Buyers tied up cash flow and realize they are either in for a long term hold or a non renewal.     Where I See it Heading in 2015    I think it gets worse before it gets better.  With all the price action in the above names, domain investors realized they may have missed out on some of the price increase while they were concentrating on finding new gTLDs.   I think renewals will be half of registrations.  BUT I alst think there is value in the names, it’s just going to take a while. And I am willing to build cash reserves through investing in other areas and then buying my way into the market later.  I look at it like this. Instead of buying season tickets for $3000 a year, I skip the Athletes in Action and Morehead State games and buy scalped front section seats to the best 5 games and still come out ahead.  I get to wait and see what the best 5 games are as well.  I’ll be part of the gTLD party later, I just don’t know where the party is quite yet so I am going to keep moving until I do..

 

• There are plenty of other sections and niches that are doing well.  Too many to list but there are a few that I am bullish

• Top Keyword dot Net.   All the news on dot net is bad.  Falling registrations.  Tons of inventory at the auction houses.  Prices plummeting.   And I love it. I am taking the Buffet approach and buying when fear is greatest.  I completely agree that two and three words dot nets have lost most of their value.  That there is no reason to protect a bad dot com with an even worse dot net.  But brands absolutely can be built on dot net. There is just no aftermarket auction sales and enduser inquiries aren’t there right now and it’s killing prices.  But in my mind are worth more than the 5% of value of dot com that they are pricing out at now.   People are practically giving them away because the aftermarket desire for them is so sparse.  I like the cost to potential return at this point and will be happy to be one of the few that think that for another year.  If you have a portfolio of dot net and dot org that you purchased over the past 5 years,  then you are not looking good.

• Adverb Noun dot coms.   I think companies are turning to dot com more than ever.  The new gTLDS have made them realize that their brand is more important than ever.  Dot com is easier to establish and they are willing to pay more.   I find many domain investors still don’t know what makes a great brand name but those that do have done very well.  They are still generally pretty cheap, readily available at auction houses, and get inquiries quite often.  But you do have to play the old, buy 10, sell one to pay for the other 9 approach.

• Quotes and Sayings.   Short quotes and sayings make good marketing names and companies are starting to realize it is a good purchase to add them to the overall marketing package.  I feel like the older sayings do better than the trendy.    I bought Refuse to Quit based on this premise and saw DontQuit hit a pretty good number.  I think these types of names move way up in value

• Anything Memorable.   The problem here is everyone thinks their name is memorable.  B2B2 is easy to remember.  B2F6 is not as much.  I feel like I’ve developed a talent to understand which names could make a brand. It’s not really something you can teach but it can be learned through gathering data and watching advertising.  I have a few people in this industry that are amazing at recognizing potential and I will often ask their opinion.  I’d tell you their names but want to avoid them getting spammed to death.  Memorable dot coms don’t always have to be expensive.  I bought RocketDonkey.com  because I thought it was fun,memorable and would make a great brand.  It costs nothing but throw in a good logo and an emotional pitch,and I think it works. Rocket Donkey “Taking your ass to the top”   SOLD