After taking pricing advice from Rick Schwartz, domain investor lands his biggest sale in seventeen years

I’ve said it many times before, but it never hurts to say it again. What makes the domain industry truly unique is the number of experts who share their advice for free. Rick Schwartz is inarguably one of the most successful domain name investors in the world, and when he came back on Twitter last year and started sharing advice, me and many others were listening, and still are.

One of the best videos Rick has put out is about how so many domain name investors are under-pricing their domain names. In the video he makes a good point – business owners have a lot of expenses and even the sign for their business could cost $20,000+ so a domain name, the home for their brand online, should be worth a lot to them.

First, stop what you’re doing now and watch this video, it’s two minutes and seventeen seconds long and is absolutely spot on. Okay, now back to the topic of my post.

A domain investor who has been in the industry for seventeen years shared his biggest sale yet, a three word .com – PlantToGrow(dot)com for $24,500 through Afternic. The investor shared the sale with the community on NamePros in this thread, and gave special thanks to Rick for his advice in the video I shared above. Here’s a bit more about how this investor changed his pricing strategy over the last year:

I’ve been buying and selling domains for over 17 years. Prior to August, I’d been selling about 60-70 domains per year to end users, but last year I revised the prices on about 30-40% of my domains (see below). The reason I increased pricing on many of my domains was because it really felt like I was underselling many domains and leaving too much money on the table.

While this has been the second 5 figure sale since August and my average sale price is much higher than in prior years, my overall sales have not really been higher.for the last 12 months as the higher prices on the top 30-40% of my names have likely decreased the quantity of sales. Maybe I’ll try to fine tune this over time to see if I can achieve the right balance.

(Source – NamePros)

As you’d expect, the quantity of sales would decrease as prices increase, but with a higher average sale price, making the same amount of money while maintaining more of your assets is a win-win IMO.

I find myself adjusting prices on my domains all the time and this definitely gives me some food for thought. Of course there’s a balance, and everyone has a different portfolio but it does make you think about how much money you might be leaving on the table.

Huge congrats to the seller, great name, great price and good insights on pricing from Rick to bring this all together!

{ 15 comments… add one }

  • Michael March 23, 2020, 12:14 am

    To each their own, but I imagine most sellers would prefer to have a steady and more reliable stream of income. When you get fewer sales for more money you keep more of your assets, but you’re also putting more of your eggs in one basket. Imagine if he had only made one five figure sale instead of two. He would have had a massively down year instead of selling about the same as when his pricing was lower. By raising prices he’s making his income stream more fragile and subject to wild fluctuations. Which might be fine if this isn’t his main source of income and has no issues covering renewals. But this is not blanket advice everyone should take just to “be like Rick”.

    Reply
  • Lala March 23, 2020, 12:16 am

    PlanToGrow.com rather than PlantToGrow.com 🙂

    Reply
  • Rick Schwartz March 23, 2020, 3:52 am

    Michael, that is the same flawed thinking that most low level domainers have. But it’s flawed. Completely flawed. That’s why so many domainers strugglel. You got it ass backwards pal. Hope you learn from this guy. Try it you’ll like it.

    Watch the video. Now if you have really crummy names and can only sell them for $50 and $100 then forget about it.

    It all starts with a quality meme but you don’t have to pull your pants down because you’re weak and nervous. You have to establish a value and stick to it.

    You will sell half as many domains for two times to four times the price or more.

    That’s called working smarter.

    So people have two paths. Yours with low returns because of desperation or my path with higher returns because of understanding and confidence.

    Watch the video. It’s your choice whether you want to learn and go to the next level or stay put.

    Good luck!!

    And by the way the gentleman that made the sale had the exact same mindset you did. He just changed it and so did his results.

    Reply
    • Uknowledge March 23, 2020, 10:47 am

      This is why i like you Rick.Spot on with your advice.Just so you know, so many people are jealous of your success and they dont have the guts to do it to your level.You should be listened to.

      So many domainers have left way money on the table and give excuse of selling cheap but the money dont last that long.

      You are the man and most should listen.Thank you for being there and giving your free valuable advice.Those who have ears will listen and grow while those who dont listen,will remain where they are while others grow.

      Reply
    • Michael March 24, 2020, 12:34 am

      Even your poster boy didn’t come out ahead. Selling half as many names for twice the average price isn’t winning, its shrinking your base so your income is on shakier ground. That’s not worth having a few extra mediocre names in stock.

      Your advice is correct for you, and the top 1% of domainers, who have quality names that aren’t terribly easy to replace. But it is not good advice for most people. Most people have garbage names and rarely make sales. Raising prices will kill their chances of succeeding.

      Sure, a brick and mortar will pay $25k for a sign, but that sign will help their foot traffic and pay itself off quickly. They probably don’t even need a website or a “global presence” and thus don’t value a domain the same way. You can’t get more just by asking, the buyer needs to value it more too. And most end users aren’t there yet, they’ll only pay a premium over hand registering a worse name if it is chump change.

      People will follow your advice. And there will be more outlier sales like this to keep people trying it. But you won’t hear about the thousands that wash out when they don’t get that lucky lightning strike.

      You’re not playing the same game as 99% of domain investors. The sooner people realize that the better. They’re selling to mom and pops, you’re selling to well funded companies with global ambitions.

      I’m not a hater, I acknowledge you are brilliant and a visionary. That said, I think you’re a little out of touch with the masses. Start a separate portfolio with $1k or $5k and try to operate it with the mindset of someone who isn’t set for life. Document it on Twitter, I bet if you follow your current advice it fails spectacularly. Your “let them eat cake” advice is misguided.

      Reply
    • Michael March 24, 2020, 3:21 am

      Rick, to further illustrate my point, see Garett’s comment below. For the first few months after taking your advice, he was immediately underwater and ready to give up on the new pricing strategy. Thankfully for him a big sale saved the day, but that is not guaranteed to happen and could have gone very differently for him. Now Garett has a better portfolio than most of the people you’re talking to, has a lot of data at his fingertips and uses it to his advantage, and only did it on the top 30-40% of his portfolio instead of across the board (a wise move).

      Imagine what would happen to the average person who owns garbage domains, doesn’t have access to a lot of data, and blindly takes your advice across their entire portfolio. They won’t make any sales when they 10x their prices or more, won’t have that lightning strike to bail them out, will get drowned by renewals, and give up.

      I know you’re trying to help raise people up, but you need to understand that almost nobody has a portfolio like yours or is as financially secure as you. The same strategy that works for you won’t work for everyone. Only they revere you so much that they’ll follow you blindly, and you’ll ruin them.

      This is classic survivorship bias, and not even that compelling of an example.

      Reply
      • Rick Schwartz March 24, 2020, 3:34 am

        Sometimes you have to take a leap of faith in life. If you want to get to the next level you have to do a little bit of Tarzan once in a while.

        You also have to put yourself in a financial position to do that. I’m just saying most people leave more money on the table then they actually take off the table. So imagine what your life would be if you triple your income?

        Please call up for a business sign and see how much the most modest sign for a business cost. It’s just a simple fact that the domain name is so much more important than the sign. It’s so much more valuable than the sign. It can be seen from 25,000 miles away not from 25 feet away.

        Don’t be scared. Have faith in what you believe and start to believe differently and your results will follow.

        Good luck to you and everyone else!

        It’s just working smarter not harder. That’s the equation in life. Work smarter, not harder.

        Reply
      • Garett Thompson (NameWorth) March 24, 2020, 3:02 pm

        Hey Michael,

        I agree with what you said about garbage domains being an exception, and I think the advice mainly applies to domain investors who have been grinding along and now have revenue of $20,000 or more per year from domains and have a general sense of what they are doing.

        I didn’t really add the full history of revenue, and I should have been more clear. My main issue wasn’t sales, it was cash-flow. I was still getting sales, big sales. If you look at my post below, my first month (August) was one of my largest ever at $29.1k. But my issue was only about $6,500 of that was cash. The other $22.5k was from lease-to-own arrangements. Great long term, but cash shortage in the short-term. If I had left my prices the same, that same set of domains would have sold for $11,850 instead of $29,100. September-December sales were $12,250 in cash (5 domains), and $14,350 in lease-to-own sales (3 domains). So my issue was more sales were converting from cash sales to lease sales as my prices increased.

        I have 2 portfolios of names. One larger one with over 4,000 names and a smaller one (2,600 names) that I have with a friend I’ve known since high school. This sale actually came from the portfolio I have with the friend. We started it in 2014 and both put $5k in to start ($10k total). By 2017 it had over $20,000 in sales for the year.

        In 2018 my friend invested another $11,000 in the business and last year it did $39,500 in sales for 2019. This year, in the first 3 months of the year we’ve already sold $34,500 from this portfolio. It has really been exceptional considering we only invested a one-time $21,000 total. I don’t want to make light of it though, I did have 10 years of part-time experience and knew more-or-less what to buy at that point.

        Reply
        • Morgan March 24, 2020, 5:01 pm

          Thanks for providing all the additional information here Garett and congrats again on the sale. It was awesome for you to share this with the community, in short – you rock!

          Reply
  • gene March 23, 2020, 11:20 am

    Rick is 100% correct – especially his point about selling to an ‘end user,’ and what a solid domain name (i.e., brand) is worth to them.

    It seems that too many domainers are content with flipping their properties to OTHER domainers, just to earn the fast buck.

    The problem with that operating model – which has been THE fundamental problem for the past 20 years – is that is perpetually keeps prices artificially depressed by acclimating buyers to pay less than they should , rather than allowing the marketplace to properly value quality names: So everyone gets hurt (except the buyers, of course).

    Reply
  • Arvind Reddy March 23, 2020, 9:05 pm

    Some of my names on these lines:
    treerentals.com
    pleasanttree.com
    instatree.com
    instanttrees.com

    Reply
  • Garett Thompson (NameWorth) March 24, 2020, 1:52 am

    Thanks for the great summary and write-up Morgan. As mentioned above it was PlanToGrow.

    You were correct that my revenue is just about the same. I didn’t even raise the prices on all of my domains, only my better 30-40% (with some only raised to $7,450-$15,000 range). So all the lower sales are still coming in for the remaining 60-70% of the domains.

    Previously, I only had my very top 150-200 (top 2-3%) names with higher prices. To have a chance at hitting larger sales, I knew I needed to up the percentage of higher priced domains.

    It all comes down to numbers. You don’t need to fear your sales disappearing completely. And if you raise the prices on your top 20% of domains and get no sales from your bottom 80%, then your bottom 80% might be boat anchors.

    I had my doubts as well along the way. In January and February my sales were only $4,200 for the 2 months combined (plus $2,200 per month in lease income), which might seem like a decent amount, but not when you have $4,700 per month in renewals. At one point I was telling my wife I may need to revisit prices and maybe adjust some back down, then in March I had a total of $34,500 in total sales.

    So my advice would be to stick with it. If you are hesitant to change your pricing all at once on your top domains, then try doubling their prices every 6 months until you find the right pricing level that works for your names.

    Reply
  • John March 25, 2020, 2:10 am

    I don’t normally visit Morgan’s blog anymore, but for some reason felt like it just now. This post is extremely ironic because not only have I been arguing this same point in the blog comments for years for upward sanity and for real world, real end user realisim vs. out of touch and defeatist “domainer think” regarding domain valuation and pricing, but I have also been making the same point regarding best quality three word (which this is) and longer domains to boot. Since everyone is flawed and imperfect to one degree or another, even Rick Schwartz himself blocked me on Twitter right after I posted comments #1 – 5 here to him about the latter:

    https://twitter.com/DomainKing/status/1175730270370222080

    Reply
    • John March 25, 2020, 3:05 am

      Interesting coincidence (to me anyway): I made my comment about “upward sanity” here before watching Schwartz’s video and the part at 0:52 where he starts talking about “insane” and “nuts.”

      Reply
  • Rick Schwartz March 25, 2020, 6:18 pm

    John,
    Just for the record….

    I did not block YOU personally.
    I blocked ALL my followers that had ZERO followers or was a newly created account.

    YOUR HANDLE fell into those criteria, not YOU personally and specifically.

    Understood?
    Thanks!

    Reply

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