One of the most frustrating things about buying, selling, and brokering domain names is you often can’t talk about what you’re doing due to NDAs. A good example of this was a couple of years ago when I brokered a domain name and made six-figures in commission on the deal. I wanted to yell from the rooftops, but I couldn’t. I was under NDA and couldn’t talk about the deal, so I thought it wasn’t worth mentioning.
The reality is, when you say, “I just sold a domain for x” and you can’t say the domain, people don’t believe you. So I’ve always assumed it’s better just not to say anything at all.
That being said, smaller deals usually don’t have NDAs behind them and I thought it was about time to start sharing some of these and the details behind how the sales happened. If it turns out people like articles like this, I can write more.
Three domain name sales I made in the first three months of 2020 that I can talk about publicly are: STAA(dot)com, Summon(dot)io, and Funding(dot)guru. Note, I’m putting “(dot)” in rather than using a “.” to be respectful so I don’t end up in the search results for a domain someone bought from me.
So let’s go through each of these sales and talk about how they went down.
I originally purchased this domain through Park.io for $99 back in March of 2015. Over the years I’ve had offers on it but none over $1,000. Typically I hope for a 10x ROI on my domains but I’m okay with 3x or less if that means I can make a deal happen. At the end of the day, these are investments and while I do want to maximize my investment potential, I also want to be generating revenue and reinvesting my profits.
Now it’s important to note, when calculating ROI don’t forget about your renewal fees. I renewed this domain in 2016, 2017, 2018, and 2019 for $35.99/year which totals $143.96. So $1,439 was my target.
While I do have some one-word .IO domains that I want $5,000 – $10,000 for, this was not one of them. One thing I’ve learned over the years is if you have a small portfolio like I do (between 300 – 400 domains) you do need to be okay selling some domains for less than you think you could get for them so that you’re constantly generating revenue and reinvesting your profits.
I’ve had inquiries over the years for this domain on Efty so I reached out to everyone who had inquired in the past and asked if they were still interested in the domain. I normally quoted around $4,500 in previous years so I already knew that in reaching out, they would expect a better deal.
One person got back to me and asked what price I was thinking, I said I was open to lowering the price but wanted to get an offer from them. They came back with $1,000. I countered at $1,500, we landed on $1,200. When I setup the transaction on Escrow.com they emailed me back, they had meant 1,200 AUD – doh! I did the math, that was around $800 – I couldn’t do that.
So I told them I was sorry but it would have to be USD, they agreed and we did the deal for $1,200. Doing the math here my total cost was $99 + $143.96 = 242.96 this yields a total profit of $957.04 an ROI of 393%.
So I’ll be the first to say that I don’t think .GURU domains are a good choice when it comes to investing. I bought three .GURU domains when they were first released and honestly I never thought I’d sell one, I’ve had almost no inquiries on any of them since I bought them. Still, I like experimenting and held onto these to see if I might get lucky.
I hand registered funding(dot)guru (actually as a pre-registration through Go Daddy) for $40.17 back in 2014. I renewed it for six years for an average of around $25/year, so that’s an additional $150. So I was all-in about $190 for this domain name. A 10x ROI for this domain would be $1,900 but it’s a .GURU so I was feeling like I’d be lucky to ever sell it.
Last year I got an inquiry on Funding.guru but the deal never ended up going through. So this year, just like with Summon(dot)io, I reached out and asked the buyer if he was still interested. They were and we agreed to $1,000 without a ton of back-and-forth.
I have only had one inquiry on this domain since I bought it in 2014 so it took some faith (or foolishness) on my part to hold onto it and keep renewing it for so long. Doing the math here, my total cost was $190 so my total profit was $810 for an ROI of 426%.
During the 4L .COM boom back in 2015 I bought a handful of 4L .COMs all in the $2,000 – $4,000 range. Unfortunately I ended up overpaying since the market dropped not too long after I bought these and now they’re often selling for $500 or less. I bought this domain for $2,280 back in November of 2015.
There are two main categories of 4L .COMs, CHIPS which are more premium, they don’t have vowels and a few other cursed letters…and then there’s names like this that are just non-premiums. Based on GGRG.com‘s latest report this is pegged with a liquid value of around $100…in short, I was in the red on this name.
Still, over the years I’ve been quoting around $15,000 on the name hoping I’d get lucky. I got an inquiry, once again through Efty (noticing a pattern here?) and we worked out a deal for $7,500. Then, that deal fell apart. So once again, at the beginning of the year, I reached out to people who inquired in the past, one responded and we went back-and-forth on price for a while…then it looked like the deal was going to fall through.
I thought to myself. Okay, this domain has a liquid value of probably $100 maybe $200 or $300 if I’m lucky, it’s time to sell, let’s just try to not lose money. For a minute I thought it had a chance at $4,800 but the buyer got back to me and said they had talked about it internally and $2,500 was the most they could do.
I got back to them and said that would just be too low, my absolutely last and final was $2,800, they got back to me and we had a deal. Not a great ROI on this one but like I said, I overpaid for this and really should have lost money so booking a profit is a win in my book. Doing the math here, my total cost was $2,280 + ~$40 (four years of renewals) = $2,320 and once so my total profit was $480 for an ROI of 20.61%.
What’s always been so interesting to me about domain names is even the deals that we aren’t very happy with, like the one I just reviewed, still often end up with an ROI that most stock market investors would dream of getting. While I do always try to sell domains for 10x, one thing I’ve definitely learned over the years is that sometimes it’s better to take the money and enjoy an ROI of 300% – 400%.
As a domain investor, it can be easy to get a certain price stuck in your head, you’ll think to yourself, well I have to get at least “x” for this domain. At the end of the day, if you’ve found a way to make a 300% profit on a digital asset, and you can do it over and over again, why stop yourself from ringing the register?
So how does this all work into my plan for 2020? Well my goal this year is to do north of $200,000 in revenue from domain names, it’s still too early to know what my profit margin is going to be on that but we’ll see how the year pans out. I think I’m on track to beat my goal but I don’t want to jinx myself so I’ll leave it at that. This October will mark my 14th year investing in domain names, I’ve never done it full time but sometimes I do wonder what that would be like. Oh well, I’ll save that thought for another day.
Thanks for reading and feel free to chime in and comment on any of the sales I reviewed and of course you’re welcome to share a “behind the sale” of your own. Either way, I want to hear from you, comment and let your voice be heard!