The Linton Equation: How to get a rough estimate of how many domains you’re going to sell this year

I was talking with a new domain investor this week who asked me the question of all questions, “how many domains should I expect to sell this year?” which of course was followed by, “how much money am I really going to make doing this?”

Whenever I hear this question my typical answer is, “well – it’s impossible to give any kind of realistic answer. The domain name world works in mysterious ways and you could have a great year where names sell all the time and for more than you expected, followed by a down year where nothing sells.”

I tried that answer but he pushed me to give him something. He said, “can you give me a way to just get a rough estimate? There has to be some general assumptions out there right?”

So I thought I’d take a stab at it, and since I don’t have a crystal ball, the best I could do is buy an image of a crystal ball and put a cartoon of my face in it. My point is, this is not an exact science, or even a science at all, but it is a way to get a rough estimate, which I guess is better than having no idea…or worse, setting unrealistically high expectations which I think way too many investors end up setting.

My estimation magic here is based on two assumptions that we’ll need to just roll with in order to move forward.

Assumption #1: the average domain investor sells 1% of their domains a year (or less, but let’s try to be optimistic here)

Assumption #2: you’re only going to be able to sell your .COMs

sorry but there’s just not enough proven repeatability with any other extension so you’ll have to consider all those non .COMs as gravy (and as MUCH riskier investments)

So here’s what you can do to get a rough estimate of how many domains you’re going to sell this year. Take the number of .COM domains you have in your portfolio and multiply it by 0.01.

If you own 100 .COM domains, selling 1 domain per year should be your expectation. Own 500, expect to sell five. Pretty simple right?

Well of course it’s not that simple. The reality is you could sell less because what you’re not accounting for is the number of domains in your portfolio that are junk. Since it’s hard for you to consider any of your precious babies as ugly, you might think none of your domains are junk, but trust me, some are.

Here’s what I’m going to use to filter, some of you are going to like this, others are going to hate it, but let’s give it a go. Take all of your .COM domains and plug them into Estibot, we’re not going to use this to get estimated values, instead we’re going to use it as a binary junk detection machine.

Consider any domains in your portfolio that Estibot values less than $20 as junk and subtract them from the number of .COM domains in your portfolio. Now take this new number and multiply it by 0.01, and that’s probably a more realistic estimate of how many domains you’re going to sell.

Well kinda…but of course there’s one more wrinkle.

I think this 1% assumption really applies to people who are passively waiting for people to make offers on their domains. If you actively try to sell your domains, I do think you’ll see more sales velocity. DNAcademy has a pretty cool new program in beta specifically focused on outbound sales that can give you a bit of motivation if you don’t know where to start with outbound.

I’m not sure exactly how much to increase the sales velocity if you’re doing outbound but to make the math easy, let’s just say it doubles the amount of sales you make. So if you’re doing outbound, take the total number of .COM domains you have, minus the junk names you filtered out using Estibot, and multiple by 0.02.

There’s your rough estimate…and yes – it’s probably a lower number than you thought, but there’s nothing like a good reality check every now and then. I was joking when I called this “The Linton Equation” in my post title but if you want to call it that, go for it.

As for the second part of my friend’s question – how do you know how much your domains will sell for. The best things I’ve seen in this space is what Andrew Rosner put together and has coined “The Rosner Equation” you can learn more about that here. Just note, this equation is for valuing premium generic domains…and there’s no chance you have a portfolio full of premium generic domains, so be honest with yourself when it comes to applying this to your own names.

Now I’m 99.9% sure that there will be people who disagree with my approach here in one way or another…and that’s okay because in all honesty this isn’t something that I feel is a hard and fast rule or a scientifically accurate formula. Instead, it’s my best attempt at helping someone estimate how many domains they’re going to sell, which like I said in the beginning, really is an impossible answer to provide.

That being said, I’m very interested to hear what you think. Is this estimation technique useful at all? Does it estimate too high? Too low? Is it just ridiculous?

I want to hear from you, comment and let your voice be heard!

{ 10 comments… add one }

  • bdsmStore.com May 31, 2019, 6:23 pm

    This domain game is too easy!
    i always sell all my domains…

    for huge losses!!!

    Reply
  • Flip Web Domains May 31, 2019, 6:29 pm

    This is a pretty good approach. It seems to bring the reality of the industry into focus. I appreciate that, but as you rightly said, there is no hard and fast way to predict this. I strongly believe that the keyword combinations in domains is the key to the success of the sale. I personally believe that MOST sales are between domainers and very few domains in persons portfolios are to end users. As such, domainers tend to look for trending topics, hence keywords. If you would notice the volume of sales of domains involving the word bitcoin. How many end-users are buying bitcoin domains?? I think the more domains a person has that contains keywords of trending topics, the more sales they will experience. As I said, I believe most of the sales are between domainers.

    Reply
  • Crimson May 31, 2019, 7:17 pm

    2-4% seems to be industry avg.
    BrandBucket seems to sell about 2% of names per year, that are under $5k.
    Of course it all depands if you only use an answering service, like unireg, or actively are doing marketing, showcasing, staging and outbound sales. Put a BIN price and your chance of a sale goes up, put up a logo and a custom lander and your sales will go up. Make yourself stand out from the sheep and you’ll be ahead of the pack.

    Reply
    • Snoopy June 2, 2019, 6:04 pm

      Brandbucket have 92,800 listings and sell approx 1000 names a year, average price around $2,800. That sell through rate is about 1.07%.

      Some people are probably redirecting to brand bucket also so a lot of the legwork will be just from the domain not brand bucket.

      The industry average in nowhere near 2-4% unless people are selling for a couple of hundred dollars or just auctioning stuff on forums (and thus likely making a loss). Most people don’t sell jack!

      Reply
  • Jose June 1, 2019, 2:31 am

    With the arrival of GoDaddy domain appraisal free the Domain Investors or Domainer before buying is to assert what Godaddy automatically give a $ figure to pay the seller domain premium (.com)

    Then when we want to sell during a year of each portfolio domains premium (.com) the average is 500 to 2500 USD this last figure is the one that Mr. Paul Nicks give in Namescon 2019 that get to pay in Godaddy.com

    Estibot no longer use it since Rick Schwartz give me a lesson in several of his posts then when we make an own assessment on the terms that learn from Rick lower the possibilities of more regular sales and we go to three, to more years, some up to 10 years, then read a post domainer with more years than me in “Domain Market” he sell for $ 2,000 (I’m confidential with the reading to do in the post “In your Buy or Sell Domains” of all the Domainer blog etc that I subscribe ) and it is ltar happy because a broker has found a buyer.

    I change the chip as soon as I want to sell and now have a total of 558 registered TLD, gTLD and ccTLD domains and I am honest I can not have as many as I do not have a team, I must form one to be better myself. I hope to sell this year 2019 50% of registered to 500 and 2500 USD the rest in NamesCon Europe whenever there is luck and one more that the broker sell and also in Uniregistry Announces Domain Liquidity.

    The money you earn after expenses, invest every month in expired domains and new domain registrations.

    Good weekend.

    Reply
  • Bul June 1, 2019, 7:17 am

    As soon as someone mentions the world estibot, I quickly move on. Do you know how many domains I have sold with under $100 estibot value for 6 figures? I am sure you have sold a load of them yourself!!

    Reply
    • Paul June 1, 2019, 2:23 pm

      “Do you know how many domains I have sold with under $100 estibot value for 6 figures? ”

      I know…zero.

      Reply
    • Snoopy June 2, 2019, 6:10 pm

      For most sales Estibot is actually too high. It is about as accurate as the average domainer so it is a useful tool.

      There is no surefire method of “valuing” a domain, even the people who sell for high prices would be wrong most of the time because sales prices are often very random and variable even for the exact same domain selling multiple times. Then the wholesale price will be some small fraction of what a business might pay and all that data is in the mix. So the people who pan Estibot and probably no more accurate themselves.

      Reply
  • Bul June 1, 2019, 7:24 am

    I should say that estibot should even be sued for unfair competition. I have checked a bunch of domains on the list of recently sold domains and non of them go are valued under 250 despite the fact that they sold for a combined 84K. I also checked values for domains from popular domainers and estibot appraises them for like $500 bucks and then says “good news. The domain theoneappraised.com is available for sale for $110,000 at Afternic”. Now this poses a problem for the seller. Estibot is not an legal authority on the value of domains and I doubt it helps the domain seller to be asking a certain ammount while estibot gives it a value of $500.

    Reply
    • Snoopy June 2, 2019, 6:14 pm

      Instead of “suing them for unfair competition” how about tarring and feathering the owner? Or maybe just tickle the owner with a feather? Let’s think up all the stuff we could do do estibot because they are the devil!

      Reply
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