During the past few years, I have spent additional time and money growing my domain name portfolio. In some cases, I found niches that did well for me and hand registered dozens or more related domain names. In addition, I made a greater effort to acquire inventory-quality domain names in expiry and drop catch auctions. The results have been decent, but I am now more mindful of portfolio bloat.
One thing that I hoped wouldn’t happen but sort of expected was a drop in STR. Had my STR kept up with the rate of acquisition, that would have been fantastic. It would have been unexpected – but I would have been very happy. I can’t say for sure if it’s the market conditions or I am not buying the absolute best inventory, but my STR is down a bit in the last 6 months. It’s not at the point of urgency, but it’s a concern on my radar.
A reason this is an issue that has my attention is because a decent number of domain names I acquired have higher renewal costs than .com. I pay in the ballpark of $10/year for .coms, but .COs are somewhere around $30/year and .AI domain names are 3 figures/year. Fortunately, my overall renewal costs are still fairly low, but this could become an issue if I am not choosing the right domain names and there’s a sales downturn.
Scaling a business is challenging. Scaling a domain investment business like mine is especially hard because there is a lot of outside noise and selling domain names can be scattershot. I pay close attention to sales data I can see, but some of the data is misleading because it involves other domain investors making speculative purchases rather than end users buying for their business. It’s important to recognize the difference, hence knowing marketplace data and seeing how domain names are used.
The last few months has been a reminder to me that discipline matters just as much as creativity. It is not enough to find a profitable angle to try and replicate with hand registrations and aftermarket acquisitions. The hardest aspects are knowing when to stop, which names deserve to be renewed, and which names were optimistic bets that should be cut. It’s also important to continue monitor my pricing on a more regular basis to help move inventory.
There are lots of moving parts to a growing domain name portfolio, and the larger it gets, the more that has to be done to manage it.
Great points, Elliot. Thanks for sharing.
Totally agree. It is not easy scaling.
In my experience, STR has fallen as my portfolio has grown. My STR was never higher than when I had 300 – 600 names (years ago now). But overall sales $ is up. So selling less percentage wise, but making more. This is fine with me. But I also agree with you about cutting bloat. On average, I cut about 50 to 100 names a year, and this has remained consistent from the days when i had 500-600 till today when my folio is larger, so I’m cutting less, meaning I’m continually tightening up the amount of ‘bloat’ but due to the speculative nature of the game, as well as the fact that market conditions are ever changing and what is considered valuable, so there always seems to be some. My acquisition strategy is also more rifle than shotgun based. Appreciate the reminder though, thanks for the post.
Not an issue for me as all my domains are hand reg using GD 99 cents coupons and sold for high 6 figures