I was texting with Tony Peppler about an offer he was contemplating taking on a domain name he has owned for many years. Tony told me what he paid for the domain name many years ago, and while the ROI was solid, the annual return did not look as rosy. Tony shared a tool with me that he used to calculate his annual return, and I thought I would share it with readers.
The tool he showed me can be found on Calculator.net, although I am sure there are other tools you can use if you prefer. You can enter in your acquisition date, acquisition price, sale date, and sale price. When you hit the submit button, it will tell you how much you earned, the overall ROI, and your annual rate of return.
Let’s say I bought a domain name for $6,500 in April of 2011, and I sold the domain name last week for a net price of $37,800 (after fees and commissions). Here’s how that would look:
In the example above, the investment gain is $31,300 with a total ROI of 481.54%. The annual rate of return on that eight+ year investment would be 22.29%.
I don’t think the annual ROI calculation is super important, but it can help put a deal in perspective.