Closing The Books on a Subpar Q1

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I’ll be honest with you. The first quarter was pretty subpar in terms of domain sales my company closed.

After the record breaking year I had last year, my expectations for Q1 2014 were pretty high. Unfortunately, domain sales in the first quarter were below my high expectations.

Looking at things objectively, it wasn’t all bad. Had I closed on the profitable offers I received, I would be on track to exceed last year’s sales numbers. Because of the steady nature of my company’s other revenue streams, I have the luxury of holding out for better offers, and when those didn’t materialize, my quarter was below my expectations.

There were several factors that I think caused the lower sales numbers for me:

Too much travel – Before the year began, I was concerned that my travel schedule would impact my business. I have been traveling for pleasure more than usual at the beginning of the year, and I didn’t focus on end user outreach. I am not complaining, but I haven’t been as focused on sales as I usually am, and it showed.

Fewer offers received – Prior to the past two weeks when I saw an increase in offers, the number of qualified offers was down compared to past quarters. I don’t know why I received fewer offers, but combined with initiating fewer outbound offers, it wasn’t a great sales quarter.

Steady alternative revenue streams – When cash is flowing into my business from alternative revenue streams, there is less incentive to sell domain names for lower offers. Blog and other website revenue remains solid, so I haven’t felt the need to sell for less than ideal prices, and I didn’t close some deals that I might have closed otherwise. For instance, a $25k offer on a name I bought for $15k might make sense on some days, but when I think it’s a $50-75k name, it makes it more difficult to pull the trigger when I don’t need to make a deal.

Tax uncertainty – As a result of the great year I had in 2013, I have a sizeable tax bill due on April 15. Until last week, I didn’t know what the bill would be (and what my 2014 quarterly estimated tax numbers are), which led me to spend less on domain acquisitions. The lack of new saleable inventory has also slowed my sales down. With fewer exceptional names coming in, there was even less incentive to undersell my domain names.

Now that my tax numbers are final and I closed a couple of quarter-end deals, the wheels will begin churning. I’ve been making some good offers on domain names, and that should help drive additional sales revenue. I have high hopes that things will get back on track in Q2.

How was your quarter?

12 COMMENTS

  1. Hi Elliott –

    Great blog, always enjoyed your posts and insights. Out of curiosity, what are some of your other revenue streams? You’ve mentioned DogWalker.com a few times, and those were always interesting posts, but wonder if you’d be willing to share a little about what your alternative streams of income are that help you float in times of a dry spells on offers?

    • This blog is the largest of the alternative revenue streams, and the first quarter tends to be the strongest as a number of advertisers pay for the year or a good portion of the year. Advertisers pay per term rather than affiliate or pay per performance, which I found to be less desirable as a publisher.

      The other thing to keep in mind is that while sales numbers are lower than I hoped and expected, I am not complaining because they are good enough. I don’t like to settle for mediocrity.

  2. I’m sure things will pick back up. You are taking a reasonable approach to your business by cutting down expenses b/c of the taxes etc. You’ll be write back in the swing of things by Q2 or Q3. Nobody wins em all and the lower profit is just your cautiousness. Win/Win

  3. I will agree this sort of analysis should be done at least on a quarterly basis – how did I do, what sold (by TLD/language), what offers were received (by TLD/language), etc. Sometimes I wonder how many sales I lose out on by having fixed prices on most domains but I recall several years getting annoyed by many $100 offers at SEDO and even less at Godaddy auctions so I will assume that most of those offer views are either domainers or other parties who just don’t want to pay a fair price for a solid keyword domain. As well, I have received a number of “How much?” inquiries that after responding were not replied to. In some cases I have followed up a bit later with “Are you still interested?” but generally if they don’t respond with at least a counteroffer they are probably thinking your price is insane. But normally I am quoting prices $1500 up to $5k sometimes even below $1000 depending on the name… The challenge is that the easiest sale is when a potential buyers contacts you rather than vice versa. Selling domain names is a lot more difficult than registering them. Consequently I have still not regged even one new TLD domain thus far. I just don’t see this mushrooming demand for new TLD domains that the new TLD registrars are envisioning.

  4. I had a pretty decent quarter, I picked up a .com for $50 on Jan 6th and sold it for low 5 figures in March, nice quick turn, it was NDA so I had to keep it private (likely excuse), I also had a few decent .tv sales, one at $15k, and also quite a few .me sales for $500-$2k…

  5. I had just an incredible 2013 for sales but Jan. was slow, Feb. hot, first half of March hot, slow second half March.

    I had absolutely no slowdown in 2013, but some moments were hotter than others.

    It definitely feels like leads have slowed in 2014.

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