Over the last couple of years, I have been taking more flyers on domain names. I have been buying more names at GoDaddy Auctions in the < $100 range, and my portfolio has grown to around 1,000 domain names. I have found pretty good success in this channel as one sale can pay for almost everything. As the year is coming to an end, I have been cutting bait – letting domain names expire instead of renewing them.
When I receive the expiry notices at GoDaddy and Enom, I look at a few things before deciding whether or not to turn off auto renew or simply not renew:
- Quality of name – how does it sound to me?
- Purchase price
- PPC Revenue (if applicable)
The most important thing to me is still the actual domain name. Sometimes I buy names at auction because the stats I evaluate look good and the domain name sounds so-so. I have sold enough so-so names to know that the sound of the name isn’t everything.
I also look at my purchase price to see if it was a name I paid a lot to buy or if I was the only bidder. In the first case, perhaps other investors would have an interest in buying the domain name. In the second case, maybe I was the only one who saw anything, and if there is no life with the name elsewhere, it’s not worth keeping.
Traffic and revenue are also important. Traffic indicates there are people typing it in to find something or see if the domain name is developed. PPC revenue can pay for the renewal or offset the renewal cost, making it easier to determine whether or not to keep the domain name.
The number of inquiries received is also important since domain name sales is what drives my business. The average sell through rate is pretty low across a portfolio, but if a name has received purchase interest, it’s probably one to keep.
I look at all of these attributes in totality to determine what to let expire. I have probably acquired 100 – 250 names in the last couple of years that I would consider flyers. These were small investments I hope to sell for 4 figures. They are essentially strategic lottery tickets. I buy them, set up forwarding or parking, put them on Afternic with a low 4 figure asking price, and hope to move them.
With the addition of so many new domain names in my portfolio, it’s important to know when to cut bait. I don’t want to build a massive portfolio and play the numbers game. I have done well enough on flyers that I will keep on buying them. Knowing what to drop is equally important so my overhead stays low.