GoDaddy VP and Aftermarket GM Paul Nicks was one of the keynote speakers at the 2019 NamesCon conference. Because of the amount of data and insight that was shared in his NamesCon 2018 keynote presentation, Paul’s keynote was the one I was looking forward to seeing the most. A few weeks ago, I shared Paul’s presentation slides that accompanied this year’s presentation, and the video of his keynote was uploaded to GoDaddy’s YouTube account late last week.
For your convenience, I embedded the video of Paul’s keynote below. If you have any questions for Paul – or if you have any comments about the presentation, you are welcome to post them here for Paul to see:
Thanks Elliot, I’ll do my best to answer questions your readers may have.
Paul, I have one. Giving your six year estimate in your example. How many domains should an individual be adding per year?
Hey Rod, thanks for the question. For the business case, I used the following variables: $3,000 ASP, 4 domains acquired per day, $60 average acquisition cost, $8.29 registration cost, 1% sell-through rate.
It sounds great and all and like anyone can do it. But doing the math, that’s $86,700 per year in domain name acquisitions only before renewals. Building a portfolio of 8,760 names. This seems like purely a numbers approach rather than a educated investment approach. I could see a new investor losing big time and sinking money into a lot of liabilities.
Can we be honest about the average acquisition cost of $50-75? Anything remotely decent ends up $100 at a minimum, and most sellable stuff ends up $300-500, if not more. There are occasional $15 snags that might average this number out, but overall the prices on GD auctions have gotten out of control. Not that there’s anything GD can do or should do about it, it’s just gotten a lot more competitive lately. It feels like the data used in the presentation is from a couple of days ago instead of present day.
Hey Bar, the examples I pulled for my presentation were from earlier this year. It is possible to find good 2-word domains even today, despite the stronger competition. Examples from this week: sextsnap.com, edgetherapy.com, biobeyond.com, ziptag.com, pointmagazine.com, watchtest.com, ruralsummit.com, frugalhealth.com, bityield.com, diamondnights.com, queryapp.com, officeimage.com, cryptogood.com, faststory.com, uniqueescapes.com. All of the above domains (and many more) fit the criteria I laid out and many were less than $100 with all being less than $200. I would say that a portfolio of domains of this quality would likely sell at least at a 1% annual rate with a $3000 ASP. If you wanted to tweak the business model a bit based on a higher acquisition price, then I could get behind that thinking. I could also see an increased STR with names of this quality as well, as with anything individual results may vary.
Paul, I don’t mean to bust your balls but those two-word dotcom examples are horrible. They’re mostly random words put together. When I think of two-worders, I think of silverearrings.com, lunchnapkins.com, metalstickers.com not ruralsummit.com, pointmagazine.com or diamondnights.com. Am I crazy? Those are the ones that Bar sees going for hundreds if not more.
Those names are certainly of higher quality and should fetch more than an average of $3000, while simultaneously costing more to acquire. My presentation was geared towards starting a portfolio with lower cost of acquisition and optimizing for a 1% sell-through and $3,000 average sales price. If you have a portfolio of domains in the vein of silverearrings,com then I think you’d likely experience a higher ASP and STR to go with the higher acquisition costs.
There are many ways to make money in domain investing, so I advise anyone just starting to optimize for the lower price 2-word domains that still make sense until they can comfortably move up to the larger-ticket buys.
Thanks for the reply Paul – In my post i meant *couple of years ago* but you got the gist. I agree with everything you’re saying, I guess I just wanted to vent a bit about the higher prices of the better two words .coms. Then sometimes you see names go for $1K that don’t make any sense. To be honest, some of the best names I’ve gotten off Godaddy are $12 snags that slipped through the cracks.
Agree with the names that slipped through the cracks. Recent Godaddy $11 BIN’s I snagged:
Dirtied.com
Frillers.com
VisualOptimizer.com
If they have 1 or two bids they often go into the hundreds if they’re any good.
There are still great names to be had, and mixing these $5-$12 closeout gems with domains that are going for $100-$200 will keep your overall portfolio per-domain acquisition costs down enough to follow my model.
You have the data available to show off how many ” $5-12 close out gems” have sold over the last 6 years prior? I think that type of data would be easily accessible and sell this concept a lot better Paul. I’ve personally sold some that I’ve bought at close out but not enough to sustain the example model. Today’s available closeout inventory is much worse today than 6 years ago.
Thanks Paul and congratulations for another excellent and informative presentation. Great to know sales are up 41 percent and there is much more info and advice.
I have personally recommended your 2018 presentation on several occasions on the blogs and NamePros.
(Hope you can upgrade your audio equipment though!)
Now, in a recent Godaddy blog called “Early 2019 domain trends and insights”, Joe Styler says:
“The more data we can share, the better off everyone in the industry will be as a rising tide lifts all boats. This year is no exception. We are sharing 5,000 previously unreleased actual sales from Q3 2018, that are typical of what kinds of domains sell on our Aftermarket.”
GODADDY BLOG
https://www.godaddy.com/garage/early-2019-domain-trends-and-insights/
This information about 5,000 actual sales from Q3 may help answer the suggestion of adam, a commenter above, who says:
“I think that type of data would be easily accessible and sell this concept a lot better Paul.”
I understand this valuable data has been made available to conference attendees, so will you be making the data available to “everyone”?
Joe Styler also says:
“I also enjoy sharing what we see in the industry.”
Please do share this data about the 5,000 sales.
We did share it to anyone who attended Namescon 2019. It was one of the benefits of being there. I did get legal and compliance approval to share at the conference but not more broadly. If you have a premier services representative you can email them and see if they can give you access to the bulk appraisal tool which has the sales information located in it as well.
Can you streamline the selling process? Recently I picked up some domains at GD closout, went to the domain manager, used the beta version of Afternic listing service to list them all with BIN. But when I logged into my Afternic account, they were not oft-in for fast transfer yet. The Afternic system should know that these domains with BIN are managed by Godaddy.
Hey Kassey, a domain can’t be opted in to fast transfer until the transfer lock is off, 60 days post registration. The domain will be listed for sale as a standard (non-fast transfer) listing until the 60 days are up and then it will automatically switch to fast transfer.
Paul,
What internal controls does GoDaddy use to prevent Aftermarket sales team members from participating in GoDaddy auctions? Does GoDaddy restrict access to bidding data in a way that would prevent GoDaddy employees from working directly, or indirectly through their own LLC or through outside confederates to compete with GoDaddy customers or GoDaddy itself?
For example, does GoDaddy require any internal written disclosure by employees of domain market activities they undertake in their own time and on their own account? Or is it just an “honor system”?