It is said that in Major League Baseball, a player can fail 70% of the time at the plate and still make the Hall of Fame. Someone with a long career whose batting average is .300 or better has a decent shot of being inducted in the baseball Hall of Fame while being known as a solid hitter.
Domain investing is similar in a sense, but the bar to be considered successful is even lower than a hitter in baseball. A decent domain portfolio may have a 2-3% sell through rate (STR). A strong domain investor portfolio optimized for sales might sell only 5% of the portfolio in a year. 95% of a domain name portfolio may sit unsold each year, and a large percentage of these domain names may not get an offer or inquiry during the course of a year.
At first glance, this would seem like a failure, but it isn’t. If a domain investor is selling 5% of his or her portfolio at solid prices, the investor can still earn an excellent living while continuing to reinvest profits into similar and better domain names.
STR is a bit of a vanity metric that doesn’t matter much to some people, but it is an important metric for someone whose portfolio was built to maximize sales. People who recently started out with their domain investments and want to build a portfolio need a good STR to show they are buying the right assets and continue to have good cash-flow to continue reinvesting.
Achieving a 5% STR seems like a low bar. I think it is difficult to do that these days while earning enough money to continue doing it over a longer period of time. There has never been as much competition in auctions or hand registrations as there is today. Maintaining a 5% STR with comfortable margins is a big challenge for most people.
If you can build your domain portfolio to succeed 5% of the time, you’ve done well if selling domain names is your goal. It’s not easy to do these days.
I actually failed with a lot of my business ideas over the past 18 years, but I still made a good living. So I agree with the idea of the article.