And turning down a $1000 offer and letting that domain sit there for years is better? No big domainer is holding mediocre domains and turning down $1,000 in hopes of selling them for $100,000. Out of a 100 million plus domain names registered, how many sales in the past year have been for $100,000 or more where you consider the domain name as so/so?

The question is can you still get a 1% sell through rate if you raise your prices 100x purchase price?

that's a bad news for me, just now that I decided to buy all your domains...............

There's only one way to find out.

Your calculation omits that domains (generally) appreciate in value.

There's also an argument to make about the quality of the domains. I'm not aware of what names you own, but not all portfolios are equal. And I think making a statement that all of your prices are going up is a great way to grab headlines and get people to look at your inventory before the prices go up. And didn't your credibility go out the window after you declared that domains are dead...

Rick, I think it's also important for domain investors to consider which strategy works depending on where they are (just starting to build their portfolio, growing, or holding as investments).
I liked a post you made a couple years ago about "velocity of money" - it's important to turn some profits quickly to reinvest and grow your capital and quality of domains. I agree with your thoughts then, especially for early stage domain investors. Otherwise, trying to hold with a smaller and lower quality portfolio and not much cash means you could be "hoping" for that bigger offer that never comes. Better to take some profits (even if lower) and reinvest.
Cheers

I can think of a few that do regularly. One off the top of my head shares my first name.

It's certainly true that there's no one size fits all strategy. I agree with your points.

Do you see my inventory posted anywhere? What am I trying to get people to look at? I just though the math was profound and I wanted to share it. If you don't think I'm credible, don't come to my site and read my posts.

Good point.

Smart move Rick - more than a few of us have come around to this POV. The trick is to catch those 'outliers' on the Bell Curve. And the only way to do that is by properly ID'ing the buyers, and their ability/desire to pay. But you already know that.

FWIW - I'm still loving one of the names that I bought from you a few years back. I'm STILL getting paid on that one every month. It was WAY underpriced, and I'm still happy that I was able to nab it first. So re-thanks on that one!

Man - do I miss your early newsletter!

That's not true at all - you may say good domains may appreciate with time, even this is debatble.

Overall, this is a mug's game for the majority, ignoring the success very few domainers have achieved.

Rick
They always say, try different approaches and ventures, because if you dont you will never know if it would work, otherwise you would always be wondering IF, if i had tried this or that.

You know what has worked in the past for you and made you good money, so go back to that and tweak a few things or add something new, but only change it one step at a time.

IAN

Rick, I've done the math too. there are many ways to skin the cat. for the largest portfolio owners, let's say its like this: you own a portfolio of 300,000 domains. At $8 renewal, your annual break even point is 2.4 million. At a 1% sell through rate, that's 3,000 domains sold. To reach your break even point you'd need an average sales price of $800. Anything over that is your profit (before other expenses). Here's where it gets interesting. At double the margin, or $1,600 average sale price, you're now netting 2.4 million in profit. Sounds pretty good right? Ready to get even more interesting?

Now let's say we're talking about a portfolio of 3,000 domains. Apply the same math, and your break even point is now $24k, but if selling at the same margin of $1,600, your profit is now only $24k - hardly enough to live on!

So you can see how the economy of scale works to the larger portfolio's favor. Of course the real trick is, how to effectively scale the whole thing up, since we havn't even considered the acquisition cost of the portfolio, or replenishing stock. Personally I havn't begun to figure that out yet.

Your readers might also find the following info-graphic i created on a similar topic to be helpful. It shows the amount of average profit per domain name sold over time needed to attain a specific annual income - http://www.domainanimal.com/before-you-quit-your-day-job/

Nice chart.

Great post - It prompted me to check our stats here at Dotcom Agency.
Hopefully this may be interesting data for you...
These are last years sales (12 monmths - Oct 10 - Sept 11) = 217 names
Portfolio = 30,670 names. So for us it is around 7%.
Which probably makes sense as we price for end-user sales.
Av sales price acheived $7059 = rev $1,531,803 usd.
Renewal cost based on $8 = $245,000.
This clearly works but pricing is definately an art rather than science I
Ian.

ooops - of course I mean 0.7%

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Because Portfolio is important for a personal status if you want to improve then move original way and get up quick response every where.

Good thing I only have a few domain names in my portfolio.

One factor is omitted when doing this averaging math is that the better domains are sold faster and large portfolio owners are left with fewer high-quality domains which means the selling rate will decrease if they stop acquiring new domains (which is getting more expensive day-by-day)