Comments on: Why I'm raising my prices on all my domains http://www.ricklatona.com/2011/11/30/why-im-raising-my-prices-on-all-my-domains/ Rick Latona's personal blog Wed, 02 May 2012 22:49:17 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Domaining365 http://www.ricklatona.com/2011/11/30/why-im-raising-my-prices-on-all-my-domains/#comment-10329 Domaining365 Tue, 27 Mar 2012 21:06:00 +0000 http://www.ricklatona.com/?p=4810#comment-10329 Yeah, my sell rate is about 1% too but I'm pretty passive in my domain sales efforts. I'm guessing the percentages are a lot higher for people who actively market their domains to opt-in lists or targeted prospects. Can anyone comment on that? Rick, can you share what your % was back when you were hammering it with the newsletter and auctions? Yeah, my sell rate is about 1% too but I'm pretty passive in my domain sales efforts. I'm guessing the percentages are a lot higher for people who actively market their domains to opt-in lists or targeted prospects. Can anyone comment on that? Rick, can you share what your % was back when you were hammering it with the newsletter and auctions?

]]> By: Patrick Dey http://www.ricklatona.com/2011/11/30/why-im-raising-my-prices-on-all-my-domains/#comment-10319 Patrick Dey Sat, 17 Mar 2012 18:01:00 +0000 http://www.ricklatona.com/?p=4810#comment-10319 Thanks for the thought provoking post, Rick. My strategy is to reduce my portfolio footprint and hold on to quality names only for the long run. For my own understanding, I have categorized the line items in your math snippet under three distinct heads - expense, income, profit. This is how it looks like. Expense: Investment cost = $100 per domain x 1000 domains = $100,000 Cost of Goods Sold = $100 per domain x 10 domains = $1,000 Domain Renewals = $8 per domain x 1000 domains = $8,000 Income: Sales = $1,000 per domain x 10 domains = $10,000 Profit: Gross Margin = Sales ($10,000) - COGS ($1,000) - Renewals ($8,000) = $1,000 Thanks for the thought provoking post, Rick. My strategy is to reduce my portfolio footprint and hold on to quality names only for the long run.

For my own understanding, I have categorized the line items in your math snippet under three distinct heads - expense, income, profit. This is how it looks like.

Expense:
Investment cost = $100 per domain x 1000 domains = $100,000
Cost of Goods Sold = $100 per domain x 10 domains = $1,000
Domain Renewals = $8 per domain x 1000 domains = $8,000

Income:
Sales = $1,000 per domain x 10 domains = $10,000

Profit:
Gross Margin = Sales ($10,000) - COGS ($1,000) - Renewals ($8,000) = $1,000

]]> By: Valuenet http://www.ricklatona.com/2011/11/30/why-im-raising-my-prices-on-all-my-domains/#comment-10275 Valuenet Mon, 23 Jan 2012 08:03:00 +0000 http://www.ricklatona.com/?p=4810#comment-10275 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) 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)

]]> By: jehzlau http://www.ricklatona.com/2011/11/30/why-im-raising-my-prices-on-all-my-domains/#comment-10239 jehzlau Sat, 31 Dec 2011 21:57:00 +0000 http://www.ricklatona.com/?p=4810#comment-10239 Good thing I only have a few domain names in my portfolio. :D Good thing I only have a few domain names in my portfolio. :D

]]> By: we buy Houses Cash http://www.ricklatona.com/2011/11/30/why-im-raising-my-prices-on-all-my-domains/#comment-10184 we buy Houses Cash Fri, 02 Dec 2011 05:29:00 +0000 http://www.ricklatona.com/?p=4810#comment-10184 If you are in marketing use Mortgage source and get up quick improvement is your local business then advertising your account which is best for the future of whole life. Because Portfolio is important for a personal status if you want to improve then move original way and get up quick response every where. If you are in marketing use Mortgage source and get up quick improvement is your local business then advertising your account which is best for the future of whole life.
Because Portfolio is important for a personal status if you want to improve then move original way and get up quick response every where.

]]> By: Ian http://www.ricklatona.com/2011/11/30/why-im-raising-my-prices-on-all-my-domains/#comment-10182 Ian Thu, 01 Dec 2011 16:42:00 +0000 http://www.ricklatona.com/?p=4810#comment-10182 ooops - of course I mean 0.7% ooops - of course I mean 0.7%

]]> By: Ian http://www.ricklatona.com/2011/11/30/why-im-raising-my-prices-on-all-my-domains/#comment-10181 Ian Thu, 01 Dec 2011 16:32:00 +0000 http://www.ricklatona.com/?p=4810#comment-10181 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 :oI Ian. 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 :o I
Ian.

]]> By: Anonymous http://www.ricklatona.com/2011/11/30/why-im-raising-my-prices-on-all-my-domains/#comment-10180 Anonymous Thu, 01 Dec 2011 15:21:00 +0000 http://www.ricklatona.com/?p=4810#comment-10180 Nice chart. Nice chart.

]]> By: Mike Curving http://www.ricklatona.com/2011/11/30/why-im-raising-my-prices-on-all-my-domains/#comment-10179 Mike Curving Thu, 01 Dec 2011 14:42:00 +0000 http://www.ricklatona.com/?p=4810#comment-10179 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/ 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/

]]> By: Ian http://www.ricklatona.com/2011/11/30/why-im-raising-my-prices-on-all-my-domains/#comment-10178 Ian Thu, 01 Dec 2011 12:59:00 +0000 http://www.ricklatona.com/?p=4810#comment-10178 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
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

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