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Domain Holdings Q4 Report 2015

Total Sales for 2015 Domain Holdings had a strong Q4 2015. The results of our continuing efforts to develop a strong foundation for the Domain Holdings and Flippa families in Q3 have continued to gain momentum into Q4, resulting in higher sales and more robust numbers than Q3 and Q2. As always, we will continue to develop ourselves internally to ensure continued growth and client satisfaction.

Q4 Highlights and Sales Summary Include:

  • Total Sales: $6,358,902
  • Average Weekly Sales: $489,146
  • Average Sales Price (ASP): $105,982

Sales Summary Q3 vs Q4:

Domain Holdings experienced growth across the board for Q4 2015. Our experienced brokerage team generated $1.82M more (40% increase) in sales in Q4 than in Q3. Our overall average sales price is up from $57,424 to $105,982, and our average sales per week increased by 40% from Q3 to Q4, surpassing $485,000.

ASP for Q4 2015 The overall average sales price (ASP) for domains in Q4 was $105,982, an increase of 84% from Q3. Although ASP fluctuates from quarter to quarter, Domain Holdings has seen continued growth in the overall ASP throughout the fiscal year, making Q4 among our highest numbers in the last eight quarters.

In Q4, The United States and China continue to be the two largest markets for Domain Holdings, accounting for 86% of total sales. Sales to the Chinese market increased from Q3, due their interest in domain names of up to 4L or 3N.

Buyers by Extension

Buyer Extension in Q4 2015The .com domain continues to remain the market leader, accounting for 86% of our sales in Q4. However, interest in gTLDs continue to grow and constitute a larger part of our business. Certain gTLDs, such as .io are especially in demand, as they are very popular in the tech and startup sectors.

Looking ahead…

Overall, Q4 was a success and an amazing end to a big year. Flippa’s acquisition of Domain Holdings has allowed us to build a solid foundation for future growth. We have increased our sales through our continued dedication to our existing clients (buy requests), secured more inventory, generated new relationships, matured pipelines, and launching new outbound marketing campaigns.  In addition, Domain Holdings has expanded our team in size, function and experience in 2015. Our increased head count has allowed us to expand our service offerings, helping us to fulfill the needs of our existing clients, as well as the demands of a constantly growing client base.

Please check out an article written by Michelle Miller who sat down with Mark Daniel, our Senior Domain Broker, as we gain insight into the journey which led him to where he is today as one of the top brokers in the industry. In this article, Mark brings us into his domain – life before Domain Holdings, his approach, and his keys to success.

We are excited for what 2016 has in store! Thank you for reading!

Sincerely,

The Domain Holdings Team

dh logo

Slamming From Half-Court

As we cross the halfway point of Q4, we have some exciting announcements to share! The first announcement is regarding Mineral.com. This domain name, assisted by one of our premium domain brokers, Hobi Michalec, was sold in the beginning of November. This particular sale is one of the most notable sales to date in Q4, as we were able to find the right buyer by leveraging and collaborating with our Flippa platform. Mineral.com was secured under our exclusivity agreement at the end of August. Hobi and our marketing team worked tirelessly in finding both the right offer and buyer for this particular asset. After 2 months of marketing Mineral.com, Hobi and the seller discussed other strategies for increasing exposure. Hobi recommended that the seller consider listing the asset on our Flippa platform. Listing on the platform allowed Hobi to continue his outbound marketing efforts while giving the domain name greater exposure through the Flippa marketplace. Mineral.com was listed in a no-reserve auction for 14 days, and after receiving 89 bids, the asset was successfully sold. The end result was a digital asset given significant exposure through broker and marketplace efforts, satisfying seller and buyer with a perfect sale.

Domain Holdings Web Summit 2015 With our ongoing commitment to being the entrepreneur’s marketplace, our team traveled in the first week of November to participate in the Web Summit in Dublin. At the conference, which boasted over 42,000 attendees from more than 134 countries, our team was able to meet and interact with venture capitalists, founders of startup companies, executives from Fortune 500 companies, and journalists from all over the world. Here are some of the highlights:

  • A flock of sheep were color coordinated with the Web Summit’s theme colors
  • An ocean of startup, alpha, and beta exhibition booths
  • Numerous speakers at the various summits that inspired and motivated us
  • #NightSummit Pub Crawls where we mingled with other attendees in a more relaxed environment

Lastly, the motto each of us should live by is: WORK HARD PLAY HARD. Domain Holdings and Flippa USA will be traveling together in a few weeks to celebrate both the holidays and our accomplishments and successes in Tulum, Mexico. Our team is looking forward spending quality time with each other under the sun, with a glass of margarita in hand.

Thank you for reading! Stay tuned for future announcements…

Sincerely,

The Domain Holdings Team

Q3 Report

Domain Holdings Q3 Report 2015

Q3-2015 Total Sales

2015 continues to be a strong year for Domain Holdings, though the numbers might not reflect that strength. Heading into Q4, our momentum and sales are stronger than ever. Accompanying our merge with Flippa, we have made several sizable changes in Q3. Our focus is on ensuring that we have a rock solid foundation to promote increased growth, stability, and client services.

Our team is the base of this foundation, and the addition of domain industry veterans to the Domain Holdings and Flippa family has been a big first step. Our collective team has more than a century of domain experience with more than $250 Million closed in domain sales. Though that historical performance and experience is impressive, the most important attribute is that our experienced, dedicated team will always do the right thing, loves the domain industry, and is absolutely committed to the growth and solidity of Domain Holdings and Flippa.

Q3 Highlights and Sales Summary Include:

  • Total Sales: $4,536,483
  • Average Weekly Sales: $348,960
  • Average Sales Price (ASP): $57,424

Q3-2015 Domain ASP

The overall average sales price remained relatively consistent from Q2 to Q3, coming in at $57,500. Based on the predicted Q4 pipeline, expectations are that the overall ASP will continue to climb.

Buyers By Country

Q3-2015 Countries

Looking back to Q2, Europe only accounted for less than 1% of sales. During Q3 however, the European market skyrocketed, accounting for 17.7% of all sales, rising to match the growing Chinese market.

In Q4 we will continue to see strong demand for numeric and acronym domains from the Chinese investors. We are expecting to see the percentage to increase due to the recent interest for LLLL.com domains.

Buyers By Extension

Q3-2015 Extension Breakdown

As expected, .com’s are still dominating the market, but we have notice a growing trend with gTLD’s such as .io constituting a larger share of our business. In a one certain case, we sold a notable 1-word .io domain name in the high five-figure range to an end user. The .io extension in particular seems to be gaining more momentum.

As gTLD market continues to grow, it has peaked many people’s interest in buying different gTLDs for brand protection or marketing campaign. Domain Holdings would like to share an in depth Search Engine Marketing report on .Com vs. New GTLD, conducted by Bill Hartzer from GlobeRunner.com earlier this year. The study demonstrated whether or not the new gTLDs would be performing better, worse, or same as .com domains. Bill’s test result may be helpful to you in deciding if investing in gTLDS should be a part of your company’s brand protection and marketing campaign.

Looking Ahead . . .

We at Domain Holdings are excited about what’s ahead in Q4 and beyond. Here are few notable new features and services:

  • A complete solution for all types of domains. The Domain Holding brokers can launch and represent private auctions via the Flippa platform (upon request), boosting awareness and driving more offers to the table.
  • Custom research and highly targeted business intelligence reports. Our domain analysts research all potential end users and prospective buyers, providing a comprehensive analysis prior to broker outreach.
  • Leveraging and collaborating with the Flippa digital asset brokerage team. Flippa is #1 in the world at selling websites, recently expanding into the mobile apps space, and boasting a robust team of website and mobile app brokers. This far reaching broker network gives us access to an even greater amount of buyers and end-users across the all-inclusive digital asset landscape.

With our increased focus on backend new technology and a stronger operational foundation, the future for Domain Holdings is bright. We look forward to sharing more updates in the coming months. Be sure to talk to our brokerage team to learn more about the new features noted above. We also would love to hear your feedback as we continue to focus on offering the most comprehensive services in the industry.

Thank you for reading and hope to see you at NamesCon in January.

Sincerely,

The Domain Holdings Team

Q2-2015 Report

Domain Holdings Q2 Report 2015

Total Sales Q2-20152015 continues to be a strong year for Domain Holdings, as we report our Q2 results.  In addition to our sales success in Q2, Domain Holdings was acquired by Flippa, the #1 marketplace for buying and selling websites. Flippa, founded in 2009, has a robust technology driven team and marketplace platform that attracts numerous bids every minute of the day! Domain Holdings has one of the most respected and experienced brokerage teams in the domain industry, representing both large and small businesses secure their online brands. Combined, Flippa and Domain Holdings are expected to generated $70 million in sales over the next 12 months. Read more about the recent acquisition at DNJournal – http://www.dnjournal.com/archive/lowdown/2015/dailyposts/20150520.htm.

Although we cannot disclose the details of most of our sales due to non-disclosure agreements, we’ve provided some averages and other sales data that may be helpful for domain investors, buyers, and sellers who are eager to learn more about the domain industry.

Q2 Highlights Include:

  • 29% Increase in Sales from Q1 to Q2 2015
  • $59,079 Overall Average Sales Price
  • $472,636 Average Weekly Sales

Sales Summary:  Q1 vs. Q2 2015

In Q2 2015, we realized growth across the board. Our stellar brokerage team generated $1.39M more (29% increase) as compared to Q1. Our overall average sales price was up from $49,522 to $59,079 and our weekly sales average jumped by 29% exceeding $472,000 per week.

As the overall average sales price (ASP) for domains can fluctuate from quarter to quarter, we have had two strong quarters of exceptionally high ASPs. Q2 was among our highest in the last 6 quarters.

Overall Q1 vs Q2 2015 Comparison

Buyers By Country

Q1-2015 Buyers by CountryUSA and China remain the largest two markets for Domain Holdings, accounting for 90% of all sales.

In Q2 we continued to see a strong demand for number and acronym domains from the Chinese buyers. Short brandable domains also continue to be on the rise for the Chinese buyers.

In this quarter, we are expecting the Chinese investor market will continue to increase despite the China staking a recent hit.

 Buyers By Extension

Q2 2015 Extensions

While .com domains continue to remain the strongest segment of the marketplace, we have been receiving a lot more interest for gTLDs domains as we see more new extensions coming out for each quarter. We are happy to announce that we sold a 1-word .io domain for 6 figures to an end user in Q2 as we continue to work with different end users who are interested in investing in premium .io domain names, as well as other gTLD assets.

Sold Domains By Class

ASP by Class Q2-2015It’s no surprise that 1-word domains are at the top of the leaderboard, with an overall average sales price of $63,500. Acronyms were a close second, selling for just $500 less, followed by 2-word domains.

Looking Ahead . . .

Domain Holdings is especially excited about Q3, as they have recently secured exclusive representation for several 2-character and one-word domains, including ZQ.com, Sketch.com and portfolios.com. We are expecting to see the market continue to grow including:

  • Increase value trend for brandables and great 2-word .com domain assets
  • Greater demand and higher reported aftermarket sales for the new gTLD’s
  • Steady increased investment from overseas market especially China

Hope you enjoy the data we just share. We are excited and proud of our accomplishments in Q2 and to be a part of the Flippa team. We are looking forward to sharing even more data in Q3.

Sincerely,

The Domain Holdings Team

Q1-2015 Report

Domain Holdings Q1 Report 2015

DH Q1-2015 Report

Domain Holdings is extremely proud to report our Q1 results showing $4.75MM in total domain name sales. We are off to a great start for 2015 and while most transactions are protected under confidentiality agreements, we can share the collective data to help investors understand trends, highlight interesting data points, and provide further insights into the domain industry.

Some of the Main Highlights of Q1 Include:

  • $365,701 Average Weekly Sales
  • $49,522 Average Domain Sale Unit Price
  • 64.58% of ALL Sales End Users

Overall Sales Performance: Q1-2014 vs. Q1-2015

Overall DH Sales Performance 2014 vs. 2015
In Q1-2015, Domain Holdings managed to increase total sales, average weekly sales and average domain sales price per unit for the same period year over year. Our total sales and average weekly sales both realized a growth rate of 40%, while our average domain sale price per unit grew 35% from $36,757 to $49,522. This average unit price represents the largest in company’s history.

Average Unit Sales Price

The below chart illustrates the stark increase in average unit sales price for the period of Q1-2015.

Avg Domain Sales Q1-15

Buyers by Country

Buyers by Country Q1-2015USA and China remain the largest two markets for Domain Holdings. In Q1, we saw a strong demand in numeric and letter domains from the Chinese market, particularly in the NL.com, LLN.com, and LN.com categories. Domain Holdings has also witnessed an increase in interest for .com brandable assets out of the Chinese investor markets.

In Q2, we are expecting to see an increase percentage and sales for China due to the recent increase demand for LLL.com assets.

Buyers by Extension

Sales by Extension Q1-2015

Since .com domains remain the strongest segment of the marketplace, we do not expect to see a decline in sales any time soon. Activity within the ccTLD and gTLD domains has reached new highs, most likely as a result of all the marketing efforts around the publicity of the new gTLD launches.  Demand for .net & .org assets continues at a steady pace.

Buyers by Extension

Sales by Category Q1-2015

In similar fashion to our Q2-2014 report, brandable and 1 word .com domains continue to dominate our unit sales. In Q1-2015 we realized a 10% increase in brandable .com domain sales and a 5% increase in two word .com domain sales. One word .com domain transactions remain relatively stable. 75% of our brandable and one word generic .com buyers are end users, who may be more inclined to invest in their domain name and boost their brand equity.

End User Sales

New vs. Existing Relationship Q1-2015

As Domain Holdings continues to expand our breadth and depth in the domain aftermarket, we use metrics such as relationship type to quantify our success. Strong sales with existing relationships indicates we are servicing our clients at a high level, new relationships means we are securing new sellers and buyers and prospecting well. For Q1-2015, there is a healthy ratio between new vs. existing relationships. Another metric we are proud of is our ability to consistently building our relationships through inbound leads and referrals.

Looking Ahead . . .

We expect to see some of the following predictions materialize through the remainder of 2015 and beyond:

  • Domains in the LN and NL verticals will see a steady increase in value.
  • Market for gTLD will grow and sales for aftermarket premium gTLDs will increase.
  • New StartUp organizations, at Angel investment or Crowd-Funded level, will continue to gravitate to non-dot com extensions or a brandable company name for more favorable initial URL acquisition costs. Popular StartUp non-dot com extensions will continue to be .io, .co and .me.
  • Revenue positive StartUps in later round funding will continue to upgrade their domains to the preferred .com extension and unify their digital brands.

Overall, Q1 was a great success and had an amazing start. We are expecting to have another solid quarter by increasing our sales through continued dedication to our existing clients (buy requests), secure more inventory, new relationship generation, maturing pipelines and new marketing campaigns. Domain holdings has expanded our team in size, function and experience in 2015 and looks to increase the head count and service offerings to help support the increased demands of our existing clients and new demands required by a client base that is growing weekly.

Hope you enjoy the data we just share. We are extremely proud of our accomplishments in Q1 and look forward to sharing even more data next quarter. Stay tuned.

Sincerely,

The Domain Holdings Team

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Domain Holdings Q4 and Annual Report 2014

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Domain Holdings is extremely proud to announce our combined Q4 and Annual 2014 report with our Q4 ending strong with $8,086,642 in total domain name sales. Over the last year our team has proven to be a global leader in premium domain name sales representing a wealth of great domains including:

49.comIdea.comPhonics.com
Addiction.comFlying.comPublish.com
DN.comJumbo.comStock.com
Expat.comMX.comStudy.com
House.comOrganize.comWP.org

Some of the main highlights from Q4 include:

  • $622,049 Average Weekly Sales
  • $26,323 Average Domain Sales.
  • 72.38% of ALL Sales End Users **

** Does not include managed auction sales where the buyer was unknown.

Quarter over Quarter Sales

2014 was a very exciting year for us. We ended the year with almost two $10 Million quarters and showed consistent growth every quarter in terms of units. Domain Holdings also ended the year with a much higher quality of exclusive inventory for sale including many owned by corporate clients never listed for sale before.

q4-report-quarterly-sales

 

Average Domain Sale by Quarter

In Q2 we started reporting our Average Domain Sale by discounting the top 5 and bottom 5 sales.  As you can see by the chart below we had a very consistent average weekly sales range over the next 3 quarters.

q4-report-average-domain-sale

Average Weekly Sales

In 2014 Domain Holdings managed to increased our average weekly sales by well over 100%. We started the year with $263,016 in average weekly sales in Q1 and ended with $622,049 in Q4. The quarters in between were closer to $800,000 per week.

q4-report-weekly-sales

Buyers by Country

The largest 2 markets for Domain Holdings continues to be USA and China. We have seen a continued strong interest in numeric and LL.com domains from the China market during Q4 but also a smaller supply at wholesale prices compared to what was available in Q2 and Q3. What is interesting is the China market interest has expanded greatly to premium .com’s using a wide set of criteria and huge industry end user sales like 360.com (reportedly sold to 360.cn for $17,000,000 from Vodaphone) continue to drive heavy interest from the Chinese market.

q4-report-country

What Domains Sell?

.Com’s are still the strongest segment of the domain name market and we really do not expect this number to change much any time soon. However, we do see more GTLD’s selling, premium .CO’s and strong country code domains. In Q4 our sales were comprised of:

Q4-report-com-sales

 

 

 

 

Long tail domains or short domains? 77% of our sales in Q4 were 10 characters or less.

Q4-report-10-characters

2014 Overall was an amazing year for Domain Holdings and we expect 2015 to be even bigger. So far this year we have secured many amazing names under exclusivity including Adopting.com, Give.comTaiwan.com and the ultra exclusive HongKong.com.

Our predictions for 2015 include:

  • Greater investment from China for premium domains with a slow down in LLLL.com sales due to scarce inventory. (LLLL.com values are expected to increase, just the number of sales will be much lower due to a possible holding position by many current owners.)
  • Higher number of Private Premium Sales reported
  • Continued higher aftermarket sales for the New GTLD’s
  • Further tightening of quality standards for defining a premium domain name.
  • Higher values for premium one word .org’s

Overall we are very bullish on 2015 and the future of domain name values in general.

We look forward to sharing this data every quarter and hope to see you this year!

Sincerely,

Alan Signature

Managing Director

Q3 Report

Domain Holdings Q3 Report 2014

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Domain Holdings is extremely proud to announce our Q3 sales report showing another quarter with almost $10,000,000 USD in sales. While our top line number was slightly down (-3.8%) the number of transactions were up 7.8% and our largest deal was $2.7 Million versus $5.0 Million in Q2 showing a much healthier overall diversity in sales.

During Q3 we were involved in many key transactions including the sale of BentoBox.com, House.com, Organize.com and more. Highlights from the quarter included:

  • $9,554,983 in Total Q3 Sales
  • $796,249 Average Weekly Sales
  • $29,934 Average Domain Sale
  • 300% + Increase in China Sales
  • 73.84% of ALL Sales End Users

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Buyers by Country

Our Q3 sales saw a huge increase in buyers from the China market including both end users and investors. In Q2 only 9.2% of our sales were conducted with China buyers versus 28.1% in Q3. This is a staggering 300% + increase and re-emphasizes the importance of the China market to the domain industry.

Q3 Report - Image 2

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Average Weekly Sales

Q3 Report - Image 3Q3 weekly sales averaged $796,249 vs. $764,278 in Q2 – representing a 4.18% increase quarter over quarter.

This weekly average represented a strong summer for sales and continued strengthening of our relationships across key verticals including the start up community, big brands, agencies and the China market.

We also expanded our custom portfolio management in Q3 for large owners of premium domains increasing our available exclusive premium inventory.spacer-50

Average Domain Sales

q3-average-saleAs a premium domain name brokerage firm our focus is on quality relationships and quality inventory. While the average sale from some companies is much less its important to note that we do not have a marketplace or even our own O&O (owned and operated) inventory. This allows us a geniune focus on premium domain name sales and/or specific buyer requests which removes most of the smaller inventory sales.

In calculating our average sale we removed the top 5 sales and bottom 5 sales to help provide a more accurate overall picture of our performance.

Our average sale increased by 3.15% to $29,932 in Q3 representing a very strong average sale and further verification that the average cost of a premium domain is increasing.

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Unit Sales by Dollar Amount

The vast majority of our sales are confidential and this is a trade off we have to make when dealing with larger transactions. However there are certain trends we can show without identifying any specific transactions and/or parties. This quarter we are introducing a month over month chart to make our sales history more visual and also provide some insight into the range of our highest sales.

q3-chart

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% of .COM Sales

q3-com-salesOne big take away from Q3 results was the overall contribution of .com sales. 97.73% of our sales were .com domains.

As noted last quarter the amount of interest in new GTLD’s has been ever increasing but we are still heavily focused on .com sales from a company perspective. This has to do with the with tremendous amount of premium inventory we have under exclusive representation along with corporate relationships where most of the domains owned fall under the .com TLD

One major note is we have seen more offers on new GTLD’s this quarter than ever before and the demand for both premium .com’s and new GTLD’s seems to be increasing. The new GTLD domains are still finding price points primarily due to the short period since their introduction.

We fully expect the ratio of .com sales will stay a significant portion of our business but also decrease slightly as markets move to incorporate the wealth of options available to people as new GTLD’s continue to gain traction and adoption in the aftermarket.

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End User Sales

Q3 Report - Image 6End user sales in Q3 accounted for 73.84% of all sales. While this number was down slightly from 79.21% in Q2 this actually represents an overall increase in end user sales due to a large sale in Q2.

This number is certainly in line with our company objectives and continues to demonstrate our commitment to putting domains in the hands of people who will best use them. Our biggest success factor here is the quarter over quarter increase in buyer requests and referrals. These account for a much larger percentage of our business every quarter reaffirming our committed dedication to client relationships.

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How We Do It …

q3-calls-emailsQ3 activity on the surface was down with 53,285 emails (-25.37%) and 6,722 phone calls (-43.28%) but this was purely due to increased efficiency by our brokers and technology.

A couple key takeaways can be made from the Q3 activity report however.

(1) We invested in more technology during Q3 improving our data abilities for inventory management and lead generation.

(2) Most of our brokers have been with Domain Holdings for over a year reducing the learning curve for newer hires.

(3) Greater specific buy requests which reduce the amount of targeted outreach to potential end users. There is already a buyer and a specific asset is requested.

Overall, it takes a lot of communication to make a sale. Simply based on the recorded volume of call and emails we averaged 59 calls and at least 480 emails per sale. These numbers are much higher when you include other forms of communication.

The difference in non-recorded events wasn’t deemed significant enough to account for the total activity drop.

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Looking Ahead

With back to back quarters of nearly $10 Million each there is no doubt we certainly we have this mark in mind to break in Q4 and the market for premium domains doesn’t seem to be slowing at all. If anything, we continue to see a tightening of what is considered a “premium domain” and much higher values placed on acquiring the perfect domain by end users.

Last quarter we had the following predictions:

  • A continued rise in value for brandables and great 2 word dot com domains – (very true)
  • Further tightening of what is considered a great domain name – (this continues)
  • Higher interest in social media handle acquisitions – (we acquired 3x what we did in Q2)
  • Higher reported aftermarket sales for the New GTLD’s – (none we can report, a few we know of privately)
  • Greater demand for upgrading domains from CCTLD’s – (this continues to be a big trend especially for .eu and .com.au domains)
  • Increased investment from overseas markets especially China – (almost a 300% increase)

Overall our projections were pretty solid for Q3 and over the next few months we expect a continuation of the same projections.

I sincerely hope you enjoy the data we can share. We are extremely proud to be part of such a great industry and look forward to sharing even more data next quarter.

Sincerely,

Alan Signature

SVP Sales and Acquisitions

Giuseppe

Domain Negotiations 101

Today is the first day of Autumn and we can definitely feel it arriving in Lisbon, as it has been raining non stop for 2 weeks. In a city with over 3,000 hours of sunshine per year, rain is not always the most welcome sight as the town is not really prepared for it. Anyway, it still feels good to walk around the hills when the clouds break for a moment. Last week I met one of my clients for lunch near the Miradouro of Sao Pedro de Alcantara. Looking over the Castle and the Tagus river, the view from there is simply amazing:

Lisbon at Night

As we sat down and started talking about the status of the domain industry, he said something that really struck me: “Giuseppe, lately I really do not have the patience to reply to people that make lowball offers on my domains. I feel like I constantly have to educate them about why a domain is so valuable, and that adds up to a lot of time”. I looked puzzled and asked him why does he not avoid replying to those emails, as that is a common strategy used by domain owners to filter the serious inquiries. If you own 10k+ domains, you have probably been there as well. You receive price inquiries daily on assets from your portfolio, and you simply do not have the time to price them or give a proper response to all the “student’s projects” or domain brokers.

Not only that, but giving a firm price also locks you in at a number lower than the buyer’s budget. That is why, on the sell side, negotiating successfully the sale of your domains comes down to the approach that described in the book Start with No by Jim Camp. Recommended to me by the great Michael Feeley, it explains how people that seek win-win agreements are regularly taken advantage of by more experienced negotiators that are unwilling to compromise, prepared to be perfectly passive to any requests and stay firm on their bottom line.

I have found this approach very common in large domain portfolio owners. When you have the privilege of working for so long with people that have been incredibly successful in this industry, you start to notice specific patterns. One of them is that they never give a price first, and if you ask them if a domain is for sale, they will often reply with – it is not for sale, but (if you really really want it) feel free to make an offer. Why? Because that saves you time by qualifying the buyers, and allows you to never leave money on the negotiation table. Certainly, you might miss out on a number of smaller deals, but, on the other hand, you will have one or two deals that really matter – those high 6, low 7 digits that make the DnJournal headlines.

Not everybody though can do that. Why? The first reason is simply cash flow. Not anyone has a bank account large enough to withstand months without sales while paying renewals fees. The second reason, is simply, well, guts. How long you can resist giving in on a 6 digits offer is likely what will get you the 7 digits deals. No risk, no reward. That one deal that comes through can change your life – if that comes. Many times it did, especially in the late nineties/early 2000 and that is how the most famous domain investors we know to date came to be.

Again, short, passive answers incredibly help your cause. There is not only money and time that you spend in a negotiation, but there is also emotional expenditure. If you spend one hour writing a long email explaining why your domain is worth 7 digits, it is just human nature to feel more committed to the negotiation, and the other party will notice that. As a result, your negotiating position will be weaker, and that will negatively affect your bottom line. The drawback of the Start with No approach is that it is extremely effective, so effective that you are likely to have always the upper hand in the negotiation, and, when the deal is done, buyer’s remorse settles in and that sometimes comes at the cost of the relationship and the opportunity for future deals.

Chess Game

A Chinese proverb says that at the end of a good negotiation the two parties should leave smiling, as they feel both better off with the deal. As brokers, the goal of every negotiation is to start a relationship, not to end one. That is why the approach I prefer is called principled negotiation and it has been described in the Harvard book “Getting to Yes“; a negotiation classic that was recommended to me by our awesome Mr Joe Uddeme. One of the major takeaway of the book is to always insist on using objective criteria to evaluate what is the fair price on a deal. Other relevant points about the book are to separate the people from the problem, find creative solutions (eg financed deal) and making it easy for the other party to say yes.

But let’s take a concrete example. Let’s say you are the buyer in this case and you are looking to purchase a premium domain. It is a common belief, both in real estate and domain that you make money on the buy, rather than the sell side. So how do you do that? Should you ask for a number first or should you come in right off the bat with a lowball offer? When is it best instead to go directly with a reasonable offer? Well, the answer depends on many factors. The first thing we do when analyzing a domain is to answer a few questions: is the domain brandable or is it a premium generic? Does comparable domains have liquid market value? Has the domain been on the market before and is it likely that the owner is aware of the fair market value?

In negotiation, or marketing for that matter, there is an interesting concept called anchoring, which explains how the final price of a negotiation it typically stays tied to the first number thrown in the negotiation. Anchoring with a lowballoffer works only if you are looking to buy a sub premium or brandable domain that has not many comparables, just like shortblast.com or stormstreet.com (these are just names I made up). In that case, starting with a $500 initial offer rather than asking for pricing, might be an appropriate strategy. Only last week, Tracy Fogarty, shared with us the story of how she saved thousands of dollars to her buyer simply by staying firm and presenting comparable sales to a corporate seller after a buy request.

On the other hand, if you are looking to buy phone.com, coming in with a $5,000 offer will automatically disqualify you. The domain is clearly worth a lot more, and you just look terrible in front of the seller. The relationship is now compromised and that will end up costing you a lot more in the negotiation if that is the domain you really want and you are trying to reestablish communication. The appropriate strategy in the phone.com case would be to ask the owner for an initial pricing and move the negotiation from there, hoping to find a motivated seller.

However, this is likely to work with owners that own less than 100 domains, because, as we said, large domain investors are unlikely to respond with a price to just anybody who asks. How do you get all these information about the domain owners about how many domains they own? Well, this is where domain brokers add value on the buy side. By having the industry experience to understand how much names are worth at wholesale value, we are almost always able to get better deals for the domain you are looking for, usually at no additional costs.

If you are an experienced domain investor with years of industry experience, by all means, I do not recommend working with us if you are only looking to buy one specific name – you can probably do the same job yourself. But on the other hand, if you are just starting out in this industry and are looking to buy the perfect brand for your business, we save you time, we negotiate a better deal, we protect your identity and we can tell you usually within minutes what are the pricing ranges of practically all the major domain resellers in the world.

View more of Giuseppe’s domain stories by signing up for his exclusive newsletter !

Have a fantastic week – from Lisbon!

Giuseppe

Giuseppe Graziano
Director of Business Development, Europe
E: giuseppe@domainholdings.com
M: (+1) 561-819- 8468 (US)
M: (+351) 961-150-279 (PT)
F: 1-954-681-4920
S: ggrgraziano
QQ: ggrg

LL Market Report

2 Letter .Com Market Overview

676 LL Domains2 Letter.com domain names are some of the most valuable properties around. But how much do they go for? Who owns them? How much have they increased in value? All of these answers often depend on who you ask, but now there is enough public data to extract some very interesting information.

When I joined Domain Holdings a couple years ago, one of my main priorities was to educate our clients and the general public on domain names. This is still a very small industry and finding the right opportunity is often a combination of gut instinct, emotional attachment and simply asking for the right price in addition to reported sales. There are very few industries which have the same intangible elements to valuation and one main reason why this industry is entertaining and complex at the same time.

Regarding the numeric or 2 letter .com market, I never really found someone in my almost 20 years experience who follows this unique corner of the market so passionately as one of our brokers: Giuseppe Graziano. Giuseppe compiled an exclusive report and today we want to share it for anyone interested in the data behind 2 letter (LL) .com domain sales and ownership.

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Meet Giuseppe Graziano

GiuseppeFor those of you who don’t know Giuseppe – well, it is about time you meet him. He is one of our key domain brokers who routinely sells and acquires valuable domains. He recently brokered the sale of a 2 Letter .com, speaks 5 langauages (Italian, English, Spanish, French, Portuguese) and trains daily in Capoeira (a Brazilian martial art).

Giuseppe also publishes a weekly newsletter and regular articles which are quite different than many industry newsletters sharing both his personal experiences along with interesting industry patterns and new domains for sale.  Of course, another reason you should sign up for it , is because he includes pictures of Portugal that many of us in the office envy – one more factor that convinced us to make Giuseppe a regular publisher to all our newsletter’s subscribers (we want more photos).

The topics of Giuseppe’s 2 letter .com report include:

  • Breakdown of Ownership (China vs World)
  • Breakdown of Investor Ownership (China vs World)
  • Premium Letters
  • Most Popular Letters
  • Market Size and Yearly Turnover
  • Appraised Value and Keyword Search
  • Average End User Sales (10 Years)
  • Average Investor Sales (10 Years)
  • and more.

I hope you find the information valuable – if you do one thing today,  make sure to sign up for Giuseppe’s newsletter. Here is the report:

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By Giuseppe Graziano

LL.com Ownership1. End Users vs Investor Ownership

Based on our research, end users account for about 63.46% (2/3) of the two letter .com market ownership. Notable owners of more than one LL.com include Google, Pearson Education, CBS, General Electric, General Motors and Yahoo.

Several consulting firms like Deloitte (dc.com), Ernst & Young (ey.com) and Accenture (ac.com) also own a LL.com. Airlines are well represented by American Airlines (aa.com), Singapore Airlines (sq.com), Royal Jordanian (rj.com), Lufthansa (lh.com) and British Airlines (ba.com).

Banks and other financial institution owns several LL.com: Morgan Stanley (ms.com), Bank of Scotland (if.com), Deutsche Bank (db.com), Blackstone (bx.com) and Wells Fargo (wf.com).

Media and Telecom companies are well present: British Telecom (bt.com), France Telecom Spain (ya.com), Telefonica (tu.com), Emirates Integrated (du.com) and RT (rt.com). Tech products are represented by Apple (me.com), the recently acquired mi.com from Mi Xiamo, BqReaders (bq.com).

These are just a few examples. Other industries represented include apparel (UnderArmour – ua.com), tobacco (PhilipMorris.com – pm.com), healthcare (GlaxoSmithKline – sb.com) and others, without forgetting Facebook (fb.com).  We can conclude that when brands become truly global and require a certain amount of “gravitas”, purchasing the related LL.com is somewhat a common branding strategy.

LL Ownership

2. Chinese Ownership

Chinese Ownership accounts for less than 10% of the total market, however, about 71% of these domains are owned by investors. Compared to an average of 33% for investor ownership in the rest of the world, owning a LL.com in China is looked more as an investment rather than a platform to build a business. However, since Chinese investors have lower margins investment strategies, they are considerably active in the aftermarket and, as a result, account for a large part of the yearly market turnover.

From our research, investors from the US pursue more frequently buy and hold strategies, resulting in consolidated ownership of LL.com. Several domain investors like Telepathy, FMA, Mike Gleissner and Alex Lerman own more than 10 LL.com each, accounting for a large part of the market. Other domain investors like Reflex Publishing, Digimedia and some other also own more than 5 LL.com each.

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LL.com Most Used LettersPremium Letters

3. Most Common and Preferred Letters

Interestingly enough, the most common letter owned by end users is the letter D, followed shortly by P, S, C and A. Unsurprisingly, the letters the least owned by end users (and therefore mostly owned by investors) are z, o, j, y, x, u, q.

It is also very interesting to note that the preferred starting letter for end users is G, and the preferred ending letter P. The least common starting letter for a domain owned by an end user is O and the least common ending letter is Z.

 

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Values

4. Market Size and Yearly Turnover

The yearly turnover of the market between 2013 and 2014 is 4.14%. This is the number of domain that changed the whois ownership over the last 12 months. Historically the yearly average disclosed transaction has been $478,118, creating a market opportunity of about $13M in potential sales per year. Of course, this is only the tip of the iceberg. Many transactions in this industry (especially larger private sales) are never disclosed and we usually estimate a 20 /80 ratio of disclosed vs undisclosed transactions.

5. Appraised Value and Keyword Search

There is a large difference in Estibot evaluation between the highest appraised LL.com (tv.com – $5.4M) and the lowest (jw.com – $54k) with a staggering difference of 100 to 1. Same goes for the Alexa rank and the number of exact searches for the keyword: while “fb” is searched about 343M times per month, the second one “fa” is only searched 34M.  At the bottom we have “zq” with a mere 10k searches.

6. Sale Outlet

Besides for a large part of private sales, the most common ways of selling a LL.com is through brokerage and auctions. The average sale price through auctions is lower than brokerage, although more consistent towards floor market level. Newsletters account for a small percentage of disclosed sales (6.94%).

7. Wholesale Prices

The average wholesale price over the last 10 years has been $152,583.66. However, while in the years from 2009 to 2001, the wholesale transactions over $200k have been only 12%, since 2012, the number jumps up to a staggering 81%. This is further proof of how the domain market closely follows the stock market fluctuations and the Nasdaq index, as supported by the IDNX index.

8. End User Prices

The average price of all disclosed transaction over the last 10 years is $478,118. This includes both end users and wholesale transactions. The end user average price is usually hard to estimate because of the many undisclosed transactions, however, if we consider the disclosed recent sales of FB.com, IG.com, MI.com and KK.com, we can comfortably say that it is somewhere in between the low to mid 7 digits.

 

LL End User chart

 

LL Investor Chart

 

Back to Alan

How much should you sell a 2 Letter.com domain name for?

This is a question we get asked daily. Giuseppe’s report is quite interesting especially for what concerns the investor ownership in China versus the rest of the world. Once again, the investor market is entirely different from the end user market and, while there is no doubt that investor values are growing, the important factor to consider is the increasing rarity of these domains – especially the continued removal of available 2 Letter .com’s by brands purchasing them. Every time a huge brand like IG.com or Facebook purchases one of the domains, that leaves one less for the investor market. This alone affects value and availability.

In fact, just last night (after this data was compiled) Elliot reported that Andrew Rosener sold CH.com to a Chinese end user leaving one less domain in the investment pool.

How much should you buy a LL.com domain for?

This will depend on the letters, the value, your needs and more. While most agree that a repeating 2 letter combination such as AA.com is more valuable than 2 letters in an awkward order like QX.com – what would happen if your company’s letters were QX? Quite possibly QX.com would be much more valuable to you. It’s  impossible to say how much you should pay for a 2 Letter.com due to all the intangible reasons of ownership unique to your company. Our best advice is to look at market data to understand expected ranges and then analyze whether or not the ROI (financially or in brand value) is worth the expenditure to your company. Facebook paying $8.5 million USD for FB.com is likely easily justifiable but for a local flower shop owned by Fred and Betty the same price is probably not.

To recap: If you want a quick sale, you should really be looking at the investor’s market data to find a good pricing range. However, for owners who are patient and either engage a broker or do outreach themselves, the value can be substantially higher.

Want to work with us to acquire or sell a domain name?

Any one of our brokers can help by contacting sales@domainholdings.com and you can also contact Giuseppe Graziano direct at giuseppe@domainholdings.com

* All data is based on information obtained from Estibot.com, Domain Tools, DNJournal, Domaining.com, Domain IQ and DomainInvesting.com

Q2-2015 Report

Domain Holdings Q2 Report 2014

Q2Domain Holdings is extremely proud to report our Q2 results showing almost $10,000,000 USD in sales. These results are not just a testimony of success for our team but further acknowledgment that our brand continues to earn trust around the world. During Q2 we celebrated a lot of success and also introduced many new features for both buyers and sellers. Some of the main highlights from Q2 were:

  • $9,935,618 in Total Q2 Sales
  • $764,278 Average Weekly Sales
  • 79.21% of ALL Sales End Users
  • 28% Increase in New Relationships
  • 22% Increase in Numeric Domain Sales
  • Over 12,000 + Phone Calls
  • Over 72,000 Targeted Emails

More End Users

We handled transactions for great brands like PolicyMic, Wickr, Mark Cuban Investments, Liberty Tax and many more with 79.21% of all sales to end users (compared to 76.25% in Q1)

Custom Portfolio Management

Started the rollout of custom portfolio management for large owners of premium domains offering custom landing pages, a dedicated broker, portfolio valuation services, portfolio auction management and more. While this is currently an invite only offering we are open to discussing the program with any premium portfolio owner who is interested in increasing overall sales. View some of our custom for sale landing pages by visiting 95.net, 617.com or designerclothes.com

More Inventory

Signed several exclusive corporate deals to handle existing inventory from of some of the world’s most notable brands.

More Training

Invested thousands of dollars on further sales and negotiation training for our brokers and tools to help refine our outbound sales approach.

While we celebrate our success in this report we should also look beyond the numbers and note that the value of premium domain names are growing due to the combined efforts of the industry and greater public awareness. From the success of the new GTLD’s to the millions of new dollars being invested in promoting existing options there never has been a time with such extensive global marketing finally supporting the industry we love so much.

View the full Q2 report below or download the PDF version here.

The rest of 2014 promises to be an incredible year and I hope you enjoy the data we can share. We are extremely proud to be part of this industry and look forward to reporting even higher sales next quarter.

Sincerely,

Alan Signature

Q2 Report 2014