Domain Renewals: The Silent Killer

If you are buying domains and you say to yourself that you will hold it for a year and then decide to renew, you are buying the WRONG ones.
Rick Schwartz

One of the great joys of domaining is waking up and seeing the words, Your Domain Has Sold!, in your inbox. There’s nothing better than earning several hundred, or even several thousand, dollars while we’re sleeping. But there’s another, more insidious, process that also occurs while we sleep. It’s the silent cancer that eats away at the money in our pocket and it’s called, domain renewals.

Every day the clock is ticking on the hundreds (or thousands) of domains we own. Renewal fees come due night after night. For every thousand domains in our portfolio the annual renewal cost is about $8,000 per year. That’s $666 per month or about $22 a day. Yikes!

With numbers like that we’ve gotta be careful and make sure our portfolio is a clean, lean selling machine with no dead weight. Otherwise renewal costs will eat our profits faster than an African tapeworm. So how do we avoid that?

First, know the telltale signs of a toxic domain:

  • No inquiries or offers from end users after two years
  • Rejected by two or more brandable marketplaces
  • A zero Estibot valuation
  • A GoDaddy appraisal under $500
  • No Google traffic
  • No CPC value
  • No prior owners (check it here)
  • Never had a website (check it here)

Those are usually the kind of domains you wanna get out of your system.

Other suggestions for keeping your portfolio healthy include:

Low cost registrar – You need a registrar that’s reliable and has reasonable rates for renewals as well as new registrations and transfers. It should also have a user-friendly platform and the features you need like free forwarding, fast transfer etc.

Avoid Auto Renew – In my opinion you should never put your domains on auto-renew unless they have liquid value (ie 4Ls etc). Why? Because it forces you to look at every domain and reassess its value in the light of the past years performance and trends. If it’s dead wood, dump it. If you keep it, check the BIN price and adjust it up or down according to its age, current trends and value.

Ask a Friend – Every quarter, send a list of upcoming expirations to a domainer friend whose opinion you respect and say – “if these were yours which ones would you renew?”

Burn the Dead Wood– Consider deleting or liquidating a small percentage of your portfolio every year. There are almost always some domains that have fallen out of favor and that we no longer believe in. Don’t let mediocrity drag your portfolio down.

Upgrade – Before buying new domains ask yourself “will this purchase strengthen or weaken the potency of my portfolio?”

Have a Plan – What kind of a domainer are you? Brandable? CHIPs? Flipper? Investor? Outbound sales? Passive sales? Etc. Where do you want your portfolio to be next year? How about three years? Avoid spreading yourself too thin by owning brandables and a little CHIPs, and a few nGTLDs and some generics, some emojis and some dot orgs etc. There’s a monetary cost in the learning curve for each sector. If you spread your time, energy and bankroll too thin your success will suffer. Don’t chase the shiny new objects. Stick with what’s working, refine it, reinforce it and then think about diversifying slowly.

In summary
Minimizing your renewal costs will go a long way towards maximizing profits and could be the difference between making money or hiding losses from your wife or husband. These tips and tricks could help you squeeze your domaining dollars, maximize your yields and give your business plan its best possible chance to thrive and succeed.

Till next time…. May all your sales be to end users!

Keith deBoer

Keith DeBoer is a part-time, domain investor with an emphasis on brandable domains. He's a domain industry writer with published content at BrandBucket, DomainShane and NamePros. He's also a brand ambassador for BrandBucket and by day, he works as an Internet consultant.

18 thoughts on “Domain Renewals: The Silent Killer

  1. Thanks, Keith for this important post. As domainers, we LOVE to read about profitable flips and big sales but the cost of having a portfolio with unsellable domains and how it can eat away any past profits is often ignored. It’s human nature to remember that good stuff, those sales you’ve made, but ignore or forget about all those domain purchases and renewals that will most likely never result in a sale. I started trimming my portfolio two-years ago and went from more than 1000 domains to 370 today and it’s arguably one of the best domaining decisions I’ve made.

    The only thing I disagree with is the rejection of brandables site. They often reject great names and I would not use their acceptance or rejection as an appraisal in any way.

    Your other advice is golden imo. Your tip to always UPGRADE when adding a domain name to your portfolio is the best of the bunch. Instead of registering 25 domains a month for $10 each that most likely never sell, try and purchase a great brandable .com for $250 every month from NameJet, GoDaddy Auctions or NamePros. It’s a lot better to end the year with 12 decent domains that have a good chance to sell one day and only add $120/year in renewal costs instead of ending the year with an extra 300 low-quality domains that add an additional $3,000/year in renewal costs to your portfolio. Try to buy assets, not liabilities!

  2. A very good read, thanks Keith for the insights. Some of my domains are edging close to renewals and this article basically brings reality straight home.

  3. Hi,
    Mostly great advice but I do agree with Doron Vermaat about brandables.
    From my experience, often there is no rhyme or reason as to what’s accepted
    and rejected apart from the most obvious criteria.

  4. The other problem is Keith the price might be wrong. You might have a fixed price of say $10,000 and the name is probably never going to sell at that price.

    The odds are against it.

    However, there might of been several buyers at $2,000, $900 or $500. If a name has been at a low price for a long time, than the odds are looking bad and it needs to go.

    I sold a name at BB there that I held for years which I thought would never sell. In fact, I did not understand why BB even accepted it. It was Long[Like-Running-Just-much-slower].com and it sold.

    You have to balance belief in yourself as a namer with cold, hard data. On two words names you have to look hard at the NameBio data.

    You need to forensically analyse each word against NameBio.

    I would ignore other people’s opinions. You need to look at your own sales data and if you are playing the short game, you need at least 2% sales rate.

    Checking TMs is one way of getting things in shape. Think about it…if a domain is in fact a TM, your odds of a sale generally go down. So you might be carrying dead wood that is dragging things down.

    The only solution is to search by hand against USA and UK/EU TMs to eliminate dead names. It’s best to do this before you register.

    So much for the “quick easy money” of the domain game! lol

    1. Hey Alan,
      Thanks for taking the time to read and then write such a comprehensive essay on your tips and tricks for keeping your portfolio sharp and maximizing profits. You and Doron have added another big layer of experience, insights and value to this post!

    1. Hey Green Jobs, Thanks for reading 🙂
      For those not familiar with the phrase “death by a thousand cuts” it originates from a horrific form of capital punishment practiced in ancient China. In more modern times the phrase is used to mean a big financial loss that occurs as a result of many smaller ones.

  5. Another way to figure if a domain is a keeper is to check the whois history at GD.
    When you pull out your domain list from GD you can see how many whois searches have been made on your domain.
    Thats a neat metric imo.

  6. Thank you Keith, great to see you writing again!

    @Doron while I’m all for trimming bad names from portfolios, there is no getting away from the Math of the “Brandable Domain Game”.

    Sales are a function of quantity. To sell more, we need more!

  7. Brilliant write up👌 very useful and practical tips for domainers- new as well as experienced 👍 . Equally useful inputs from fellow domainers as well, especially by Doron about the best way to upgrade your portfolio. Thanks to all

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