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.
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!