Current Domain Aftermarket and Sale Trends
Many people are interested in knowing about current aftermarket and sale trends in the domain name business. This information helps me with acquisitions and sales, and it can be helpful in making planning decisions.
I operate and maintain a relatively small portfolio of around 500 domain names, so I am not really able to answer this on a macro level, aside from what I see reported publicly. I reached out to a somewhat diverse group of people who I know are active in the business to ask what they are seeing in the domain business. Their thoughts are below.
One thing to note is that a few people mentioned that they would respond and I didn’t hear back yet. If/when they respond, I will be adding them to this article, so it might behove you to come back again in a little while.
I welcome you to share your thoughts on what you are seeing in the domain name aftermarket as well:
Jeffrey Gabriel, Vice President of Sales at Uniregistry:
The trends I am noticing are:
More sales of GTLDs. Not necessarily big money sales, just more transactions compared to last year.
Slower Chinese market compared to last year. Less transactions.
More sales in Europe. We are up about 20%. We did have some fallout when the Brexit happened, business slowed, however a lot of those deals came back.
The USA has grown in transactions but not significantly.
Nat Cohen, CEO, Telepathy:
Still seeing strong demand for premium dot-com domains for use as brands. The long-term trends of increasing global demand, diminishing supply, and rising valuations for these domains have continued throughout the many changes in the marketplace in the last few years.
India looks to be growing market for domains, including for their local .co.in and .in country codes. China remains a strong source of demand. In addition to investor driven demand there are signs that end-user Chinese companies are increasingly entering the market to purchase dot-com domains for their online branding.
Dave Evanson, Senior Broker, Sedo
Aftermarket trends indicate strength in the numbers. Dot com remains King despite continued growth in awareness and adoption of new gTLDs. One word .coms still rank high though an increasing number of 6-figure sales are coming from alternative extensions. Short .coms such as 3-letter still score well as many move to China. Premium dot com inventory is a little light at the moment but still flowing as holders of 20-25 year old domains prepare for retirement. Demand and supply including new and well-funded investors offset by premium domain owners wanting or needing funds will continue yielding healthy brokerage and marketplace sales. More Buy It Now (BIN) priced sales via wide distribution will result in greater share of easy and quick transactions. India is a huge market to watch with expectations for healthy growth although not as strong as China.
Parking is steady or slightly off but remains a quantifiable and effective domain sales facilitator. More portfolio acquisitions are coming with perhaps over $500 million ready to be invested. With more gTLDs for sale some registries consolidated as marketplace feedback demonstrates not all business plans are working. These and other factors should provide a small uptick in, or at least maintain, pricing for legacy long tails.
Andee Hill, Business Development, Donuts:
Donuts is seeing a big uptake in well funded startups and small to medium businesses using our names. We are also seeing companies buying their ideal and descriptive name in the aftermarket. In turn, the more skeptical Dot Com investors are now recognizing the huge opportunities in our names.
In the last six months, the number of larger Donuts domain investors in China, Europe, and Canada have almost doubled. We are also seeing increased activity with Indian investors.
Well funded startups are using (and convincing their investors) that these names make sense. Some examples include
www.17.Media 10 million personal media sharing site
www.Skills.Fund 11.5million funding for bootcamp students
www.Fire.Glass 20 million Data security
www.Data.World 14 million database solution (aftermarket for 10k with registration price as low as $110)
Andrew Rosener, CEO, Media Options:
We are seeing a strong uptick in the demand and prices for one word .com domains and very strong two word .com brands. Demand is increasing and it is getting increasingly more difficult to find them, particularly at attractive pricing. The convergence of these two factors will drive a substantial price increase in top tier one word brands in my opinion. Also seeing a strengthening of the 2 letter .com market again which has been soft since early 2016, post Chinese New Year. Overall I think that top tier .com domain names are beginning another uptick in value and liquidity.
Giuseppe Graziano, Founder of GGRG.com:
I will talk only on the market I know best – which are the short .com domains up to 4 letter and 5 number – therefore if you focus on brandables, new Gs or one word domains, feel free to read on.
In terms of short term trend, we are seeing the market picking up again, especially on the four letter .com side. I do not necessarily see this reflected in the 4N and the higher end of domains, and I would wait before thinking that the market is getting out of its bearish outlook. The conferences in China and the buy limit order on some platforms definitely helped though.
The most important long term trend is the depolarization of price ranges. If you look back at 2010, there were 2 letter .com domains selling for $100k and others like FB.com selling for $8M. This is not the case anymore, and all short domains (with notable exceptions) trade between ranges. This is both good and bad depending on which side you look at the market. If you are an investor, this is bad because there are less market inefficiencies to profit from – at the same time it is good because the greater market efficiency is attracting more people to the industry.
Many of these conventions are actually arbitrary – for example why a four letter .com chip should be worth 4-5 times more than a regular four letter and why a 2 letter .com with vowels should be worth half the price of a Chinese premium, is something that I do not really see reflected in the end user market. These market inefficiencies is where the intelligent long term investor should, in my opinion, focus on. And this is where the smartest people I know, are actually focusing on. If you are interested in these and other market updates, I cover these topics in my newsletter.
The market for short liquid domains is still very much alive and recently there have been signs of movement in the right direction.
For many months now, since the end of last year, prices have stagnated and even in some instances regressed in certain categories, for example three letter .com.
China are once again buying and this has been reinforced by a few domains selling to end users. One such example is tmk.com which apparently fetched a six figure USD sum. I suspect demand and prices will increase for these kind of domains in the fall so now might be a great time to buy.
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