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discuss Riding the tsunami wave with your domains (upcoming economy crisis)

NameSilo

twiki

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I'm saying "upcoming" because we ain't seen much of it yet. Anyway.

A month ago in a post I was saying I expect a good year in domain sales. Then April came and .... poof! I was wrong - the downtrend came suddenly and much sooner than I expected.

Although some sellers here still have had a great April, some had their best month ever. And my own April sales? They were normal, because in the first week I sold enough names for the whole month. But then, for 4 weeks (last 3 weeks of April and first week of May), I've had almost silence. Occasional lower value sales I don't count much.

( Edit: I still have some sales here and there in May so it ain't all that bleak for me personally. Plus I have other opportunities as well so I can't complain, overall I am on to a normal month as well )

But I wasn't entirely wrong. And this is what this post is about. Plus, what to do next.

Was just watching Bloomberg and I saw Larry Summers saying that "the tech companies are still going to be the biggest ones during this crisis" - not an exact quote, but anyway. I don't like the guy (at all) but on this, he's right.

I mean, what do we expect to come in here and replace the tech zone as the biggest purchaser of domains (what interests us)? Mom and pop shops? Big pharma? etc - No, the tech is still going to be here. And tech / finance related domains will still continue to sell, albeit at a lower level.

The problem is, though, that fewer names will likely sell. That is already here. Since NASDAQ is already -25% YTD, we can expect that to reflect in most of our sales. Now the question is, what to do about it. Here's what i thought:

- The problem we have is, math will not work out anymore for many domainers. Solution for this is? Get better names, even if pricier. Improve the overall quality of your domains.

Especially those of you guys with lower margins (Edit: and lower value names - I've been there, and got out of that). The higher your % overall profit margin is, the lesser the chance you will go underwater. I know, it might sound counter-intuitive in this market to buy higher priced names; but the less renewal cost pressure you have, the better off you will be.

- Don't renew your questionables. Those of which you aren't 100% sure they will be sold someday for a lump sum. If they don't sell before renewal, let them drop. Chances are you will still find them appearing out on the drops market.

- Don't steep reduce prices. And don't panic. If you decrease your prices right now, you will likely lose overall. The market is used with these price levels and the problem is not one of affordability, but one of demand. Demand will be less (Edit: because tech founders are panicking and will postpone their investment, everyone says hold to your cash right now which is both a safe and dumb advice as we all drive the crisis further with that holding) - but good names still sell for high $$$.

If you reduce your prices a lot, chances are right now you will still sell the same names but for less over the next months etc. So don't do that.

I've reduced some of my prices from say $2988 to $2488 - where they were high anyway - but otherwise nope. Also I've tested sheer discounts and yeah, doesn't work - as expected. So I would still hold to that pricing if I were you.

Besides, if we all start panicking and selling for cheap we will achieve nothing else but drag the whole domain market down.

You can try clearing your expiring ones here on NP though - nothing bad in trying that.

- Stay tuned to what happens and watch the NASDAQ index (and other factors). Including crypto - even if you don't have crypto names, chances are the better bitcoin will be, the better our names will sell as well. Because it's all in the tech bubble that started to burst. And yeah, we have bubble after bubble about to burst next - unfortunately. But it was all expected and predicted in the last years. They say right now, the biggest financial in human history might be happening next. Can't comment on that, but guys like Robert Kiyosaki etc have said it.

- Reduce your buying. This is the worst time to hoard domains. Cut from the list all those that are questionable and stick only to the top ones. Same applies to what you renew - only renew your top ones. The less junk you have, the better off you will be.

And some things that might happen, but we will have to see it first:

- Great names might be dropping and become available for catching or at auctions. Chances are auctions might end with much lower numbers on good names that are worth holding on long term.

- Domain name registration and renewal prices might fall down. I know this hasn't happened (ever?) but at least to me, it is expected to happen. (Edit: the opposite would be a dumb move for the registries)

If ICANN keeps these prices they will soon realize that a lot of their business will go down - and domain investors play a big role in that, we roll like half of their revenue through our portfolios. Decreasing prices will allow us to get more names and still continue to drive revenue not only to the registry but also to the registrars, including through their cut of domain sales etc.

My plans are: I wont' renew half of my portfolio (the questionables), but won't reduce price nor clear for dirt cheap on NP (not worth the hassle for me). Whoever really wants the domain will buy it in the last 2 days or desperately email me after they expired, to make sure they can still get it and not have the name ending in DC public auction - seen that lots of times.

That's it for now, if there is more I remember right now I'll post that. Thanks!

Edit: If you have any such due diligence tips for hard times ahead, don't be shy, please share them as well below. We all NP members here would be glad to learn from you.
 
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Primary Names

****** xXx ******
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I have a few offline businesses but nothing has brought me returns on my investment as domains but I agree that sales have completely dried up in the last one and a half month. Up till then I have been making regular xxx-xxxx sales every month.

Recently, I have been adding domains to my inventory but your post made me realize what if it is not about the inventory ? Although I believe I have decent quality inventory... still I believe in numbers.

thanks for the heads up I will give it a break for a while now.
 

twiki

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I have a few offline businesses but nothing has brought me returns on my investment as domains but I agree that sales have completely dried up in the last one and a half month. Up till then I have been making regular xxx-xxxx sales every month.

Recently, I have been adding domains to my inventory but your post made me realize what if it is not about the inventory ? Although I believe I have decent quality inventory... still I believe in numbers.

thanks for the heads up I will give it a break for a while now.

For me, domains are also one of the best investments I made, and I also believe better than many other forms of investment.

But times are rough - for all industries.

It is about the inventory, but particularly about the quality of it. In rough times, yearly STR % will decrease, for obvious reasons. Then what matters is the margin, because this decrease will begin eating margins fast.

One needs high value domains to ride this out. Fewer perhaps, but definitely better.

Low-quality, xxx range domains will probably be hit the worst - due to increasing renewal pressure.
 
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There are not a lot of catalysts for the economy improving soon IMO.

There are still supply chain issues, largely related to COVID.

There are geopolitical issues, like the war in Ukraine.

There is political upheaval.

There are asset bubbles all over the place from crypto to collectibles to NFT to (meme) stocks and everything else.

The latest nonsense with LUNA and "stable coins" is unlikely to help.

Interest rates are going up. The supply of free/cheap money to inflate assets is over.

Long term I will keep investing in quality assets be that domains, stocks, or other.

When times are good I have renewed my best domains for years in advance to prepare for when times are not so good. Expect the best, prepare for the worst is a core part of business and just life in general.

Brad
 
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inforg

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I had a great start this year, so I always get way ahead on renewals. Based on what I am seeing now, I'm glad I did. I am about 8 months ahead at this point, and my parking revenue would cover a couple more months.

I generally won't drop much unless it gets to the point where I would have to start putting in significant fresh money to pay renewals.
 

twiki

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Even if a tsunami happens, the water doesn't disappear. It just changes location. My point of view.
You got it all wrong.

Nobody says water disappears. But you should look into what the Great Depression brought, short example, Hitler? There's always so much to learn from history. Oh, and during such times, no asset is truly a safe haven. Time is. That, if your setup gives you time.

Good decisions now will have a significant impact on our revenue and lives in the near future.

That's the point of this thread. Not that the world ends - or water disappears.
 

twiki

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:) just make more money ;) .. and consume less news :) .. my pill against just another economy crisis

best!! H

That's one way to deal with it, and I partially use that (consuming the minimum amount of news needed... because obvious.)

However, the ostrich method (sticking the head in the sand, if that's unclear to anybody) might not be the wisest approach in such times. Because this isn't your average global turmoil. This also ain't 2008. It's something of a much larger magnitude.

It's good to be optimistic, but it depends - on the place and time. You know, what is an optimistic guy in the Wild West? = a pessimistic guy with a bullet in his belly.
 

twiki

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We have to adapt all the time. In any case everyone can understand that what we live is the intro of ww3. Well, I will die as good teacher, domainer and soldier.
We have to adapt all the time indeed.

But hopefully none of us is about to die though and times will turn to better. I don't think ww3 is coming although it looks like promising times for that. I still have (some) faith left in humanity. (optimistic side of me who hasnt' yet eaten a bullet)

But lets' not drift off-topic and stick to the subject of this thread. Which is, what do we need to do in order to protect our income if domain sales go to say 50%, or 25% of what they have been so far.
 

kite26

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I personally have break up with humanity my friend. I don't follow mainstream philosophy, because people are away from Christ's street. So, I don't have faith on humans now, sorry. However, I believe that God will not allow humans be converted to cyborgs, in the name of illness cure. I don't believe fake pandemics, laboratory meat, and planned food crisis. The devil's plan is the full control of humanity, God will stop it. There is the God's red line.

Do you think I am drunk?

Autumn will be very hot. Not off topic, all things are connected. How? Because anything built by humans can't be perfect, like crypto or the whole economic system. We are obligated to fight for a better world to win real freedom. In the name of Jesus Christ.
 
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zomainhacks

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May is already my best month ever but only thanks to a single outlier, for the rest silence for the entire April.

Domain name registration and renewal prices might fall down. I know this hasn't happened (ever?) but at least to me, it is expected to happen. (Edit: the opposite would be a dumb move for the registries)
I agree with almost all you said except on this, I think that at some point domain retail prices will go up as the rest of the goods in the market.
Frankly I'm expecting renewals going up and not down, also consider that lowering the renewals might be interpreted as a very bad signal in the market.
 
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twiki

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May is already my best month ever but only thanks to a single outlier, for the rest silence for the entire April.


I agree with almost all you said except on this, I think that at some point domain retail prices will go up as the rest of the goods in the market.
Frankly I'm expecting renewals going up and not down, also consider that lowering the renewals might be interpreted as a very bad signal in the market.

I'm talking about depression here. The serious and last part of the economical crisis.

For now we're in stagflation, and during this time prices go up - a lot.

If domain prices will go down, it will happen at a moment when they will not be any bad signal anymore, cause nobody would need any more bad signals in order to clearly see what already happened. Rather, it would be an alignment with everything else. I thin it is rather logical for them to do so in those times.

But again, we will have to see, nothing is guaranteed.
 

karmaco

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Domain renewals and registrations will continue to rise just as they started to in December 2021 another hike will take place in Dec 22 and another in December 23. The increase is staggered over years and set in stone.

I haven’t had any less amount of sales and inquiries. In fact it might be a little up compared to same time last year.

I think the ones who may suffer this year are low level XX to XXX flippers as domainers who usually buy those may begin buying less. Sky is not falling quite yet.
 
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I'm talking about depression here. The serious and last part of the economical crisis.

For now we're in stagflation, and during this time prices go up - a lot.

If domain prices will go down, it will happen at a moment when they will not be any bad signal anymore, cause nobody would need any more bad signals in order to clearly see what already happened. Rather, it would be an alignment with everything else. I thin it is rather logical for them to do so in those times.

But again, we will have to see, nothing is guaranteed.
Less than a month and a half ago you were talking about a booming economy, now you are talking about a depression. What happened?

https://www.namepros.com/threads/good-news-we-should-expect-a-boost-in-domain-sales-next.1270048/

At the time I called the stock market a dead cat bounce, which it seemed to be.

I think the reality of the economy is somewhere between those two extreme positions.

The bottom line is a lot of future wealth is made by acquiring quality assets in a down market.

For instance I entered heavily into the domain market during the 2008-2009 crash. In retrospect, it was quite an investment opportunity.

Brad
 
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twiki

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Less than a month and a half ago you were talking about a booming economy, now you are talking about a depression. What happened?

https://www.namepros.com/threads/good-news-we-should-expect-a-boost-in-domain-sales-next.1270048/

At the time I called the stock market a dead cat bounce, which it seemed to be.

I think the reality of the economy is somewhere between those two extreme positions.

The bottom line is a lot of future wealth is made by acquiring quality assets in a down market.

For instance I entered heavily into the domain market during the 2008-2009 crash. In retrospect, it was quite an investment opportunity.

Brad

I already explained in the post: I was wrong. Jan - Feb were good for most domainers, March was excellent for me. Even April went OK for me overall, bottom line. But the dead cat is already not bouncing anymore; that part is clear.

While finance and tech will still continue to be a big part of our sales (what else could replace that?), the sales will obviously be fewer, or significantly fewer. How low will it go, remains to be seen.

The thing is, I did not expect tech to go down so fast. For some reason I was betting a good 2022 and perhaps a bad 2023.But obviously bubbles are bursting already and that's highly visible already.

Indeed, quality assets is the key term, as to what to do next.
 

zomainhacks

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If domain prices will go down, it will happen at a moment when they will not be any bad signal anymore, cause nobody would need any more bad signals in order to clearly see what already happened. Rather, it would be an alignment with everything else. I thin it is rather logical for them to do so in those times.
You might be right, but in general I think there are two opposite economic forces driving in opposite directions, what will prevail is only to bee seen.
Maybe we will see lower renewals for expensive gTLDs and only the already scheduled price increases for legacy TLDs (?) Everithing really depends on the magnitude and duration of this recession.

Personally I think the slowdown in sales will not last for more than 1 year, so I don't really see renewals going down.
 
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Hi

like what was said before
it all depends on what type of domains you are holding.

if you're focused on tech and tech is sucking, then you may experience anxiety
but...
if you've got other flavors in your ice cream shop and it's hot and folks want a lick of something cool and sweet...
then the sky ain't falling.

imo...
 

phaethon

Established Member
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[QUOTE="twiki, post: 8597358, member:

My plans are: I wont' renew half of my portfolio (the questionables)

[/QUOTE]

Firstly, I think your posts are very useful to old and new domainers, however when someone owns 20K domains bought mostly over the last years, I'm really wondering about the quality of those domains. Then, I saw some domains that you offered here for 11 bucks I think and I would not take them even for free. You are way more experienced and successful than me, but I just wanted to make that point..
 
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