The Long Term View

Over the past week I spent some time evaluating my domain portfolio, and deciding which names I wanted to invest in for a longer time horizon. My main reason for doing that is I expected a significant and irreversible price increase in a few of the extensions in my portfolio based on this information from Kevin Murphy. I had alerted others through NamePros to the anticipated price increase in case they wanted to register new names or extend registrations.  My main registrar (Namecheap) had for some time offered great 5 year renewal rates on a number of extensions, although as of Aug 20, 2018 they are gone due to changes in the management of the former Famous Four registries.

Why Register for Multiple Years

I think it is accurate to say that many domain investors generally only register domains one year at a time.  Naturally, being optimistic, most hope to sell their names quickly, and registering a domain name for multiple years could be seen as either negative thinking (It won't sell in year one) or wasteful (I sold it so those extra years were of no value for me).  I don't agree.  Let us consider some of the reasons you should consider multiple-year renewals on domain names in your portfolio.

1. You lock in future costs at known rates.  
2. You take advantage of promotions and savings. 
3. With the luxury of future years registrations prepaid, you will be more confident in asking good prices.
4. The additional years will make your domain names more valuable to potential end users, and give them more confidence about long term costs.
5. Deciding which names warrant renewal for multiple years will force you to critically evaluate your portfolio and emphasize quality over quantity. 
6. The long term approach saves you time that can be put into other domain portfolio priorities.

While reasons (1) and (2) were the dominant ones for my recent renewals (and a couple of new multi-year registrations), really all of these factors played a role. My pricing is always value oriented,  but I now feel more confident asking reasonable prices for quality domains (3). I think uncertainty in future renewal prices has made some end users leery of new domain extensions, and purchasing a domain name with multiple future years of registration prepaid does add value for the new owner (4). It is a good feeling that I have a longer term window to set up attractive sales pages for the domains, and to facilitate getting offers.

It was also a good exercise for me over the past week to literally look at almost every domain name I hold and rank them in categories of definitely hold for multiple years, possibly hold for an extended period, or definitely keep only a single year if no interest. For a few domain names I am currently undecided, and that prioritizes where future research is needed. As I limit my entire domain liability, I had specified a total amount I had available to spend, and the exercise of forced me to prioritize which domain names to focus on.

Concluding Remarks

I offer the following points in conclusion.

• Following authoritative news from the domain field will be financially beneficial at times.  Had I not read Kevin's posts, I would not have known about the impending price increases, as my registrar did not inform me. This is one reason to be on social media and  to read NamePros regularly.
• Your domain portfolio business plan should have at least a several year time horizon both for both costs and projected revenue. Renewal costs are a major part of the overall plan.
• It is better to focus on fewer names of higher quality, and over extended periods, rather than a lot of domains you only plan to hold one year. 
• Note I am not saying you should always register for multiple years. It is often a good move to test drive a domain name for a year, see if you get any inquiries, and then review whether you want to keep it. 
• I wish that registrars and registries more frequently offered multi-year discounts. I think the stability would be good both for the industry and for domain name investors.  I was encouraged to see this week that Namecheap now has a 3 years of the .online extension promotion (see  if it is still on should it be of interest to you). 
• Always shop around for the best renewal prices using a tool like TLD-list.  Remember that it may not show all multiple year discounts though, so also do your research and  be alert to time limited promotions.  If your main registrars have blogs read them, and use social media and online domain communities to stay up to date.
• Your business plan and personal branding statement should make it clear which domain names are congruent with your operation and you should make  sure that  your long term acquisitions in particular are a good fit.

Many of the points mentioned here are congruent with the overall advice to domain investors I offered in an earlier post.  One good place to learn about promotions is NamePros - if not already a member, you should be!

By having some of your domains registered for five years in the future, it will help you keep going during down times, knowing that you are in this for the long run.  I guess that is me!

PS

In case you are wondering what I decided to renew for 5 additional years, most were science extension single words and acronyms that I think will be more important in a few years compared to now.  I also have  registered for 5 to 10 years a few that I have development plans, including my main domain website NamesThat.win. I forget who told  me this, but it is good advice to focus on those domain names that you would develop if you had  time.  This tells  you two things: it is a topic with current interest (so development is worthwhile) and that you have expertise in that niche (we sell best what we know best).

Links:

• Famous Four Restructuring (updated column from Kevin Murphy)
• TLD-list (find the best registration, transfer and renewal prices)
• Namecheap
• Advice to domain name investors
• Namecheap Online Promotion (limited time)
• NamePros
• Our site NamesThat.win - thanks for visiting
• Permanent link to this blog post

Original post Aug 21, 2018.

Disclosure: I have no association with any of the companies or individuals mentioned in this post, except that I have a number (somewhat over 50% currently) of my portfolio of domain names registered at Namecheap, and I am a member of their affiliate program.  I also have domain names registered at Alpnames, NameSilo, CanReg, GoDaddy and Web Hosting Canada.

Fine Print

This post is offered for informational and educational purposes only, and should not be considered domain name investment advice. While an attempt has been made to be accurate, there is no implied or explicit warranty, and you are responsible for verifying any information of importance to you. You also accept full responsibility for any domain investing decisions you may make that use data from this post.

I try to be fair, balanced and objective in my analysis.  If you feel this post does not meet that standard, please express your concerns to me.  

In a very few cases there may be affiliate links on this blog. This means I receive a small amount if users visit or make purchases via the link. You do not pay any additional charge due to using an affiliate link, and in some cases your cost will be below the normal price. I receive no identifying information about who clicks, or does not click, any link. I never accept compensation to provide favourable review of any particular service or product.

The text of this posting is ©R Hawkes, all rights reserved. However, you may, without permission, use reasonable length portions of the post as long as a link to this post is also provided. If you wish to use the complete contents of a post, please request permission. I am normally open to reprinting, but will consider each request individually. 

The images used are either those associated with a product or service, my own images, or Pixabay images believed to be available for use without attribution. If you see any image that you believe is problematic, please let us know and we will immediately correct the situation.

Renewal Costs and New Extensions

A discussion in a NamePros thread with respect to new domain name extensions (ngTLD) has touched on the topic of renewal costs.  It is often stated by ngTLD critics that renewal costs are prohibitive as one of their arguments against new domain extensions. I decided to take an objective look at whether this claim is actually supported by data. Here is what I found.

Finding Best Prices

Fortunately for us in the domain community, sites such as TLD-list allow anyone to easily find the best prices for domain registrations, transfers and renewals.  That site updates the data every few hours, so you can readily find the most up to data information for any of the extensions over the numerous registrars that they track.  Several other sites track cost data.  For example, if you look up an extension on NameStat the costs at various registrars are given on the right hand column.  One reason I prefer the TLD-list is that they include reviews for each registrar, and if you scroll to the bottom they will show you have a graph showing registration, transfer and renewal costs as a function of date.  This is useful information to see what a typical rate is, and it also helps you see if current deals being offered in an extension are a god deal.

Legacy Extension Costs

First off, I used the TLD-list data to find the least expensive renewal rate for the main legacy extensions that are widely traded. These data change every few hours, so you may find slightly different values, but these values reflect the best prices as of right now in each extension. Let me emphasize that these are the best prices, and the costs at any particular registrar may be more.

• .com $8.75
• .net $9.78
• .org $9.99
• .info $10.98
• .io $29.95
• .co $21.47
• .ai $70.88

So for the most frequently held and traded extensions (com, net and .org) the renewal price is typically $9 to $10.  This does not vary much, as the wholesale costs to the registrar is only a bit less than this, and competition from the many registrars who handled these extensions keep it from going much higher as well.  Occasionally there are deals offered on new registrations and transfers, but seldom significant ones on renewals. If you browse daily NameBio domain name sales reports, you see frequent sales of .co and .io extensions, so I included those country code renewal rates as well.

Most Popular New Extensions

While it would be challenging to get data on renewals of all ngTLDs (over a thousand), I wanted an objective measure of rates for the extensions most frequently encountered. The nTLDstats site gives registration data for each extension. From that site I took the ten most registered of the new extensions. Together these 10 extensions currently account for 52% of the total ngTLD registrations and a large percentage of ngTLD sales numbers over the past year (at least) - for example see my monthly analysis at this link, and scroll to bottom of that post to see links for previous monthly reports.

I think we can accept the following extensions are representative of the most encountered ngTLDs.  I list the best (note prices updated to Aug 30, 2018) price (obtained via TLD-list) for renewal cost of each extension.

• .top $4.99
• .loan $11.50
• .xyz $8.50
• .club $8.88
• .vip $6.99
• .online $16.99
• .win $11.50
• .shop $25.95
• .ltd $14.46

Four of the top 5 of the ngTLDs all have renewal prices better than the average of the best renewal rates for a package of .com, .net and .org domain names. The new extension renewal rates are all significantly better than some popular extensions such as .co and .ai and many others.

Lest you think these rates are only for some obscure registrar you don't want to deal with, the lowest rates for .top, .loan, .online and .win are at NameSilo; for .club, .shop and .ltd it is Porkbun; for .xyz lowest prices are at Epik, and for .vip Dynadot offered the best rates at the date off checking. These are all registrars I respect and would or do use. Also, the rates at other popular registrars, such as Namecheap, are almost as low.

Premium Renewals

New extension domain names in some, but not all extensions, have certain names reserved and sold by the registry at higher premium values.  It depends on the registry whether these premium prices are only for the original sale, or if there is a premium renewal rate as well. Be cautious of these in your portfolio is good advice, and always check any name you are considering buying to see if it is 'premium' in this sense. I give potential users this advice in my domain descriptions (but potential purchasers should independently confirm the information of course!).  You can readily find this rate by starting as though you are going to renew any particular name using your favourite registrar site. I am glad that the newest significant ngTLD release, .icu, have standard renewal rates even on those that they are selling at premium initially. I hope that becomes standard across the ngTLD space.

Sensible Domain Investing and Costs

A big part of being successful in domain name investing, no matter the extensions you invest in, is to be quantitative and sensible in considering costs and likely returns.  Let's say that you can acquire a certain domain name for $25 initial cost, and the renewal cost in the extension is $5 per year.  If you reasonably estimate that you have 1 chance in 100 to sell it over a 5 year period for a price of $2000, then the investment does not make sense.  Your costs ($25 + 4 x $5 = $45 costs) multiplied by 100 is $4500.  But your anticipated price when you sell the domain is $2000, close, but not enough to make it a sensible investment unless you can improve either the price or the likelihood of making the sale. You should do an analysis such as this for every domain name in your portfolio.

Be Alert to Deals

I have not included the deals you can get on multi-year renewals if you know where to look, wait for the right deal, and shop around. I have renewed a .site for 5 years for $8.88 for the 5 years (not counting ICANN fees - I wish I had registered more at that rate, now gone), a .science for $5.88 (unfortunately no longer available), and you can occasionally register a .tech for 10 years for about $40.00 total. Sometimes I lock in renewal rates for the number of years if I expect to be holding the domain name for a long time because I both regard it as good and more valuable in future (e.g., emerging technology).  I have a number of domains registered for more than 5 years, and a few for 10 years.  Depending on the extension, 10 years is often the longest time you can renew a name. Lets all be smart about renewal costs!

Consider Registration Period

Those not in the domain name investing business often do not realize that, in general, when a domain name is transferred from one owner to another the registration transfers with it.  Let's say I bought a domain name and registered it until May of 2023 because my registrar offered a great deal on the multi-year registration and I wanted a number of years to try to sell it.  However, you bought it right off, and this extra registration now goes to you.  If you get the domain name at the same registrar, but now in your name, via a push, you won't even have to buy any extra registration time.  If you buy it through most resellers, or if the domain is transferred to your account at a different registrar, normally you will need to buy one extra year of registration when the name is transferred.  In this case you would pay one year of registration, but it would now be registered until  May of 2024. One advantage of purchasing domain names through  registrar marketplaces such as the Namecheap Marketplace, is that you will not have to purchase an extra year.  Make sure that you consider the registration period when deciding whether a price is appropriate.  I combine this and other tips from this post in the next section.

Tips

1. Always check whether a domain name has premium renewals before acquiring it. If you do acquire premium domains, take costs into account in estimating the anticipated ROI.
2. Use a resource like TLD-list to find the best current prices for registration, transfer and renewal on any domain name.
3. As well as lowest price, do pay attention to reviews of different registrars when choosing where to register. Sites like NamePros can help learn of experiences of others. Also, even if there is a differential price, it may not be worth your effort to use an additional registrar.
4. In both legacy and new extensions, renewal rates are only guaranteed for a limited period in future. If you feel you are likely going to hold a domain name for an extended period, either for development or domain investment, consider registering for multiple years.
5. The currently registered period normally transfers with the domain name.  Take this into account when considering the price of a domain name, both as a buyer and a seller.

Conclusions

For the vast majority of ngTLDs really being used and held as investments, renewal costs are competitive to legacy extensions, and more often than not actually less. While this is true for the vast majority of ngTLDs, do be alert to premium names in some extensions, and to extensions that have high renewal costs.  You can frequently find extra savings in multi-year registrations, or by shopping around registrars.  Look into the current registration period when buying and selling domain names.

Original post Aug 1, 2018
Minor format change (line spaces, illustrative image - no content change) Aug. 5, 2018.
With the changes in the costs of the former Famous Four extensions I have updated the renewal costs to values current to Aug 30,2018,  and altered text as appropriate. 

Links:

• NamePros link that triggered this study
• TLD-list (best prices on any extension)
• NameStat 
• nTLDs site (statistical data on new extensions)
• Our site NamesThat.win - please visit!
• Namecheap Marketplace
• Permanent link to this blog post

Fine Print

This post is offered for informational and educational purposes only, and should not be considered domain name investment advice. While an attempt has been made to be accurate, there is no implied or explicit warranty, and you are responsible for verifying any information of importance to you.

In a few cases there may be affiliate links will on this blog. This means I receive a small amount if users visit or make purchases via the link. You do not pay any additional charge due to using an affiliate link, and in some cases below the normal price. I receive no identifying information about who clicks, or does not click, any link. I never accept compensation to provide favourable review of any particular service or product.

I try to be fair, balanced and objective in my analysis.  If you feel this post does not meet that standard, please express your concerns to me.  As disclosure, I do have a domain portfolio that is predominantly ngTLD domain names, although I do also own a number of .com, .ca, .co and a few other country code extension domains..

The text of this posting is ©R.L. Hawkes, all rights reserved. However, you may, without permission, use reasonable length portions of the post as long as a link to this post is also provided. If you wish to use the complete contents of a post, please request permission. I am normally open to reprinting, but will consider each request individually. 

The images used are either those associated with a product or service, or Pixabay images believed to be available for use without attribution. If you see any image that you believe is problematic, please let us know and we will immediately correct the situation.