Domain Investing by the Numbers: Renewals, Sell-Through and Real Returns

The portfolio math of buying, holding and selling domain names — and why numeric domains are a category of their own.

Domain investing looks like buying low and selling high. In practice it is a portfolio business where holding costs, sell-through rate and commissions decide profit far more than any single sale.

The single-name view

Buy at 500, renew at 12 a year for three years, sell for 3,500 through a marketplace charging 15%: net proceeds 2,975, cost basis 536, profit 2,439.

The portfolio view

Most names in any portfolio never sell. If you hold 500 names at 12 a year, renewals cost 6,000 annually. With a low single-digit annual sell-through rate, every sale must also pay for the names that did not sell. That is why experienced investors price fewer names higher rather than many names cheaply.

Why numeric domains are different

Short numeric .com domains form a distinct market. They are language-neutral, easy to type on any keyboard and attractive in markets where number symbolism matters. Supply of short numeric strings is fixed, which supports pricing for the shortest lengths.

Developing vs parking

A developed website can turn a holding cost into an income stream. Even modest ad, affiliate or lead revenue can cover renewals and creates a traffic history that some buyers value. A useful site also demonstrates a name's potential to an end user.

Key metrics to track

• Total annual renewal cost
• Annual sell-through rate
• Average sale price and median sale price
• Inquiries per year and inquiry-to-sale conversion
• Revenue from developed names

Model a flip with the domain flip calculator and a developed site with the website valuation calculator.