January domain name sales in-depth
Joseph Peterson takes an in-depth look at January’s domain name sales on NameJet.
January 2016 was a busy month for NameJet. Not only did the auction platform deliver its customary mix of expired domains and seller-managed inventory; it also handled the NamesCon auctions in conjunction with Right Of The Dot and (in many cases) a live auctioneer at the Las Vegas conference.
In presenting these January sales data, I’ve decided to exclude all domains associated with NamesCon, whether they were part of the live auction or not. This way, we can make apples-to-apples comparisons when looking at market performance over time. Inventory attached to the domain conference received extra exposure and included a big dose of nTLD domains. That’s perfectly fine, but such special circumstances obscure long-term trends. Better to write a separate article devoted to the NamesCon results than to mix them up with January’s regular auctions.
By excluding NamesCon, the statistics change in an interesting way:
- From 300 sales to 219. NamesCon contributed 81.
- From $2.46 million to $1.53. NamesCon contributed $931k.
- From a mean of $8.2k to $6.9k. NamesCon’s mean was $11.5k.
- From an upper quartile (75th percentile) of $5.0k to $4.1k. NamesCon’s upper quartile was $8.8k.
- Median and lower quartile (25th percentile) are $3.4k and $2.7k, respectively. That’s with and without the NamesCon data – i.e. no change. By itself, NamesCon had a median of $4.1k and lower quartile of $2.7k.
This suggests that NamesCon auctions skewed toward a higher price range than regular NameJet auctions. In other words, some mixture of extra promotion, assiduous curation, and conference high spirits translated into bigger price tags. Still, this mainly affected the conference “headliners”, since the lower half of prices for NamesCon and non-NamesCon auctions look similar.
Even with NamesCon results, NameJet fell regarding 20% shy of its December sales. Still, that previous month did set the all-time record … and by a huge margin. More importantly, even without NamesCon results, NameJet nearly tied its 2nd best month ever, coming within 2.2% of November sales. Keep in mind, NameJet never broke $1 million until last July; but it has done so every month save 1 since then.
The reason for that uplift is easy to identify: China. But China must wait. This month, I’ve put the most active categories at the bottom and the smaller, less predictable categories nearer the top.
| Domain | End $ | Domain | End $ |
|---|---|---|---|
| Oceans.org | 3050 | Apotheke.org | 2877 |
| Contract.org | 2500 |
Let’s start with .ORG – 1.4% by count, 0.6% by revenue. Inside NamesCon, nTLD registries featured prominently at auction. Outside NamesCon, the only TLDs to cross $2k at NameJet last month were the usual suspects: .COM, .NET, .ORG.
| Domain | End $ | Domain | End $ |
|---|---|---|---|
| Milford.com | 7500 | LaPlagne.com | 7055 |
| PineHill.com | 5126 | Milford.com | 2500 |
Here’s a list of GEO domains. La Plagne is a ski resort; the other 2 match a number of U.S. cities and towns. No, your eyes do not deceive you; NameJet noted 2 different prices for Milford.com – both on the same date. As a matter of fact, I noted a third price a month ahead of, during December. Apparently that $15.4k bidder didn’t pay, still, since no sale for Milford.com was included in NameJet’s December note. What then was the price: $15.4k? $7.5k? $2.5k? Until informed otherwise, I’d assume the lowest amount: $2.5k.
| Domain | End $ | Domain | End $ |
|---|---|---|---|
| ePhoto.com | 37,000 | NPost.com | 3200 |
| eVirtual.com | 2400 | eSeminar.com | 2352 |
Recently, I’ve heard bloggers say that prefix domains are a thing of the past. Maybe in the future they’ll feel dated. But right now market appetite for “e” + [keyword] names is demonstrably healthy. That $37k sale ranks 7th out of 200 during January. No categories outrank it but NNN, NNNN, and a minority of LLLLs.
| Domain | End $ | Domain | End $ |
|---|---|---|---|
| 58R.com | 7300 | TT11.com | 4601 |
| HG267.com | 3376 | HG7767.com | 2679 |
Here’s your first glimpse of Chinese-style domains – a pair of short mixed-character items and a couple of numerical domains with that peculiar “HG” prefix. To date, NameJet has sold 23 “HG” numerics. At the peak of the Chinese surge last October, a single month cleared half a dozen of them above $2k. Actually, they first made the monthly notes in July 2014. And here’s a surprise: In terms of price, “HG” domains peaked earlier than you might think – April ($5.0k), July ($7.2k), and August ($4.4k) of last year.
| Domain | End $ | Domain | End $ |
|---|---|---|---|
| Kabei.com | 10,099 | JieQin.com | 9000 |
| JunGong.com | 8100 | XiSen.com | 7800 |
| MaLing.com | 6500 | TouBai.com | 2420 |
| PaoJia.com | 2033 |
Some of these appeared by now in my weekly articles on the expired domain market: Kabei, Jun Gong, Tou Bai, Pao Jia. My assumption is that they’re all Chinese Pinyin, but that may be incorrect. If you have translations to add, comments are welcome. The highest Pinyin sale has been lumped with all the 4-letter .COMs later in the article: ReYi.com ($18.5k) actually means “heated debate” (热议 / rè yì).
| Domain | End $ | Domain | End $ |
|---|---|---|---|
| Cousins.com | 12,522 | Minty.com | 6888 |
| Cathleen.com | 3800 | Prisoners.com | 2622 |
| Sueno.com | 2526 | Scabs.com | 2300 |
| Brasa.com | 2226 | Existential.com | 2101 |
| Nilton.com | 2010 |
Next up: 9 single-word domains. Three you may not recognize I’ve written regarding by now: Sueño, Nilton, and Brasa. Interestingly, the .ORGs we saw above all belong to this single-word category as well.
Actually, the top-selling LLL.com, LLLL.com, and .NET were all dictionary words. “BLT” ($65.5k) = a bacon-lettuce-&-tomato sandwich. DJ.net ($55.5k) implies music. And “TOOT” ($31.8k) is a word I wrote regarding at length.
Categorization can be a bit arbitrary. We could deprive those 3 short-domain categories of their 3 star sales, assigning them to a group of single words. That would raise sales from 9 to 15 and from $34.8k to$196.0k. Thus, depending on interpretation, single-word domains amounted to 4.5% / 7.5% by count and 2.3% / 12.8% by revenue.
| Domain | End $ | Domain | End $ |
|---|---|---|---|
| BLT.com | 65,500 | TPZ.com | 60,900 |
| QNE.com | 27,600 | NVL.com | 25,000 |
| VDN.com | 23,800 | QVK.com | 23,433 |
| JGU.com | 23,100 | AZG.com | 21,800 |
| XZE.com | 19,200 | XVV.com | 18,800 |
| QVJ.com | 17,600 |
Much as I enjoy the sandwich, BLT.com seems to have sold at a value not based on its scrumptiousness. Following all, $65.5k is comparable to the price of TPZ.com ($60.9k), an acronym with no such popular meaning; and the buyer is Chinese. So I’d credit the LLL.com category. Altogether, LLL.com domains comprise 5.5% by count but 17.9% by weight.
Beneath that top pair, the remaining 9 LLL.com domains all contain either a vowel or a “V” – letters widely understood to lower the market value in China. While those “bad” letters do account for the steep drop-off in price under $60.9k, we’re left with something unexplained. Why is the price range among “non-CHIP” (CHInese Premium) LLLs so wide? Normally, China-favored categories sell at prices tightly clustered around a recognized market price. By comparison, $17.6k – $27.6k is an enormous spread.
I can offer 3 hypotheses:
- Market uncertainty leading to erratic buyer behavior.
- Hidden criteria that really do justify spending $10k more or less.
- Declining prices during the month of January.
There is some evidence to support the third hypothesis. The first 3 non-CHIP LLL.com domains to sell during January averaged $24.7k, but the next half dozen averaged only $21.0k. A least-squares regression suggests that (beneath the noise) prices were dropping $189 per day – a rate of $5.9k per month – during this period. Granted, it’s a modest data set; and the correlation is fairly weak (R = -0.452). But the decline is plainly visible, whether or not it holds true generally or continues.
Many pundits with money at stake will tell you that the Chinese surge isn’t over, that this market sector will grow later in 2016. Perhaps. Neither they nor I know the future. But we ought to look for facts regarding the present. During December, 19 non-CHIP LLL.com domains sold between $24.0k and $55.6k. Their median then was $33.3k. A month later, January’s median dropped $10.2k to $23.1k. Let’s repeat: Prices dropped by 1/3 in a single month.
A theory I run across regularly states we’re seeing a lull in sales due to the Chinese Fresh Year (February 8). Optimists proclaim that the Chinese surge will resume once that event (with its celebrations and symbolism) is out of the way. Yet that theory fails to explain 2 months of declining prices.
That plot shows non-CHIP LLL.com sales for December plus January. If we remove the single $55.6k outlier (AUD.com = “Australian Dollar”), then we see prices dropping at a rate of $237 per day ($7229 per month) over the course of 2 months. This 2-month data set gives us more confidence (R = −0.633). Does Chinese spending always decline steadily for 9 weeks prior to the Chinese Fresh Year?
| Domain | End $ | Domain | End $ |
|---|---|---|---|
| 417.com | 169,000 | 3568.com | 45,700 |
| 4728.com | 41,200 | 1251.com | 39,210 |
| 70777.com | 34,501 | 3405.com | 18,000 |
| 89911.com | 8600 | 13713.com | 5900 |
| 5755555.com | 3519 | 998777.com | 3400 |
| 688818.com | 2333 |
NameJet’s top auction during January was a 3-digit .COM. Considering NNNs sometimes clear $800k, that $169k sale – big as it is – isn’t jaw dropping. In general, prices for numerical domains follow the number of digits. Yet there are 2 instances of leapfrogging in the chart above: (1) 5N ($34.5k) > 4N ($18.0k); and (2) 7N ($3.5k) > 6N ($3.4k / $2.3k). Repeating patterns are the rationale.
It’s remarkable that domains containing the unlucky “4” rank 1st, 3rd, and 6th. This isn’t strictly chance. It’s seller behavior. Look back at the LLL.com chart. Why do 9/11 of the domains contain vowels or “V”? Overall, 45.5% of LLLs are CHIPs; yet we see that best-selling group appearing as just 18.2% of NameJet’s top results!
This vanishing-CHIP trend began during December when 19/23 of LLLs contained “bad” letters. So it’s quite real. Compare that to January 2015, a year prior. That month also saw 23 LLL.com sales; but back then 39% were CHIPs – matching the broad 45% we’d expect.
I could explain this discrepancy in 2 ways:
- Sellers have by now sold their best domains to China. If they now have few domains left to sell, then NameJet will now disproportionately find itself selling the “dregs”.
- While prices remain near the 2015 high, sellers are liquidating some of their Chinese-style assets, beginning with the weakest subcategories. Still optimistic their predictions, actions speak louder than words.
If you have another explanation for the prevalence of “4”, vowels, and “V”, then I’d be happy to hear it.
| Domain | End $ | Domain | End $ |
|---|---|---|---|
| WineGrower.com | 10,746 | BeanTown.com | 7600 |
| GreenRock.com | 7200 | BlueSquare.com | 5756 |
| BikeWorks.com | 4957 | CurlyHair.com | 4900 |
| ChinaTech.com | 4712 | Cable Firms.com |
4100 |
| PrimeMortgage.com | 3450 | PayRight.com | 3315 |
| SoulMan.com | 3100 | United Technologies.com |
3100 |
| IsItDown.com | 3000 | StyleLab.com | 2988 |
| BaseCapital.com | 2967 | ShopGreen.com | 2655 |
| VideoInsight.com | 2650 | HangTough.com | 2611 |
| SunProperties.com | 2601 | Korean Restaurants.com |
2566 |
| Business Automation.com |
2408 | ALXNet.com | 2351 |
| DietRecipes.com | 2320 | SnapBox.com | 2300 |
| SodFarm.com | 2200 | ExpressPizza.com | 2000 |
| Malpractice Cases.com |
2000 | PennyLoafers.com | 2000 |
Among these 28 multi-word domains, you’ll see a mixture of
- Invented “brandables” – PayRight.com, SnapBox.com, VideoInsight.com
- “Veristic” phrases – WineGrower.com, CurlyHair.com, KoreanRestaurants
- Colloquial phrases long used by now – BeanTown.com, HangTough.com
Some of the brandables can act as upgrades for existing brands, which tends to raise the price. In this regard, I’ve by now written regarding a number of: BlueSquare, ChinaTech, IsItDown, etc.
It’s worth noting that NameJet sold more multi-word domains during January than LLL.com and numerical domains combined: 14% by count if only 6.7% by weight.
| Domain | End $ | Domain | End $ |
|---|---|---|---|
| TOOT.com | 31,805 | REYI.com | 18,500 |
| SSEE.com | 7500 | VGAS.com | 5800 |
| SIHI.com | 5101 | DOAC.com | 4700 |
| MEAS.com | 4200 | HSNC.com | 4195 |
| MAGG.com | 3955 | BEGS.com | 3900 |
| BDSD.com | 3399 | CACS.com | 3333 |
| JDJW.com | 3300 | DBPW.com | 3209 |
| XMBW.com | 3200 | JPHL.com | 3100 |
| YWEB.com | 3060 | FAIS.com | 2950 |
| WJLN.com | 2700 | QMCC.com | 2671 |
| SCNY.com | 2622 | KMFK.com | 2601 |
| YTQQ.com | 2600 | BDSD.com | 2500 |
| JCNB.com | 2500 | MRGT.com | 2500 |
| SWHT.com | 2422 | AXIE.com | 2400 |
| FWMK.com | 2320 | XHDW.com | 2319 |
| RRQM.com | 2301 | HKNT.com | 2290 |
| ZYTP.com | 2260 | PHPZ.com | 2238 |
| CPPY.com | 2210 | LYZW.com | 2201 |
| JMCL.com | 2200 | JHRR.com | 2150 |
| SBTF.com | 2124 | FHTQ.com | 2119 |
| BQDS.com | 2100 | MJNX.com | 2100 |
| TFKW.com | 2100 | YPTY.com | 2100 |
| SPLK.com | 2098 | RNDP.com | 2085 |
| KFMJ.com | 2050 | QBPL.com | 2010 |
| SGXP.com | 2010 |
Aside from numerical domains, no category is more closely associated with the Chinese surge than LLLLs, for which the word “CHIP” was coined. During January, LLLL .COMs were the second biggest category – 24.5% by count. Yet they contributed only 11.9% of revenue.
Still, the highest 2 sales don’t necessarily belong here. “Toot” is an English dictionary word, and REYI.com is Chinese Pinyin. (See above.) They’re not alone: Other words such as “begs” and “fais” can be found in the chart. Merely removing the top 2, still, reduces this category’s revenue contribution to 8.5%. In that case, their mean price is 1/3 NameJet’s mean price overall.
Here’s a summary:
| Statistic | Dec 2015 | Jan 2015 |
|---|---|---|
| Sold: LLLL .COMs | 142 | 49 |
| Sold: CHIPs | 107 | 34 |
| Sold: Non-CHIPs | 35 | 13 |
| Mean: CHIPs | $3004 | $2441 |
| Mean: Non-CHIPs | $7668 | $7477 |
| Median: CHIPs | $2600 | $2238 |
| Median: Non-CHIPs | $3200 | $4200 |
| % CHIP by Count | 75.4% | 69.4% |
| % CHIP by Weight | 54.5% | 46.1% |
Let me emphasize: These are not the real median and mean prices within today’s market. Remember, nothing below $2k is included in NameJet’s monthly notes. Lately we’re seeing many (perhaps most) CHIPs selling beneath $2k. Yet here we’re looking at averages of whatever rises above that threshold. By definition, these averages are always at least $2k. And they’re biased higher than reality. That upward bias will become more pronounced as the real average slips farther beneath $2k. Therefore, since of declining prices, January sees more upward bias than December did. And this effect especially distorts the median. So January’s real median price for CHIPs is quite a bit lower.
Here’s what you can see:
- The number of LLLLs / CHIPs / non-CHIPs selling above $2k has dropped by a factor of 3 in a single month.
- At the high end, non-CHIPs are not seeing any decline in prices. January’s mean resembles December’s, and its median actually increased.
- CHIP prices fell by 15-20% based even on the shrinking number of sales that do clear $2k. If sales beneath $2k were included, a more severe decline in prices would be observed.
- At the high end, non-CHIPs continue to outperform CHIPs in terms of median, mean, and max sale.
- If present trends continue, CHIPs will constitute a smaller percentage of LLLL.com sales at NameJet. Also, LLLLs themselves will represent a smaller slice of the pie.
Earlier in this article, I looked at non-CHIP 3-letter .COMs and showed 2 months of declining value. Why non-CHIPs? Since January gave us 9 sales in that area but only 2 with Chinese premium letters. No point doing linear regression on 2 data points!
Still, it can be argued with some justice that we ought to examine CHIPs, since they’re the letters China actually prefers. Fair enough! Here are 2 months of declining prices in 4-letter CHIPs. Looking at that scatter plot, you’ll notice 3 high-priced outliers. That’s since December sold a trio of triple repeaters: RCCC.com, MMMY.com, PPPJ.com. It would be unfair to make comparisons while those high sales are present in December but lacking in January. Setting them aside, the decline is less steep but far easier to see.
Even with so many sales submerged beneath that $2k surface, the upper part of the ice berg has – for 2 months now – been visibly sinking. CHIPs have been losing value at a rate of $15.52 per day ($473 per month). If you were to draw a line along the upper edge of that scatter plot, you’d see a much steeper downward trajectory – roughly $1000 per month. Likewise, if sub-$2k sales were visible, we’d see most of them during January not December; and that would tilt the regression line more sharply.
| Domain | End $ | Domain | End $ |
|---|---|---|---|
| DJ.net | 55,500 | YWY.net | 4400 |
| ZHZ.net | 4300 | ZPW.net | 4300 |
| RQW.net | 4200 | RXW.net | 4200 |
| PGG.net | 4100 | YZN.net | 4100 |
| ZMY.net | 4009 | ZKZ.net | 3866 |
| ZLH.net | 3810 | DKX.net | 3800 |
| WMY.net | 3800 | YXS.net | 3800 |
| ZNH.net | 3800 | ZRX.net | 3800 |
| ZSY.net | 3800 | SJQ.net | 3700 |
| YZK.net | 3700 | ZJK.net | 3700 |
| ZQC.net | 3700 | ZXL.net | 3700 |
| ZJD.net | 3660 | DQY.net | 3600 |
| RYF.net | 3600 | TQZ.net | 3600 |
| YZL.net | 3600 | ZNB.net | 3577 |
| DQH.net | 3510 | ZJY.net | 3502 |
| MLQ.net | 3500 | QQD.net | 3500 |
| YXD.net | 3500 | ZBK.net | 3500 |
| ZCX.net | 3500 | ZDY.net | 3500 |
| ZFJ.net | 3500 | ZGH.net | 3500 |
| ZHC.net | 3500 | ZHK.net | 3500 |
| ZJR.net | 3500 | ZJT.net | 3500 |
| ZKD.net | 3500 | ZKJ.net | 3500 |
| ZHR.net | 3420 | XKR.net | 3411 |
| HRX.net | 3401 | LDJ.net | 3400 |
| ZBY.net | 3400 | ZKG.net | 3400 |
| ZNJ.net | 3390 | ZPK.net | 3390 |
| ZCT.net | 3388 | ZLM.net | 3377 |
| ZLY.net | 3377 | LYR.net | 3376 |
| NYQ.net | 3360 | ZBX.net | 3350 |
| ZCD.net | 3350 | ZQM.net | 3350 |
| ZKX.net | 3319 | KPZ.net | 3312 |
| ZDQ.net | 3310 | BXK.net | 3300 |
| SFQ.net | 3300 | XMF.net | 3300 |
| ZHP.net | 3300 | ZQD.net | 3300 |
| ZQG.net | 3300 | ZQX.net | 3250 |
| ZQZ.net | 3250 | ZRB.net | 3250 |
| ZRJ.net | 3250 | ZTD.net | 3250 |
| CQJ.net | 3243 | ZWR.net | 3220 |
| KQN.net | 3210 | ZTB.net | 3210 |
| LHQ.net | 3202 | ZTJ.net | 3202 |
| YZM.net | 3200 | ZCG.net | 3200 |
| ZJN.net | 3200 | YZS.net | 3110 |
| RQD.net | 3100 | ZSQ.net | 3100 |
| RBY.net | 3010 | KQF.net | 3000 |
| QWM.net | 3000 | MAK.net | 2350 |
During the record month of December, 100 .NET domains amounted to 26.1% by count. NameJet sold less overall during January, making its 90 .NET items proportionally much more notable. A staggering 40.9% of domains belonged to this TLD.
Price-wise, it seems every short Chinese category has been slipping; so this 40.9% category only contributed 23.9% of revenue. That’s slightly higher than December’s 19.9% … but with double representation.
By far the highest price was $55.5k for DJ.net. Not only was it the only 2-letter item, it’s a word with commercial relevance. No wonder it came in 13 times higher than the runner up! Of the remaining 89 items, all but the very lowest-priced – MAK.net – are vowelless, “V”-less, LLL.net “CHIPs”.
Are LLL .NETs the late bloomers of the Chinese surge? For the first 9 months of 2015, NameJet sold a meager 1-5 .NETs per month, averaging just 3. Then this category suddenly cleared the $2k reporting threshold with 22 sales in October, 48 in November, 100 in December, and now 90 during the first month of 2016.
In reality, this category began its upward price climb much earlier during 2015, underneath the $2k threshold. And it is now experiencing the market downturn along with other Chinese categories. In this raw scatter plot of LLL.net CHIPs for the past 2 months, you’ll see 1 conspicuous outlier (an $11.2k sale from December). Removing it softens the slope, but you can still see we’re on the downhill.
Even so, that’s a much slower rate of decline than we’re seeing with other Chinese categories. Losing $130 per month from a median LLL.net value of $3.5k is far better than losing more than $473 per month from a median LLLL.com value of less than $2.2k.
Perhaps since LLL.net seems like a “late bloomer”, having only lately crossed the $2k and then $3k threshold, buyer optimism remains higher for this category than for others. It’s within the budgetof those who can’t afford 3-letter .COMs; and it hasn’t been observed plummeting in value as fast as 3-letter non-CHIPs or 4-letter CHIPs, the comparably priced alternative.
Whatever the reason, Chinese domain categories don’t rise and fall in unison. Some lead; some lag. For the time being, LLL.net lags. In the heat of a bear market, some will view assets that exhibit lagging behavior as a safe haven. They don’t need to be right. In the short term, that perception becomes a self-fulfilling prophecy.
