In my opinion, premium renewal fees are a huge problem for any domaining-related business model. Let’s assume you register 10 new gTLDs with premium renewals, $300 per year each and hang on to them for 5 years. In other words, your total investment would be $15,000 over that five-year period.
Alright, let’s assume you sell two domains at $5,000 a pop.
If you tell others about the sales on a forum or in the comment section of a blog post, you’ll probably be congratulated. What those people don’t know however is that you haven’t even broken even yet. Since you own 10 domains and sold two in five years, you basically moved 4% of your inventory per year.
Moving 4% of your inventory per year is a lot, for example it’s considerably higher (about two times higher) than what companies such as BuyDomains report if I’m not mistaken. It is true that since such companies own lots and lots of domains, they aren’t as “picky” as a domainer who only invests in ten domains but still…
Ok, 10 domains isn’t a large enough sample to draw amazingly relevant conclusions but you get the point. In our case, you’d need a 6% yearly turnover rate just to break even. Obtaining that with new gTLDs when you have to also explain premium renewals to end users won’t be easy at all.
Personally, I just don’t see enough upside when it comes to premium renewals. Maybe with super premiums such as Insurance.gTLD I guess but those are usually on the collision list, held back by the registry, at a very high initial cost and/or with a very high premium renewal fee. Again, maybe this could work with “mega premium” terms but in most cases, the potential is just not there in my opinion.Advertisement: DomainingServers.com lets you host UNLIMITED domains at $0.98/month and we're putting a LIFETIME money back guarantee on the table (if you're not satisfied, we'll issue a full refund). To place an order, click HERE.