As a domainer, not accidentally letting domains expire is definitely one of the top five rules you should follow. But does this mean you should renew all of your domains for longer periods, maybe even 10 years each?
Let’s crunch some numbers and find out.
For the sake of this discussion, let’s assume you own 1,000 domains and sell 2%-3% of your inventory each year. In other words, you sell 20-30 domains each year.
If you renew for longer periods then sure, you would “waste” money on those 20-30 domains that end up being sold. If you could see the future and know for a fact which 20-30 domains you’ll end up selling this year then of course, you wouldn’t renew those for longer periods.
But still, for a portfolio with a turnover rate of 2%-3% per year (reasonably consistent with a business model which revolves around selling to end users, not domainers), it wouldn’t be *that* big of a waste.
Furthermore, if you renew at the right time and lock in a good price, your overall savings might easily make up for the costs associated with those 20-30 domains.
But what if you’re a flipper who sells to other domainers frequently and has a yearly turnover rate of 20%-30%?
A lot of flippers have considerably higher turnover rates than people who only sell to end users because their profit margins are lower and they (try to) make up for it in volume.
For a flipper, does renewing for longer periods make sense?
In my opinion no, it doesn’t.
Because while 20-30 domains out of 1,000 aren’t that much of a big deal, the situation changes if we’re talking about 200-300 domains.
As a domainer who moves inventory frequently, renewing for longer periods doesn’t make all that much sense.
Ok, if a few of those 1,000 domains are “keepers” that you don’t want to sell unless you receive an amazing offer then sure, feel free to renew those for longer periods but by doing this for your entire portfolio, you’d be wasting money if you’re a flipper.
The conclusion, in my opinion, is simple: the higher your turnover rate is, the less sense it makes to renew domains for longer periods.
July 3rd, 2014 at 1:13 am
Great topic once again. I’ve never renewed for more than 1 year at a time. I’m pretty particular about my domain registrations and have a self-created alert system to automatically inform me when domains are expiring approximately 30 days before they expire. In the last 14 years that I’ve been online I’ve never lost a single domain because of letting them expire carelessly. One must be more disciplined and plan things well. I like your point about domain sellers who make sales often. Obviously guys like me cannot register domains for more than a year at a time because we usually sell 40 out of every 100 domains we register within just a few months of registering them. Of course, we sell at low prices (between $10 to $99) so it’s easier to register just for a year at a time for us.