There has been a lot of talk about three letter.com domain names and their value over the last month. Rick Schwartz came out and said domain investor’s were clueless when it came to valuing three letter .coms.
Rick posted on 9/25
As usual domainers sell way too cheap because they are clueless to the market and what is coming and the true value of a specific domain to a business or to businesses.
LLL.com domains are following the same path. But they are more important and have more value. There just has been no frenzy yet.
3 letter domains are selling for around $25k-37k. Way too cheap!! 1/10 of what the prices should be and probably will be in the not too distant future. LLL.com domains are worth a MINIMUM $100k! Any less is weak. Selling too cheap. A unique asset to fill a unique need of something very specific and you pull your pants down??!! WEAK!
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Morgan Linton then weighed in with a post, Morgan is actually interested in starting to invest in numerics. Morgan wrote,
I agree with Rick, it does seem like Domainers are selling LLL .COMs for too cheap. At the same time, I want to put myself in the shoes of an LLL .COM owner. Supposed I’ve held onto an LLL .COM for 12 years, I originally bought it for $5,000 – I get an offer for $25,000 and think – okay, that’s five times my money and I’ve been hanging onto this name for 12 years, I need to make some money. So it moves onto another Domainer, if they hold it for 5 years and during that time put more time and energy into marketing the name, could they flip it for a 4x profit? Maybe so.
One commenter named Michael (no last name) gave it back at Rick, saying he was out of touch with today’s market:
Rick is out of touch, period. I don’t say this as someone who is jealous, I’ve owned 60+ LLL.com over the years, a couple NNN.com, even a few CC.com.
He says domain investors are selling them for 1/10th of their worth. Duh, that’s just the difference between wholesale pricing and retail pricing. Basically what his “advice” boils down to is don’t ever sell to another domain investor because you can get more selling to an end user. What a revelation. Too bad not everyone got in super early, made a killing on porn, and could sit and wait for the perfect buyer. Most people have to hustle. If he actually believed what he was saying, with his bank roll you would see him winning practically every LLL.com auction today, but you don’t see that.
If I had only bought and held back in the day, I could have maybe afforded two LLL.com. The odds of me selling any of those in the next decade to the perfect end user is practically zero, theoretically it might not have even happened in my lifetime. But instead I flipped them for 2-5x to other investors, bought more, flipped those, and kept rolling up and out. In the subsequent decade I made hundreds of thousands of dollars doing this. Had I just sat and waited I might still be sitting on those same two LLL.com domains having not made a dollar to reinvest.
He’s talking from the perspective of someone who built up enough quality inventory early enough, mostly playing with profits and porn/parking money that isn’t around today, that he could just wait on every single domain and still make a great living. Almost nobody except institutional money can do that today. And even if you have the money it doesn’t really make sense… just do the math.
How many LLL.com would you have to own to sell one for six figures each year? I have it on good authority that the number is more than 250. At an average cost of $25k that’s $6.25 million invested to maybe make $200k a year on average. That’s a 3.2% return, barely above inflation and way below throwing it in an index fund.
Giuseppe Graziano started a marketplace just for LLL.com domain names.
When we look at current LLL.com data, it seems fewer three letter .coms will trade hands this year compared to the last couple (Note: I am talking about publicly reported sales).
So far with three quarters down in 2018, there have been 73 LLL.com sales at Namebio. This compares to 147 in 2017 and 173 in 2016.
Pricing has been stronger in 2018 compared to the two previous years. With 100 less sales 2018 vs 2016 the total sales are higher in 2018.
2016 $7.1m Dollar Volume
2017 $11.4m Dollar Volume
2018 $8.2m Dollar Volume
In 2018 we have seen 13 sales below $20,000, in 2017 there were 36 sales below $20,000 and in 2016 there were 21 sales below $20,000.
So in 2018 17.8% of reported sales sold for less than $20,000. In 2017 24.4% of reported sales sold for less than $20,000. Finally in 2016 only 12% of reported sales sold below $20,000.
50.2% of all 3L.com sales in 2016 took place at NameJet, in 2017 it was 51.7% and in 2018, 23.2% of all 3L.com sales took place on NameJet.
All data courtesy of Namebio