Supply and demand and new TLDs…what once was scarce is no longer.
Over the weekend there was quite a hubbub over at DomainInvesting.com about the availability of single letter domain names in new top level domain names.
In short: they are available, albeit at a premium annual registration fee. Although prices seemed to fluctuate over the weekend, it seems that the standard price is $400.
Since you have to pay this fee each year, the domains aren’t actually $400 compared to domains with lower annual renewal fees. But they’re cheap when compared to how much people have paid for single letter domains until now, even in alternative extensions such as .biz.
Here’s the reality: your single letter .biz domains are worth a lot less now than they were in 2009, when people paid close to $10k a pop for them. What was once a scarce resource is now relatively plentiful.
For each hundred new TLDs that come out, there are 2,600 single letter second level domains. There will be hundreds of new TLDs coming out, so a couple years from now there will be over 10,000 single letter domain names in open new TLDs.
There’s no way each of these will sell for around $10k like the .biz ones did.
Sure, some will sell for more, but most will sell for less (assuming registries allow them to.) If registries were to auction them all off, even staggered over two years, I’d expect the median price to be below $1,000.
Some single letter domains might be worth the $400 recurring charge Donuts is asking. Just remember: the supply keeps getting bigger.
Acro says
There is a difference: most gTLDs are specific to a trade, industry, function etc.
While x.bike makes sense for sports/cyclist boffins, it’s not on the same level as others, e.g. x.singles, or z.photo etc.
Premium prices differ too, not all single letters are created equal. In the end, one should get what they like as a keyword + gTLD combo.
Long story short: investors should have a concrete strategy before going all ‘Pacman’ on gTLDs. 😀
Richard Downs says
Just to let you all know, not all Gtlds have a renewal rate of premium purchase price. Ours are priced at standard renewal rate through your registrar of choice. You pay the premium fee then we release it to you.
Andrew Allemann says
“Ours” being Famous Four Media, correct?
Colin Campbell says
After talking with a number of domain investors over the last year, the high renewal price really increases the carrying costs. I have no doubt that at a price of 15 dollars or below the result will be quite different.
Andrew Allemann says
Here we’re not even talking about the $40 usual fees. If you buy a domain for $400/year and think you might have to hold it 10 years on avg to sell, you’re really paying $4,000. Compare that to a domain you buy for $400 up front and $15/year afterward.
Joseph Peterson says
A.org is a single letter brand name.
A.biz is perhaps a single-letter brand name. Or you might consider it a very short 2-word brand name.
A.photography is a 12-letter, 2-word brand name.
Tony says
Agree with Joseph Peterson’s concise and accurate post.
X.Biz is much shorter and more generic than X.Ventures. They are not comparable.
Howdy Doodie says
removed – fake email address
Steve says
Those didn’t look like single digit domains to me. They all had 9 digits. While many may pretend the right of the dot digits don’t count you still have to type them in for the site to resolve.
As for single .biz they would be 4 digit domains which imo would be much better from a mobile/car driving perspective……. less accidents.
Andrew Allemann says
There will be plenty of three letter TLDs coming out as well, and the domains will still be worth a lot less than the .biz domains sold for.
Steve says
Sure, my point was just that there are no 1 letter domains anywhere and never will be.
Cheers.
Ms Domainer says
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None of these new gTLDs are compelling enough for me to invest in them as a domainer.
If I were selling clothing or bicycles, then maybe. But guru? A little too hippy dippy for the average business person. Ventures? Well, I suppose if that is part of your company name, but otherwise, it seems lame. Why not .inc or .corp? And we already have .co.
Also, I find pricing problematic. Paying $400 (1 letter) for a first year reg makes sense, but all of you excited buyers are going to be paying $400 for renewals, unless you unload it on another domainer. I don’t see end users rushing to buy these, especially when they get wind of those renewal fees. This is the very pricing scheme that has held back .tv.
Some future ones might spark something in me, but any purchases will be for personal use, not for resale, and not at aftermarket prices.
For now, it’s .com for me.
I get that the market is still very much in flux and that prices may come down, given that the roll out has been somewhat disappointing, despite all the hype in mainstream media.
I don’t wish anyone ill will, and if I’m wrong, then fine.
Good luck.
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Insurance says
IMO-Although opinions vary on value (specifically with domains), and near everyone seemingly forgets as a main factoring equation in value of worth is the one big variable that many domainers don’t see. That is simple supply and demand.
Here is a perfect article as an example.
There apparently is nearly 1000 extensions and only so many one word (english) or 3 letter, 2 letter or one letter that can be made (some premium others not).
Where there was once a baron wasteland of dot coms it grew out and then came the other extensions we know and love. One reason is demand was getting higher and supply was lower, ergo higher prices reflective. Brilliant idea was born and more extensions were created. Many domains (unless dot com) will inevitably be dwindling in value with such supply.
Remember this…there are only 28million businesses in the US (aprox) so how valuable is your domain your bankrolling for the next umpteen years going to be worth? If you are realistic and selling to a mom and pop and its value is $1000-$3000 maybe its not worth it keeping and pouring money into your extension if 1000 more are coming out. Some yes, most no.
What Im saying, with all the domains coming out with all the extensions is while they all wont obviously make it, why is a particular domain worth keeping when variations and permutations of its very keyword EMD can be made with any other extension? Supply and demand dictates value. If too many extensions exists with one worders or even one or two letters… what the hell is your domain really worth, or going to be worth based simply on low demand in whatever extension and a really high supply?
Be sensible about your investments. Know when to hold, fold and dot walk away.
Howie Crosby says
I think Acro has a point with x.bike, but no other letter in the alphabet will cut it it! To be honest, a short keyword premium on a professional / business gTLD, that google will relate to is just as much likely to have more resale value.
I really don’t think we are going to have to wait wait ten years to sell these names for profit, times have moved on, progression in technology has mushroomed and the user is more informed.
Give it 2-3 years max.
Frank Schilling says
A lot depends on the string. The person who pointed out x.games and e.shopping are better than L.plumbing or r.holdings is right. There won’t be any 2 character names right away because of ICANN Country Code restrictions. When you back out super premiums that some registries withhold there may not be as mush new inventory available as folks think. Remember, bringing more diamonds out of the ground does not make the price of diamonds go down. By this time next year there will be a market for lots of these at some clearing price. Would you buy domain.info from me for $10,000?.. how about 5k, 1k, $500 .. it will clear the market at some price. I mentioned at the outset: get the good ones at registration price and avoid variable price registries or registries with annual increases baked in. Follow that guidance and you should have a better outcome speculating in these.
Jim Holleran says
I own P.tv, $25 yearly renewal, which is 1000x better than all those other new 1 letter .whatevers which IMO are a waste of money
Tony says
Great domains, Jim. How much did you pay for P.TV if I may ask?
My shortest domain is VN.TV and the main reason I got it is because VN is the CC for Vietnam.
Tommy says
Ok, so e.bike, i.bike, o.bike c.bike all can be used over thousands of applications.
The holdings and ventures single letters go great for the thousands if businesses that label themselves with those characters.
Boo hoo for the reg fee losers who can’t afford $70 to $99 per year for the domains.
Good way to get some bottom feeders out of the business.
Co fears to all that were able to get some good extensions in single letters.
I think on other good extensions they will hold them back, considering how quick they were grabbed up on the better extensions.
Google q.ventures see what comes back.
Howie Crosby says
Google q.ventures see what comes back.
Would be more professional if they directed the domain.
Scott Alliy says
No matter how you slice it this weekends one character domain giveaway debacle does not pass the sniff test. If the argument is that GTLDs are important because all the .coms are taken then at $230 or even $400 for one character dots how long will it be before that same logic used to promote GTLDs becomes invalid? And again if you devalue the merchandise what is the reason for investing. As far as low cost being attractive to buyers …
What I think you will find at the lower rate is that yeah some people might buy a dot but will likely not try too hard to develop since after all not much invested and at the end of one year … names will drop like a Rocky Mountain snowfall.
jason says
I wouldn’t buy one if you paid me
Jim Holleran says
@Tony, it’s a NDA, but it was in the “5 figures”. I could sell quick for $100K for a good ROI, but won’t take anything under 250K for it. VN.tv strong name, IMO could sell for 30K+. I sold Fi.tv for $32K, country code for finland
Jethro says
“I wouldn’t buy one if you paid me”
@Jason,
I agree with you. I’d be willing to pay the initial $400, but the annual renewal is for suckers. After 10 years, the guys will be stuck with a worthless .crap and $4,000 less in their account.
Reminds me of Schwartz buying his flowers.mobi Yeah, he was cool — for a day — but then reality sets in. Same thing here. Bet they are all suffering from buyer’s remorse right about now.
james says
What ever happened to A.pl did Apple take it from the fruit stand guy?
Snoopy says
A new tld name with an annual fee of $400 is almost always going to be worth zero. People might be willing to buy these now but I think the majority will get dropped within 5 years.
.TV investors learnt a long, slow, painful lesson about names like this. Hundreds of names like that were registered and gradually over time the situation gets worse for those names. $400 for a couple of years sound ok but how is it going to be in 2019 when the name still hasn’t sold, you’ve already spent $2000 and then you’ve got the prospect of more $400 annual fees on the name that you are not sure if/when it will sell?
Added to this when people decide “enough is enough, I’m selling” they’ll be met with no buyers, people won’t take this stuff even for free once reality has hit home about the cost of holding them.
Something like a 1 letter new ltd with $400 reg fee is an asset for the registry, the domainer has just taken on the reverse of that, a liability. The worst thing about names like this is some people will keep renewing for 5 years or more to try and recoup the money spent, those type of registrant just make their situation worse and it typically ends with simply not having any money to renew a couple of years later.
babasaqib says
hi! very nice article.
ChubbyDfat says
Watching some of these nTLDs come out and the reserves that they place on some of the names, I cant help but laugh to myself.
Using single letter domains, many that I am seeing have (like the article states), purchase and renewal prices of $400+ per year. Given the standard 5 years of ownership, you are looking at a $2,000 investment just for a domain name.
I have seen other single letter domains on sale for as much as $59k (with the same renewal… something is wrong with that line of thinking).
If you can find the single letter domain (with an extension that is not overly long) and has a normal renewal cost, that indeed would be Ultra Rare (given today’s market) which in turn should lend to a higher sales price.
peter says
.com is king of TLDs……..club is gaining fame like ufc.club or ultimatefighter.club
DieselGuyX says
I recently bought n.life and was wondering if you had any ideas what it could fetch? I can imagine a million different ways the name can be used (i.e. dating sites, job hunting sites, etc)
“new life, now life, nice life… etc”
thoughts?
p.s. – obviously i’m super green in this space and decided to take a gamble.
Thing-r says
Psst: it’s worthless.
DieselGuyX says
Really? that’s too bad then I guess…….. expensive gamble, paid $1200 for that domain (cad)
Thing-r says
What’s the renewal?
DieselGuyX says
$1200/yr at GoDaddy
Thing-r says
That’s insane. Since when did registrars become domainers? What a bunch of crooks. Yah, so at that renewal rate, it pretty much renders that domain worthless.
Hayden says
I picked up 4.team – a perfect domain for a project management platform or CRM app.