Analyzing NameJet and Short Domain Name Sales

Joseph Peterson reviews recent NameJet sales, and takes a deep dive into sales of 3 and 4-character domain names.

After a record-setting Winter, NameJet began Spring with a reduced sales volume for March. Even so, given 94 sales closing at or above $2000, March matches the best month out of an 11-month stretch during 2014. NameJet also scored its 4th highest sale of all time with VVV.com being bid up to $136,400.

The real story here is the massive preponderance of 3 and 4-character domains. Out of $641.6k in sales, $306.1k (47.7%) derive from CCC domains with another $115.1k (17.9%) from CCCC domains. That leaves only 34.4% – basically 1/3 of high-end spending at NameJet – to be split amongst ALL other domain categories. Looked at another way, there were 14 CCC and 21 CCCC sales, which together account for 35 out of 94 domains in our chart: 37.2%. In other words, 1/3 of Namejet’s best-selling domains were 3-4 characters long and accounted for 2/3 of high-end spending. Out of the top 21 sales during March, the only slots not occupied by these 3-4 character strings were #13, #15, #18, and #19. Keep in mind, we’re counting only domains that cleared $2k individually. Below that high-visibility threshold, the domain profile will be different.

All of this boils down to a single word: China. Not all buyers were Chinese, but even those that weren’t will mainly sell their short domains (directly or indirectly) into Chinese hands. And the prices they pay sometimes indicate a borrowed mindset – one that buys into market values ultimately set by China. Such domain traders are merchants on a digital silk road connecting East and West. And as long as the Chinese appetite for numeric / literal strings remains strong … or is perceived to be strong enough to keep these assets liquid outside China, just so long will domainers from Denver to New Delhi be found bidding $14k – $20k for the likes of SZP.com, 1303.com and NQJ.com – arbitrary and alien as such commodities seem to us. Even though I don’t think a downward correction in short domain prices is imminent by any means, it does bear thinking what NameJet (and domainers generally) would do if China decided tomorrow that LLLs and NNNNs were passé.

Domain Name	End $	Domain Name	End $
VVV.com	136,400	NLF.com	33,700
QMS.com	22,342	SZP.com	18,109
PZM.com	17,008	JZC.com	16,910
NQJ.com	15,619	VOJ.com	11,312
LFV.com	11,100	GVY.com	9200

VVV.com is notable because it follows the December sale of its cousin, VVVV.com. I’m sure the seller wished to capitalize on the success and publicity surrounding that earlier NameJet auction. Clearly the strategy paid off. As for the others, well, they’re somewhat (though not exactly) interchangeable. The category is fairly boring – like buying lumps of metal by the ounce, based on measurable purity. Frankly, it’s because one LLL.com is so like another that the asset class is as liquid as it is. Buyers from all linguistic backgrounds and experience levels feel somewhat confident in their valuation because there’s little to evaluate in any individual specimen, while (at the same time) there is an enormous pool of equivalent assets to compare.

Sales pitches for LLL.com domains make much of their scarcity (only 26^3 = 17,576 in existence … and many of those off the market), but ironically the high prices of LLL.com domains are really based not on their scarcity but on their abundance! Domains grounded in words rather than letters are each so semantically unique that global buyers have trouble assessing and comparing them. It’s simply impossible for the market to generate as much consensus about the value of Ankles.com ($6.1k) as observers can instantly assign to something as meaningless to them as PZM.com. For PZM.com has thousands of nearly identical peers, whereas Ankles.com may have (at best) a handful; and even there comparisons are subjective.

The LLL.com boom isn’t entirely due to China. I’d say that it’s an American bubble that would burst except for China’s growth. Uncertainty about how to appraise linguistically meaningful domains – not to mention the difficulty in marketing them for sale to buyers who are equally unsure of their worth – depresses the value of items such as Ankles.com relative to fast-trading, stable commodities like PZM.com. Market consensus reduces risk; so in times of insecurity (think nTLDs) or poor wholesale liquidity, money flies to the most secure asset class, driving prices upward as a symptom of low-level mass anxiety.  And in the case of the domain industry, we’re seeing that happen now.

LLL.com traders are packed tight as sardines; and they pass their assets around so frequently that the niche conducts “current” very well. Indeed, LLL.com domains behave more like stock market shares, barely resembling the rest of the domain market, where branding and business models, search stats and online competition must all be taken into account for each and every domain as an individual. Not so with LLL.com’s. Most domain investors by now regard them mainly as abstract place holders for money. Margins can be quite tight – narrower than in most domain asset classes. At every trade, brokers and market places exact a commission; so understandably LLL.com’s are also highly promoted because they sell fast and sell high. Frequency of trades means that values are nearly unanimous, plus or minus. I’ve long thought that it’s something of a self-fulfilling prophecy. Notice, LLL.com price ranges are so well established that none sold below $9.2k. As long as everybody agrees that the floor price of LLL.com domains is X, then everybody pays X. But why X? Because it was X yesterday – not for any intrinsic reason. Profit depends on a change of venue – a visibility advantage this seller has over the last seller.  Or else profit depends on waiting for the floor price to rise … perhaps driving it to rise by publicizing sales.

Domain Name	End $	Domain Name	End $
1303.com	14545	8316.com	13345
7610.com	12601	3202.com	11000
6105.com	9000	6474.com	7701

Numerics, even more so than literal strings, are a domain category dominated by China. After all, NLF.com ($33.7k) has some value as an acronym anywhere the Roman alphabet is used. So where quality acronyms are at issue, there’s often a tug-of-war between China and institutions in the western hemisphere. But using numbers to abbreviate words and phrases may be a practice unique to China. As you can see, the price range on these half dozen 4-digit .COMs is rather narrow: $7.7k – $14.5k with nothing below $7.7k to report. For another domain asset class – say, dictionary words – prices will always run the full spectrum down to zero.

Domain Name	End $	Domain Name	End $
000001.com	3500	860888.com	3101
15200.com	2111

Plenty of domain investors have heard by now that the digit “8” is thought to be lucky. Repetition also increases value for Chinese buyers. Normally, of course, we wouldn’t see 6-digit domains outperform 5-digit domains. 000001.com is not a first, but it is an oddity.

Domain Name	End $	Domain Name	End $
M86.com	3400	IZ8.com	2901
WT8.com	2622

Even though China prizes short strings enough that bidding activity on mixed alphanumerics is largely attributable to the Chinese market (at some stage in the supply chain), still … not every domain China likes China gets. M86.com might be a cyber-security company, as I reported earlier.

Domain Name	End $	Domain Name	End $
HOBB.com	7777	KYTE.com	5303
RRYY.com	4200	SUZA.com	2985
VVTT.com	2902	GSVC.com	2701
AUTU.com	2600	LLOO.com	2545
BAPY.com	2500	YENS.com	2450
TCAS.com	2410	EATE.com	2222
WDXX.com	2149	BONZ.com	2109
HALY.com	2109

Mainly what we see with top-selling LLLL.com domains is some combination of these factors: (1) word resemblance, (2) pronounceability, (3) repeating letters, (4) a CVCV pattern favored by many domain investors, and (5) applicability as an acronym. You can judge for yourself which factors apply to which domains above. Interestingly, pronounceability and usefulness as an acronym are often vitiated by repeating letters. Pattern is most important among Chinese buyers, for whom our criteria don’t matter much. Some of these domains I’ve covered in more detail within my weekly articles on the expired market: HOBB.com, KYTE.com, and BONZ.com.

Domain Name	End $	Domain Name	End $
BaoCan.com	5137	TaoKuang.com	4559
YaoBi.com	3209	LaoHu.net	5020

China also pays good money for phonetically spelled Pinyin. Usually that means .COM. Yet here we have NameJet’s only .NET to clear $2k during March. Another Chinese-style .NET sold during the same week; but technically that spilled over into April.

Domain Name	End $	Domain Name	End $
Alibab.com	5200	Propero.com	4200

We’re not done talking about China yet. I’ve paired these domains because they both seem to apply to preexisting brands. If you don’t recognize the company Alibaba.com in that typo, then you can read a bit more about it here, along with Propero.com.

Domain Name	End $	Domain Name	End $
Shawls.com	6900	Ankles.com	6099
Negatives.com	3000	Punches.com	2800
Fondly.com	2500

At long last, I can finally discuss domains built from intelligible words rather than character sequences! Here we have 5 single words from the English dictionary, which are for me at this point like water from an oasis. Strangely, the top 4 out of 5 are all plural nouns. Shawls.com ($6.9k) can be shopped & shipped; Ankles.com ($6.1k) can be sprained & treated; Negatives.com ($3k) can be developed as photographs; Punches.com ($2.8k) can be rolled with or brand anything that “floats like a butterfly, stings like a bee”. Fondly.com ($2.5k) should do well, since startups are exorbitantly fond of this adverbial “-ly” suffix. Personally, I hate the fad. But this name is short, positive, and genuine (as opposed to manufactured). Plus, the internet these days is all about liking things – i.e. expressing fondness. So I’m as fond of Fondly.com as the buyer must be.

Domain Name	End $	Domain Name	End $
PrepSchools.com	8888	BearClaw.com	8600
BabyPhoto.com	4944	JetRental.com	4700
SleepStudy.com	4300	MailMarketing.com	4210
ElectricHeaters.com	3800	InternetRadios.com	2602
NestingDolls.com	2009	RingBands.com	2000

It’s easy enough to conjoin pairs of words. But these 2-word domains each define 1 real thing, and the phrases are really used to describe that thing. Neither word is extraneous – meaning that if you erase “prep” from PrepSchools.com ($8.9k) or “ring” from RingBands.com ($2k) you actually change the topic entirely. Under those conditions, 2-word domains can do quite well on the market. I’ve written about some of these auctions already, including 2 with real profit potential. Where MailMarketing.com is concerned, Andrew Allemann has written a couple of interesting pieces lately reflecting on TLD usage within coupon mailers he has received.

Domain Name	End $	Domain Name	End $
MyBooks.com	11100	LuckyGames.com	9501
TransNet.com	7499	FancyCars.com	3500
WebSurveys.com	2400	InfoShield.com	2269
AllergyAware.com	2100

Unlike the last group of 2-word domains, these phrases are more optional than actual. That doesn’t mean that such names don’t have value – only that creativity and subjective taste play a large role that can be hard to measure. Knowing the scale of the underlying industry really helps predict what kind of prices companies can pay for a keyword-based but “brandable” domain. Notice that these auction results all apply to big industries: books, gambling, transport, translation, automobiles, surveys, cyber-security / privacy, pharmaceuticals. What I’m getting at here (for the benefit of any new domainers who may be paying attention) is that, while brainstorming creative names about nesting dolls may be fun, such a tiny industry won’t pay much for domains in this style so long as it can afford to buy NestingDolls.com itself for $2k. So it’s best to pursue domain investment in the more creative names only for the bigger industries.

Domain Name	End $	Domain Name	End $
0Down.com	4503	SwapStuff.com	3388
SecretLover.com	2600	LocalShops.com	2588
SoftwareDeals.com	2200	PhoneSavings.com	2100
WeRoll.com	2000

These 2-word phrases may not define actual things, but they are commonly said or else seem perfectly natural. Moreover, the first 6 clearly apply to lucrative niches: loans, bartering, adult dating, local directories / shopping, software, and phone plans. That means that people looking to brand a business or website within these niches will frequently come up with these very same domains as name candidates. Greater market demand means greater prices … plus greater likelihood of a sale at any given price. I particularly like WeRoll.com ($2k) and SwapStuff.com ($3.4k), both of which I reviewed in earlier articles.

Domain Name	End $	Domain Name	End $
Epitech.com	2988	Finsol.com	2311

Frequently, when domainers discuss “brandable” domains, they may be referring to neologisms such as these – invented pseudo-words that may or may not contain parts of real terms but which inevitably hint at vocabulary and language origin. Epitech.com matches the brand name of a few developed sites, and perhaps Finsol.com does too (I haven’t checked). In that case, I might as easily have grouped these with Propero.com and Alibab.com above, since the opportunity to protect a brand or flip to an established company largely explains the auction prices in such circumstances. Wholesale prices tend to be far lower otherwise, which is why we see few neologisms at NameJet above $2k … unless they match one or more predetermined buyers.

Domain Name	End $	Domain Name	End $
SealBeach RealEstate.com	3866	ChicagoDivorce.com	2755
PembrokePines RealEstate.com	2621	WeBuy HousesCash.com	2600
DiscoverTexas.com	2422

Domains about real estate frequently do well – even though a geographical component invariably makes them longer than other domains in the same price bracket. And the reason is simple: the products they sell (houses and other property) are among the most expensive. Adding a geographical term also makes sense for locally circumscribed professionals such as lawyers (ChicagoDivorce.com). The same obviously applies to tourist destinations (DiscoverTexas.com).

Domain Name	End $	Domain Name	End $
USD.org	5450	OnlineBackup.org	3188
Voices.org	2801	TurboTap.org	2322
DebitCard.org	2225	Helix.org	2099

Out of 94 domains that sold over $2k during March at NameJet, 87 were .COM, 1 was a .NET in Chinese pinyin, and the remaining half dozen were .ORG. Helix.org ($2.1k) relates to DNA. The other 2 single-word domains are self-explanatory. Among the trio of 2-worders, TurboTap.org is the odd man out. Unlike DebitCard.org and OnlineBackup.org, it doesn’t define any commercial category. Instead, it looks to be an expensive bit of brand protection. At first, I suspected TurboTax; but “X” and “P” are too far away on the keyboard. Still haven’t fully researched that one, though; so I could be entirely wrong. Although the .ORG that fetched the highest price was an LLL, in keeping with the majority NameJet’s highest .COM sales during this same month, the rationale is clearly different. We haven’t seen China throwing money at .ORG strings, and “USD” is far from an arbitrary sequence.

Domain Name	End $	Domain Name	End $
Banerjee.com	6901	Beston.com	2421
BWIN9.com	2324

These are surnames. So is HALY.com from the table of LLLL.com domains above. BWIN9.com seems to exclusively match one man’s user name at various sites. Yet he wasn’t the buyer; someone in China was. Perhaps the word “win” indicates gambling. Still something of an enigma, this one; but I had to stash it somewhere.

Domain Name	End $	Domain Name	End $
Makanan.com	3363	Servizi.com	3020
Lirio.com	2615	Eletro.com	2151
Inizio.com	2101	Draken.com	2099

Not everything in the world (or at NameJet) divides between English and Chinese. Plenty of domains in other languages sell each week, although the wholesale prices at NameJet tend to fall below this $2k monthly reporting threshold. Makanan.com is Indonesian for “food”. Servizi.com is Italian for “services”. Lirio.com ($2.6k) is Spanish for “lily” or “iris”. Eletro.com is Portuguese for “electric” or “electronic(s)”. Inizio.com is Italian for “beginning” or “I start”, as well as being used as a brand name by several American initiatives. Draken.com (I’m told) means “dragons” in Dutch; and it’s “dragon” in Swedish too, which explains why the Swedes manufactured actual flying Draken.