Domain Renewal – To Renew Or Drop – That Is The Question

Readers of my blog often ask me if it’s worth it or important to renew their domain portfolio or simply drop their domains that are coming up for renewal. As you may be aware, domain names expire and most domainers register their names for only a year. The question really comes down to if your domains are worth the renewal or not. For instance, I often see a lot of junky names getting renewed & one sale replenishes all the junky domains in the bunch or others simply dropping domains after a year if they don’t sell.

All I can offer is my first hand experience in the subject. I think that the value in a domain is in the holder’s eye & sometimes less than better domains do sell for good money. The truth is that a year comes up rather quick & doesn’t always offer the best chance to wait for a buyer to approach you or for a sale to brew up from your efforts in contacting end users. It soon becomes a waiting game that boils down to the funds you have on renewal fees & the anticipation you have for a sale to mature into cash in your pocket.

Often times I do see people renewing really bad domains year after year & there are no sales coming their way. You need to keep a good balance on domains that you feel will sell & cut the bad domains loose that don’t hold value. I like to let a simple google search determine if a domain is worth holding on to or letting go. Some long tail domains may not really be all that great or deserve a sale. What you may think is a brandable domain with good resell value may not have have a brandable customer ready to pay what you want. Like most things in life, luck plays a factor in sales & the waiting game can pay off.

The issue lies with some portfolio sizes – if you have hundreds or thousands of domains, are they all worth renewing? Some people do renew all their domains & are successful. Others drop their names after x year(s) and are also successful. In this post, I can recommend that you trust your instinct. While it may not make sense to some – to renew hundreds of domains, it may to someone else. One thing I know for a fact is that with stats, the more domains you have, the more sales you will have.

Another factor to consider when asking yourself if I should renew or drop – is if the domains are parked, how much are they making? I have a rule of thumb that if a domain covers at least it’s regfee in parking, then it is worth keeping. If a domain didn’t cover regfee with parking, then I would think twice & usually drop the domain. This system seems to prove itself profitable because if you were able to age a domain & it sells, it’s even more profit in your pockets.

I have seen first hand people hang on to a domain for ten or so years & when selling it, it becomes a good selling point in the aspect that the yearly renewal fees can be used to spike up the domain price at time of sale. So it’s not necessarily a bad thing to hang on to your domains for a long time. It’s a numbers game at the end & your instinct / domain quality is what will make your profits or drain your money into nothing.

If you have domains coming up for renewal, regardless of how many, take the time to ask yourself these questions:

  • Does the domain make sense to you? Do you feel it will sell down the road if you renew it?
  • Does the domain make money in parking or via a venue that monetizes the domain? Examples – shopping cart or development?
  • How much is the renewal fee? Should you change registrars or scrub the web for a renewal fee coupon?
  • If you hold on to the domain & say 5 years pass by, can the sale total recoup these renewal fees?
  • What is the purpose of the domain? Can you see the domain fitting a purpose or easy to remember?
  • Is the domain brandable? Or can an end user put the domain to use for personal or business use? If so, you should hold on to it.
  • I do a google search to find if there are any longer variants of my domain. Are there longer domain names in use that contain my domain name inside? If so, I would hold on to the domain because someone may want an easier to remember domain & buy mine.

I have been in the position where I dropped a domain name, later to find it sold for a lot of money & that hurts. In the same token, I have also held on to domains I thought were valuable & simply sucked up a lot of money in renewal fees without making anything parked or finding a buyer.

The best advice I can give you is to trust your gut instinct & roll with the punches. I like stats & mentioned above that the more domains you have, the more sales you will get. However, the quality of each domain will really matter. If the domains you renew are of decent quality, then expect the sales amount of each to be higher than that of lower quality domains selling for a very low amount – where your renewal fees cannot be recovered.

If you have domains coming up for renewal, you can always try to sell them at wholesale prices via various venues. I usually find that selling soon to expire domains on domain forums like namepros, digital point, flippa or sitepoint will usually work with you on buying your expiring domains & take on the renewal fees. This leaves you with the sale amount without worrying about the renewal fees the domain would have cost.

 

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2 Comments »

 
  • Adrian Keys says:

    A lot of soul searching in the domain industry so a timely and good post indeed.

  • admin says:

    Adrian,

    I agree, hopefully domainers know to not lose interest in such a profitable time in the industry. Domain renewals are costly, but can be profitable investments if you stay focused on the sales front.

    Dan

 

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