Tag: GGRG Brokerage Consulting

As Europe’s General Data Protection Regulation (GDPR) takes effect, Escrow.com has reported the lowest volume of quarterly domain name sales in the few years GGRG has been publishing their Liquid Domains Market Overview.

The inception of the GDPR last May brought significant changes to the domain name registration data collected, or Whois. For the first time, GGRG recorded a drop in Chinese ownership, coupled with a sharp decrease in the number of domains associated with European registrants (down to 4.6% from 7.4%). This could be easily explained by the new privacy rules affecting European owners.

But it wasn’t all doom and gloom. There were gainers with the “rest of the world” (up 4% from 7.7% to 11.7%), the N/A category and, in a small measure, the US, which gained 1%. China remains the largest owner of liquid domains with 165,000 domains associated with Chinese registrants.

In the second quarter, Escrow.com recorded $12M in transactions, with the strongest categories being the 3 letter (L) category which accounted for $4.8 million in sales and 4Ls ($4.3M). These values are in line with last quarter and signal a notable growth in the 3Ls category. The largest drop came from the 2Ls .com which did not register any Escrow.com, nor any other public transactions in the second quarter.

The GGRG report also noted that ShortNames, which aggregates and tracks short domain name auctions and sales across a multitude of domain marketplaces, recorded $5.4M in transactions, with the most traded categories being 3Ls, 4Ls, and 5 number (N), respectively at $1.4M, $1.6M and $1.3M. The 5th percentage values gave us mixed signals: on one hand 5Ns and 3Ls showed record increases (+56% and +31%), while on the other, 4Ls – the category which accounts for 75% of all liquid domains – dropped 13%. The median values of disclosed transactions also recorded very large decreases in almost all categories. This calls for caution in view of the early Q3 results which are indicating sharp valuation drops for Chinese premium 4Ls.

A significant decrease in the wholesale value of Chinese Premium domains might signal that the tide is shifting away from China and back to the West. Chinese owners might start to finally sell inventory. Once again, we expect Western investors and end users to focus on the most premium liquid domains when looking at buying opportunities: specifically, acronyms with Western Premium letters and Keyword domains. We retain our recommendation for investors to focus on quality over quantity.

Giuseppe Graziano is the CEO and founder of GGRG.com. With a focus on the 586,848 short .com domain names defined as “liquid”, Giuseppe has helped his clients sell over $10 million dollars worth of domain names, receiving award nominations for “Blogger of the Year“ and “Industry Goodwill Ambassador” in 2015 and “Broker of the Year” in 2016. Escrow.com awarded Giuseppe “Master of Domains”, as one of the top 3 highest grossing domain brokers in the world in 2016. Giuseppe has lived in 5 countries across 3 continents, speaks 5 languages and holds a Master Degree in International Management from the Fudan University in Shanghai, China. With all that, it was surprising that Giuseppe had the time to sit down and talk to Internet.bs to give his thoughts on the domain name aftermarket, with a few tips for investors.

Who are you and where you are?

I am Giuseppe Graziano, the CEO of GGRG.com, a domain brokerage and consulting firm focused on the so called “liquid domains”. Right now I’m in Italy seeing my family but usually I live in (and love) Lisbon.

How did you get started in domain investing, and when? And how long did it take for you to start getting a return on your investments?

2012. I was looking for a domain name to start a blog about productivity, and discovered there was this universe of people buying and selling domains. I like words and languages and fell in love at first sight. I remember spending day and night searching for available domains and ways to appraise them.

I started working in the industry almost right away, but it took me probably 2 years to realise the first profit from selling a domain I owned. Before that I registered (and held on to) a lot of worthless domains.

How many domains do you own?

I do have a small portfolio of about 300 domains, almost exclusively domains I would like to develop. I do not actively invest in liquid domains as I think there would be a strong conflict of interest with my clients.

I know you focus on .coms, but are there specific .com domain names your clients look to invest in?

Liquid domains, that is all the 586,848 combinations of numbers and letters up to 5 numbers .com and up to 4 letters .com. These includes domains like 67.com, hjj.com, 98779.com, etc. They are called liquid because all these combinations have been registered long ago and they can be sold for at least specific amounts that we call “floor prices”. For example, if you own a 4 letter .com, as of today, you can sell it quite rapidly on the market for at least $150. If you are an active investor in liquid domains, or are simply curious, you should definitely check the Liquid Domain Market Overview, which is a quarterly report we publish in collaboration with Intelium (the creators of Estibot), ShortNames.com, DomainSherpa.com and Escrow.com. We analyse indicators like the development index (how many domains have been developed) for each category, if the floor price has gone up or down in the past quarter and a lot of other cool stuff. You can download the report for free by subscribing to our newsletter at this link here.

What was your best investment, or do you think you still have it and it’s yet to be realised?

I have it! I bought last year my dream domain and will develop it one day. But for now I can’t say which domain it is. Sorry. But I promise one day you will know!

What are some hard lessons they had to learn?

Despite what many people say, end users sales are very hard to come along. When people see 7 digits sales on DNJournal they do not realise that 90% of them are the result of a motivated buyer deciding first they want the domain and then going after it. Outbound sales are rare and typically of lower values.

What is the longest amount of time you have held a domain name without developing it before it sold?

Good question since I have not really sold many of my own domains. On the other hand, I have brokered domains for clients for more than one year before finally finding a buyer. On several occasions, actually.

How do you explain what they do to friends and family?

I have had good success saying “I’m a consultant”. At least I think that’s what I said when I met my girlfriend and it worked! I don’t know if we would have started dating if I said “I’m a domain name broker”. Now she knows and actually surprises me how much she understands about the industry.

What is your favourite online source for industry news/investments?

DomainSherpa.com is a fantastic place to start if you want to learn the ins and outs of domain name investing. This being said, I also love Ron Jackson and the DNJournal. He is such a legend.

What advice would you give to people looking to start out domain investing? How much money do you think they should start with, the types of domain names they should look for?

Thierry Francois, a well-known Canadian domainer that I met at my first domain conference, gave me this great advice which I will pass on to newbies like I was: “When starting out, rather than registering a bunch of domains, do your market research and buy only one good domain under market value.”

This seems like a simplistic advice, but it is actually great in all its nuances. If you think about it, if your goal is to buy just one domain, it sets you on a path of right actions: you have to decide in which category you want to invest, you have to do market research on which is the best venue to buy and at what price you have to buy if you want to make a profit. It gives you budget constraints (therefore avoiding that you make an emotional decision), it makes you familiar with the process of buying and using an escrow service – overall it is an accelerated course in domain investing that costs you only the price of the domain you bought. If you go through all the steps, you will get a much better understanding of the industry and you will be on the path to become a successful investor.

You don’t invest in new gTLDs, but do you think they’re worth looking at? And what about ccTLDs and other gTLDs?

If you are an investor, I think you want to stay focused on .com because that’s where the largest number of buyers are. End users will always pay more for a .com. They would rarely pay a decent sum of money for an alternative TLD – especially when there are so many options available. Of course .com is a crowded, competitive space, so you could also try to master another niche such as ccTLDs or new gTLDs. If you do that, I would stay focused on the best of the best and again avoid registering a bunch of worthless domains.

Have you seen people fail, and if so, what do you think the reasons were for their failure?

I think everyone fails at one point – domain investing is a learning process. That being said I think the biggest mistake why people fail (for the third time, hope it sticks with you) is because they register a bunch of domains with the hope that someone will come along and buy them. A very smart (and wildly successful) investor once said to me: “Domains are not assets. They are $10/year liabilities”. I would treat domain names as any other investment. If you bought $10 worth of a stock that would take $10 a year out of your pocket in exchange of a small chance of a $x,xxx pay out, would you consider it a sound investment? That is to me equal to playing the lottery, plus more time consuming and less fun. I can say this for experience because I lost myself a bunch of money when starting out by registering bad domains.

Giuseppe Graziano is the CEO and founder of GGRG.com, you can find out more about his business by visiting his website at http://ggrg.com/

This article originally appeared at:
https://internetbs.net/blog/2017/12/12/interview-with-giuseppe-graziano/

Chinese registrants, including domain investors, own close to a third (29.48%) of all liquid domain names, that is, those that are actively traded on the major marketplaces, and dominating the numeric categories of 2N (numeric), 4N and 5N. The US is a distant second at 16.72%, while still remaining the largest owner of 2Ls (letters – 37.57%) and 3Ls (36.87%). These are some of the key findings in the latest Liquid Domains Market Overview (LXDO) for the third quarter of 2017 from GGRG Brokerage Consulting.

The report also found there was a low turnover rate (0.56%) for the quarter, appearing in stark contrast with the largest escrow.com sales volume reported to date. While BitCoin and other cryptocurrencies keep posting above average returns, the 5th percentile values of the most traded liquid domain names continue their descent, with one major exception. The Q3 edition of the LXDO features for the first time the percentage of domains under privacy and Chinese translation. In this edition, to ensure the accuracy of the data, domain names under privacy will be considered as their own category, since it’s not possible to not effectively tell if a domain under privacy is owned by a registrant from the same country of the privacy service.

According to the new distribution, as noted China is still the largest owner of liquid domains at 29.48%, dominating the numeric categories of 2N, 4N and 5N. The US is a distant second at 16.72%, while still remaining the largest owner of 2Ls (37.57%) and 3Ls (36.87%). Total privacy percentage is at 21.32%. It is interesting to note that the most valuable categories with low development index have the highest number of domains under privacy.

There seems to be a positive correlation between: 1) the average domain value per category; 2) the percentage of Chinese ownership; and 3) the number of domains under privacy in that category. In other words, the more valuable the domain, the more likely it is that it is going to be under privacy: 48% of 2Ns are under privacy, compared to 28% for 5Ns and only 20% for 4Ls.

As anticipated by GGRG, Q3 presented the lowest turnover rate in disclosed sales ever seen at 0.56%. This might be due to a few factors the report notes, including the seasonality (summer months are typically slower) and reduced investor activity. The aggregate value of disclosed transactions went down 58% from $12.9M to $5.4M. The disclosed sales volume is in contrast with the sales reported by escrow.com, which increased significantly for 3Ls, 4Ls and 5Ns, as a consequence of large end user sales or unreported portfolio transactions in these categories. According to escrow.com, the most traded category this quarter were the 3Cs category, with $8.6M, and $24.4M in sales in the aggregate.

The 5th percentile values continued to go down across the board, with 3Ls losing 12.94%; 5Ns losing 12.28%; and 4Ls stable, declining a modest 1.67%. The notable exception were again the 3Cs, which presented a 25.91% increase. This reflects GGRG’s Q2 forecast and could be due to the increased sales volume and to the attention brought to the category by the recent inclusion of the 3C category in the last LXDO report (there was a similar value boost on the 2Cs after the first LXDO edition was published).

Looking ahead, the report predicts the large volumes of undisclosed transactions, combined with fewer buyers active in the investor market, might bring back price polarisation in the liquid domain categories. Price polarisation is more common in markets with low turnover, where comparable sales are less effective in predicting sales prices and establishing value benchmarks. This in turn might cause decreased asset liquidity. This combination of lower liquidity, with the overwhelmingly positive returns for bitcoins and other cryptocurrencies, might cause investors to shift their focus away from the domain market when looking at alternative ways to store wealth. At the same time, the exceptionally high escrow.com sales volume means that there are still great arbitrage opportunities for the investor who carefully selects the quality of domains as opposed to focusing on quantity.

The report is available to download in full from the GGRG Brokerage and Consulting website at:
ggrg.com/industry-report

The value of domain name sales continues to grow, particularly in short domains, according to the latest, and fifth edition, Liquid Domains Market Overview, which covers the second quarter of 2017. For this report, 3-character (C) domains were added, but without the 3C transactions, the aggregate value of disclosed transactions grew 50%, from $8 million to over $12m.

The majority of this can be attributed to a notable $3m increase in 3 letter (L) sales, which featured this quarter a significant number of disclosed end user sales: xyb.com, pep.com, dcc.com, lev.com (all in the 6 digits) and most notably fly.com, sold for $2.89m. Escrow.com confirms this trend by reporting $4.7M in 3L transactions last quarter.

With the addition of 3C .com domain names, another 28,080 domains were added, roughly the same number of domains as 3L and 4 number (N) combined (27,576). 3Cs have been completely registered years ago and have traded consistently ever since, mostly on auction platforms. This category includes domains like sf8.com (LLN), 88g.com (NNL), and also alternating number/letter combinations like g7h.com or 9h5.com.

The newly added 3C category has a 13.81% development, the proportion that has been developed into a website, the second lowest in the liquid markets, but not too different than the more expensive 3N and 4N categories which present development indexes in the 15% range. LL domains remain once again the most developed category at 36.39%, followed by CC at 28.65% and 3L at 27.43%. Across the board, the second quarter saw a stabilisation of the development index, after the sharp 1% increase in Q1.

In terms of geographical distribution, the US continues to lead the way in the most developed categories (LL and 3L) with over 50% ownership. But China continues to dominate the less developed numeric categories, supporting the hypothesis that end users are often US based, while most Chinese owners are investors. According to our previous report, China owns about 37% of the liquid domains, followed by US (32%), rest of the world (22%) and Europe (9%). For this edition, a complete geo-distribution for the 4L, 5N and 3Cx was not possible because a large set of the data was not available in those categories.

According to Escrow.com, 3C domains rank surprisingly as the most traded category for the quarter with $5.8M USD in gross volume, which could be the result of large end user sales or portfolio transactions. For the same period, ShortNames.com reported over $700,000 in disclosed 3C sales, featuring the highest turnover per category ever reported at 2.70% (758 sales). The overall liquid market turnover is slightly up at about 0.9% (5,512 transactions) for the quarter.

Escrow.com also showed a decrease in transaction volume in the categories most affected by volatile end user demand (LL, CC), however, CC sales remain at a healthy $140k+ average per transaction as reported by shortnames.com. In terms of floor values, we saw a double digit decrease in the 5th percentile of 4Ls (-13.88%) and 5Ns (-11.64%), the least scarce and developed categories. 3Ls went slightly up with a +9% increase in the 5th percentile.

Looking ahead, unique .com domain names command and will probably continue to command amounts that are much above market averages. Freedom.com sold for $2M and Elon Musk repurchased x.com from PayPal for an amount that we presume is well into the 7 digits (z.com sold for $6.8M).

The stabilisation in floor values means that under-priced domains are becoming increasingly harder to find, and that the most successful investors will be the ones able to pick the right domains with end user potential, rather than purchasing in bulk and waiting for capital appreciation.

Buying a domain with end user potential in highly developed categories near floor prices, seems like a strategy that could yield good returns and reasonably contained downside.

With a 5th percentile at $220, high turnover and inherent scarcity, 3C .com domains seem an interesting category to invest, especially for combinations with high end user potential.

The report can be downloaded from:

Liquid Domain Industry Report

Chinese domain name investors have a preference for short 2 to 5 number (N) .com domain names while American investors have a preference 2 and 3 letter (L) .com domains according to the latest Liquid Domains Market Overview from domain name broker GGRG for the first quarter of 2017, which analysed the 586,848 .com domains they consider liquid in the first quarter of 2017.

The analysis of the sales data for the first time includes the total sales volume recorded by Escrow.com which provides additional insight into the higher value categories like 2L, 3L and CC (character) .com domains. 2N and 3N data was withheld for confidentiality reasons.

The report found notable differences in what domain names were popular in what markets. For example the report found for LL.com domains 52.66% of all transactions were from US investors and registrants while 21.60% were from China. However for NN.com domains 53.00% were from China and 40.00% were from the US.

Likewise for 3L.com and 3N.com domains. More transactions were from the US (52.88%) than China (17.65%) for 3L.com domains and for 3N.com domains it was 45.90% and 47.80% respectively. For 4N.com domains there was an overwhelming preference from Chinese investors with 61.56% of sales going to the Chinese and 29.86% to Americans, while 5N.com was similar (58.58% to China and only 11.48% to the US). For 4L.com domains there was a slight preference to US buyers (36.04% to 32.58%).

The included Escrow.com data ($16M in reported transactions in Q1) should largely be viewed as a complement to the sales reported by ShortNames.com ($8M this quarter) and not as a wider substitute. This is because many disclosed transactions in the lower value categories (3L, 4L, 5N) take place through auction platforms or marketplaces that do not necessarily use Escrow.com.

While the market is still uncertain, in the forecast section of the report from GGRG it was noted there was not any significant market movement towards the level of transactions and prices of 2015.

The reported noted the trend inversion in the development index might suggest the price of liquid domains might be starting to become attractive again for end users. It is interesting to note they’re not seeing large losses on the floor prices. As they’ve predicted in prior reports, they’re seeing a decrease in values for the more expensive “Chinese Premium” domains, especially the 3L .com domains which lost almost 50% from their peak and are now trading at values closer to the “Western Premium” 3L domains.

To download the GGRG Liquid Domains report in full, see:
ggrg.com/industry-report/