While common perception is that the domain gold rush is long over there are still many niches in which a savvy domain investor can make good money.
We all know about the NN, NNN, NNNN, LL, LLL .com markets and the value that those names hold (if you would like more information about numeric names, please click here NUMERIC DOMAINS 2.0 – THE DEFINITIVE GUIDE).
Today we are going to discuss a market that is emerging and why now is the time to get involved or risk losing out.
In the last two months we have seen the bottom price for LLLL.com’s skyrocket. The least valuable LLLL’s, meaning not pronounceable, with no pattern and containing non-premium letters (AEIOUV), are going for at least $150 across all aftermarket platforms such as Namejet, Sedo, Flippa, 4.cn, Afternic, Namepros and Godaddy, whereas 5 months ago you could easily purchase this type of name for between $10-$20. In the last week, according to Namebio.com the cheapest name in this category was IXYV.com which sold for $150 USD. The most expensive was JMEC.com sold at $530. The average sale price for these names came in at $274.
When you slightly change the formula and look at domain names with only Chinese premium letters (all letters except AEIOUV) but with no pattern and are not pronounceable you see a jump in price. According to Namebio.com the cheapest name in this category was PCYG.com, which sold for $500. The most expensive was TBQD.com, which sold for $2,653. The average sale price for this category came in at $1,358. Again, 4 months ago you could easily find a name in this category for less than $100.
If you continue with only Chinese premium letters (Again, all letters except AEIOUV) with a pattern but not pronounceable you again see the prices rise. The cheapest name in this category was LKZK.com selling for $1,124, the most expensive was GGMG.com selling for $3,388 and the average sale price was $1,826. 4 months ago these names were trading for between $100-$150.
So what does this tell us? It tells us that LLLL.com’s have spiked in value across the board in 2015 at a rate of between 500%-1000% depending on category. Earlier this year, I bought a small portfolio of only 12 LLLL.com domain names for $40 each, which I could easily sell in today’s market for around $350 on average (one of them already sold for $1,500). In other words, a $480 investment would make a minimum of $4,200 in 6 months. Even if this staggering growth rate slows down by 75% you are still doubling your money within less than a year’s time. Show me another market in the world that is performing at a level like this.
According to LLLLSales.com the average price of LLLL.com domains has risen steadily since 2012 and have become a hot item in 2015 (http://domainshane.com/4l-com-llll-com-domain-prices/). We are now in a period of LLLL.com resurgence and expectations are that LLLL.com’s will reach and surpass their pre-2008 recession price points. Watch this interview with a top domain broker regarding short, liquid domain names http://www.domainsherpa.com/giuseppe-graziano-liquid-interview/.
The major selling points of LLLL.com domains is the fact that there are only a limited supply and that supply will never increase while demand will increase over time as new regions enter the domain world (we all saw what happened when China entered the market). .COM is the king of all Top Level Domain’s, aka extensions, being the default TLD and the most prestigious. Think of domain names as virtual real estate and LLLL is the up and coming neighborhood.
Definition of terms:
Pattern: There are many different letter patterns that you can find within the LLLL.com framework. The most valuable pattern on the market is CVCV standing for consonant, vowel, consonant, vowel. A few examples of this pattern would be: REFE.com, BABA.com, QEVU.com. You rarely find a CVCV selling for less than $1,000 and the average value is around $4,000. Examples of a less desirable patterns would be ABCA, AABC, ABBC, ABAC, AABA and so on meaning one of the letters is repeating in a pattern. When the same letter is grouped together in the pattern it tends to have slightly higher value, for example: FOPF.com sold for $360 the same day that BBXJ.com sold for $419.
Pronounceable: This indicates that the LLLL.com when said aloud can be pronounced. So a domain name such as DEZK.com which recently sold for $850 would hold more value than a name such as AQBJ.com which recently sold for $120. The most valuable Pronounceable domain names are actual word such as TREE.com or LIFE.com. Those names are typically sold with a 6 or 7 figure price tag.
Premium and Non-premium letters: In the Chinese markets, the preference is to avoid the letters A, E, I, O, U and V. In the Western markets, the preference is to avoid the letters J, Q, X, Z. When you see a name like GVHQ.com sell for $106 you see that it has Non-premium letters from both markets (V in the Chinese market, Q in the Western market).
*All figures based on Namebio.com reporting of sold LLLL.com’s within the past week
*This analysis is the opinion of the writer based on market trends and quantitative analysis