03|11|2011 02:40 pm EDT
With a good deal of confidence, I can say this epiphany bewildered more than a few domainers – some of which have been feeding the ‘sweet spot’ for years.
For if we look back and try and locate the origins of the ‘sweet spot’, we need look no further than the Gold Coast of Australia.
In late 2008, DomainConsultant.com and Aftermarket put on an auction at TRAFFIC Down Under that is likely still champ in terms of sell-through-rate (STR) – a whopping 81% of the names in the catalog.
And the total offering was not fifty, it was 100 names with an average sale price of…$3,000. Names sold included iUS.com, Up.com.au, Camera.co.uk, Saws.com and SkiEurope.com – almost all in the ‘sweet spot.’
Because while hitting the sweet spot repeatedly produces high STR, auctioneers must also find a way to yield, minimum, at least $200,000 in sales to break-even.
Making a profit? Depends on expenses but usually somewhere between $250,000 to $300,000 in sales.
And that is the rub, for in some ways you need to focus on the big dollar sale or the sweet spot but not both given time and resources, market and objectives (high STR vs. high figure).
Thus we can magnify the risk involved: too many sweet spot sales and you don’t make enough yet go for the big dollar and miss – and you end up with nothing.
It’s a tricky dance, yes, but by no means is it a new one.
This post is a guest post by Mike Fiol of DomainConsultant and Boxcar.com