A marketplace charging 20% is actually taking away 80% of your net profits (1.Viewing)

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Someone asked in a private group about how many domains they'd need to sell at a $2k price point to make some money so I spun up a calculation based on a 1% STR and the results are really interesting...and also a little depressing. There's lots to discuss and take from it but my biggest takeaway by far was just how much an average 20% commission eats into your net profit at this price point/STR...80%.
So selling 1% at $2,000 on a marketplace charging 20% is actually taking away 80% of your net profits. EIGHTY PERCENT!

Also, holding 2000 names to make $10k a year isn't the stuff of dreams so think about your pricing strategy and portfolio quality. 1%/$2,000 isn't the way.
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Exactly. People entering the domain market have absolutely no idea on how 'Domain Math' works or how incredibly difficult it is to make a true profit.

So they just stumble in and start buying everything at domain auction, and at nosebleed prices, proceed to list them on a marketplace with 20-30% commission rates, and then wonder why their bank account is dropping.

Buying domains is easy, it's selling them that's hard.

Domain Math will absolutely eat you up and spit you out.
 
a 1% STR would be the min imo, i think people (me included aim for a 2-3% STR) for names sold $1k+
 
David said:
a 1% STR would be the min imo, i think people (me included aim for a 2-3% STR) for names sold $1k+
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1% is the average, and there are plenty of people on NPs posting that they own 500-1000+ domains and have had no sales in a year or more.

And this X post clearly referred to a new investor entering the market and for that segment, a 1% STR is usually unattainable the first year. This isn't an experienced domain investor with thousands of domains bought a decade ago, and it's a totally different marketplace for newbies starting out right now.
 

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