How to prepare your domain name investment business for a recession and thrive in tough economic times.

At Efty we don’t charge a commission on sales generated through the platform so we don’t have an incentive to sugar-coat the facts in an attempt to drum up more business.

The impact of the coronavirus pandemic is having a profound and serious impact on the global economy with most of the disruptions affecting the demand side. Many businesses are holding off on investments amid the growing uncertainty and as a result inquiries at Efty are down 14.5% in March compared to the previous month.

Meanwhile, as more aspects of our daily lives have moved online due to the coronavirus, the platform-wide traffic across Efty powered For-Sale landing pages has increased by more than 37% compared to February and will soon hit 4 million users per month.

This is in line with internet usage being up 50% in some parts of the world as many of us are now connecting to the internet from our living rooms and home offices every day.

While increased internet usage certainly can be one of the silver linings of the terrible situation the world currently finds itself in, the fact remains that many people will lose their jobs and incomes as businesses shutter their operations and there will be less venture funding for new startup companies which will have a negative impact on the domain name aftermarket.

As a domain name investor, it will be wise to make some moves, not necessarily to survive but to thrive during these tough economic times. Here’s how:

Portfolio hygiene

Domain Name portfolio hygiene means reviewing the domain names you own on a regular basis and determining which ones to keep and which ones to liquidate or drop. You can do your domain portfolio hygiene review either once a year or once a month when you sign in to your registrar to renew domain names, but regardless — it is necessary to do on a regular basis to maintain a healthy and profitable investment portfolio. You only need to ask yourself three questions to maintain a healthy domain name portfolio:

1. How long have you owned the domain name?
2. How many unique visitors does the domain name receive per month?
3. How many offers have you received on the domain name?

I’ll let DNAcademy founder Michael Cyger walk you through this process step-by-step.

To make things easy, Efty has a designated tab for keeping track of your domains that are about to expire. Get on with it.

Track and plan expenses

Now you have cleaned up your portfolio you want to make sure not to be caught off guard by renewal fees. Start planning out your monthly expenses today so you can match it to your income by adding renewal fees for all your domains. This can be done for your entire portfolio at once with our Bulk Import & Update tool.

Once done, you will see a visual overview of your upcoming renewal fees under the financial reporting tab within your Efty account. This way you know exactly how much you need to set aside for upcoming renewals.

Re-evaluate your prices

Making sure your portfolio is reasonably priced for steady cash flow is key during these challenging times. Most aftermarket domain names sell in the US$2,000 range, and the vast majority of the rest of domain names that are being purchased on the secondary market go for under $5,000. So unless your portfolio is stocked with premium domain names we recommended you market most of them with a realistic price. If you enjoy the process of negotiating a deal then Efty offers a large number of Make Offer and Price Upon Request for-sale landing pages too, allowing you to do some due diligence on the interested party and their budget before quoting your price. A good advice while we’re still on this downward slope is don’t shoot for the moon.

Focus on profitable niches

Luckily there are always opportunities, even during a recession. With many of us quarantined or working from home, we see different patterns of entertainment consumption emerging and there’s an increased demand for solutions, products, and services that cater to our new lifestyles.  It is also not uncommon to see a large number of new startup companies emerge during times like these and it is to be expected to see increased demand for aftermarket domains in the following niches and industries:

• Remote Work & WFH
• E-Commerce
• Online Education
• Social Media
• Online Gaming
• Streaming services
• Video Communications

Last but not least, this downturn will bring down wholesale prices. So if you follow these tips and make sure you are financially stable and keep cash on hand, it will be your chance to make some great acquisitions and sell those domains for a handsome profit when the market recovers – which, in the end, it always will.

Stay safe, stay healthy, be kind to each other.