Investing in Quad Premiums Today

Like LLL.coms, it’s important to invest in quality if one wishes to be minimally exposed to future risk. As I’ve said many times before, I’ve long believed the triple premium segment is heavily undervalued (or that single/double premiums are grossly overvalued in comparison if you’d prefer to look at it that way). A quad premium isn’t better than a triple premium because it has more premium letters, rather, it’s better because it usually has a better chance of finding an enduser (that’s the whole premise behind premium letters). When that’s not the case, eg. a no traffic, no acronym, low google frequency, seemingly unbrandable quad premium is imho still considerably overvalued at $210. Why a triple premium with better enduser possibilities (eg. something with 3 strong letters and a U/W) might go for half of that is anyone’s guess — we see this in the LLL.com market as well. I blame it on most domainers not doing enough research before investing and taking the “lazy domainer” approach that quad premium > triple premim, despite the fact that in some cases single premium > quad premium. It’s always important to consider who will buy a domain before investing in it. The only true thing that should separate a quad premium from an LLLL.com available for less is the fact that the quad premium has a better chance of finding an enduser now or in the future — if that’s not the case, you really shouldn’t be paying a 1000% premium over what other LLLL.coms can be had for.

With Quad Premiums, I try to stay away from the letters F,G, and H, which routinely report the lowest sales results. Whenever possible, sticking to LLLL.coms containing 1 (or ideally 2-3) A,E,S, which almost always make for very strong LLLL.coms and letters C, I, L, O add powerful brandability (as do A,E,S once again, of course), especially as ending letters.

Assuming you’re buying near minimum wholesale (eg. under $225 per), I think you’re quite safe and insulated from future risk by staying away from quads containing F,G,H. Of course some quads with those letters are good, but as a general rule they do tend to report lower sales results. Very few domaining segments have as much data readily available to be analyzed as the LLLL.com market — this can be both a blessing and a curse. When it comes to LLLL.coms, statistics is your friend and going with “what sells” really is the only way to go.

Source: LLLL.com domains

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~ by Reece on July 22, 2008.

12 Responses to “Investing in Quad Premiums Today”

  1. Back up your reasoning with some kind of sales data. Sales data from NJ/SN/POOL should be taken with a grain of salt as it could be a self-fulling prophecy.

  2. Could you elaborate on what you’re interested in seeing Thomas?

    Sales data with respect to letter quality, with respect to minimum wholesale, etc?

    NJ/SN are a very significant source of sales data, why should they be taken with a grain of salt?

  3. Domainers have for a long time been saying that f/h is the low quality premiums. I’ve always wondered where that comes from. Snap/Namejet sales are 99.9% to domainers. Shouldn’t this be taken with a grain of salt? While i’m not disagreeing with your post, there needs to be some data like maybe Dnjournal archives?

    Thomas

  4. Hi Thomas,

    In that regards, you’re correct. I only analyze D2D sales myself and leave it to DN Journal to try and report as many enduser sales as they can. A large portion of enduser sales come with a NDA and the sample size of enduser LLLL.com sales is quite small in comparison to D2D sales.

    Perhaps worth noting: It might not be that F/H sell to endusers for less but that they sell less frequently to endusers (eg. lower odds of finding an enduser should your domain contain an F/H). That would explain domainer behavior and why domainers have been saying for a long time that they are lower quality premium letters.

    Some letters are obviously more premium than others — eg. A, S, E, of which 1+ is found in the large majority of top brands/companies in the English speaking world.

    You may very well be right about the enduser situation with respect to F/H.

  5. I was also thinking along the lines of probibility. The very definition of premium is kind of moot anyways. Just wanted to see some data like you do for the sales data. Anyways, keep up the good work.

    Thomas

  6. i read in your abouts pages that you shorted your collection of LLLL.coms. so u got rid of most of you nonpremium domains. in your price guide, u list $22 as the min price. my question is, is it wise to buy up llll.com domains for under that price? that’s what i’ve been doing the past couple months. i recently started getting into domaining. could use all the help i can get.

  7. Very interesting – thanks for doing this. We’re a pre-funded startup, so our budget is very small. We’re interested in the domain name zooq.com, but the owner quoted us $42,000! Anyone got any thoughts as to what the realistic market price for this domain might be?

  8. I wouldn’t pay more than $500 for it. The only plus to that name is the word zoo. They will never get $42,000 for that name.

  9. My apologies for the late replies… Agree completely with Jeremy on zooq.

    Bloggernoob, there is still a fair amount of uncertainty over what the next few months hold. While I believe you’ll do quite well for yourself buying under $22, assuming you can afford to hold into the new year, it’s very difficult to say what might happen over the next 2-3 months. There are a lot of renewals coming due, it’s quite apparent that the U.S. economy is continuing to struggle and this appears to be having repercussions elsewhere.

    My advice would be to invest only in domains you’re prepared to hold into 2009 unless you’re able to get them for 30%+ under my quoted minimums (assuming they are of course of “minimum quality”). Please keep in mind that all values I’ve quoted are for LLLL.coms with 1 full year of renewal and to subtract from that quoted $22 figure accordingly for domains expiring earlier.

    It’s much easier to flip the higher quality names for a profit than the lower quality ones. Quad premiums can be easily had for ~ $300 which can be resold for $400 (please see the price guide section for more info on investing in quality LLLL.coms).

    I’ve long held that I believe triple premium LLLL.coms are significantly underpriced and continue to believe that. I’ve seen a few of these go for prices in the low 20s which represent an outstanding bargain in my opinion.

    Best of luck with whatever you chose and welcome to the domaining world!

  10. Will you be publishing an August LLLL.com Price Guide ?

  11. Hi Jackie,

    I’ll release a new guide at the beginning of September (earlier if the market changes dramatically). The market has been quite stable since the July guide came out.

    The LLLL.com world just inherited a few big buyers (including me making my return to the LLLL.com buying scene), so I’m hesitant to publish anything until we see how/if this affects prices.

  12. seems like four letter domain market is crashing, but this is a good time to get some quality 4L.com bargains. couple of weeks back I think few 4L.com (the low end) found it hard to reach double figures on ebay.
    would love to see the new price guide

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