Sell-Through Rate (STR)

Sell-through rate is the number of domains you sold in a year divided by the number you held. Own 500 names, sell 8, and your STR is 1.6 percent. It's the number that decides whether a portfolio makes money, and most people don't know theirs.

For the average investor holding hand-registered and low-cost aftermarket names, one to two percent a year is normal. A tight, well-curated portfolio can run higher. A portfolio of names registered on a whim after a beer will run lower, and every one of them still costs a renewal.

The arithmetic is unforgiving. At a 1 percent STR and a $10 renewal, each sale has to cover a hundred names' worth of renewals just to break even. That's why average sale price and STR have to be looked at together, and why dropping the bottom of a portfolio usually improves both.