Are LLLL's Really Worth THAT Much?

I've been doing quite a bit of research on the three-four character domain boom currently happening across the world, and I find myself asking, are they REALLY that worthy of their asking price?

I mean, domains like xpqz.com and similar domains are virtually unusable, are difficult to associate with many businesses and make terrible keywords...

So please help me understand the significance of these domains in terms of $xx-xxxx value (apart from domain age).

 

despite being unusable those four letter domains that could be xpqz like you say might represent a multi million dollar company, someone somewhere will buy it

 

I don't disagree with you, but is holding these "obscurely" configured domains really worth it knowing that very few (if any) companies may step forward (especially with new TLD's rolling out and a deeper concentration on local SEO)?

 

I don't think it pays off as much as id used to but imagine having the starting capital to buy 6-7 4 letter domains a year, now imagine 1-2 of these domains will be purchased from you, initially you will pick these up for around 60% less than what you're selling them to the designated company/s, if you could do it, you could afford for the other 5-6 to not sell and carry forward, people have been doing this for years and it pays off, good point though and i like where you're coming from it does seem quite ridiculous to be honest

 

I see these weird letter combinations move ALL DAY on GoDaddy for low-mid $xxx. Some even registered as early as 2013...

I just wonder when the 'allure' will wear off.

 

I've seen a llll.com domain name go for $35. And it was not as bad as zqkw.com ( for example ).

You might think that if they are sold for 100$ today, they will worth 200$ tomorrow. But it is not that. It is this intrigue in the market, mostly for those new in domain speculation, that domain prices should always go up. This is true tough and easily demonstrated. Domain prices will always go up, but sine there are a lot of new guys who are interested in 4 letter coms, here is what happens:

When they buy a domain name llll.com for 200$, they think that the price will sure go up. But they have paid an inflated value where a good seller knew how to sell his domains. The real value of the domain was maybe $50. Then they try to sell it for $300, then $200 and few years later, tired of paying renew fees, just get rid of it for $35. At that point, an experienced buyer and domain speculator will buy it and sell it again for $200 or $300. The value of the domain is still $50, or maybe it went up to $60, but the profits are not made from the real value, but from the selling and marketing skills.

If you are good to selling, and know the market, you should buy 4 letter domain names and sell them. You might make good profits. But keeping them for a long period waiting for a company to have the first letters of the words in the name x,k,w and q, is not a good strategy. Money are made on resale.

 

Demand and Supply

LLLL are limited + demand is high = high price

 

I think @thedark hit it perfectly...perception of value and marketing skills seem to be two key areas of speculation.

 

The domain names aren't that expensive. It depends on the combination and whether the domain name is valuable to someone.
The ordering of the letters help, also if the domain is pronounceable they would generally go for more.
But I've seen LLLL.com domain names listed on eBay for around the $60 mark recently, and some looked fairly nice.
Its just when they are the letters match the company's abbreviation, premium lettering, or just appealing to someone - then the price increases.
A domain name like xpqz.com wouldn't go for much. Probably less than $50 really. Not pronounceable, hard to remember, and also contains less frequent lettering of the alphabet.

 

You can't just hand reg one these days and there aren't that many combinations. So Supply is only on the aftermarket. That inflates value. But the majority aren't that expensive. At least not today and that's the premise that leads investors to hoard them.

 

I see plenty of random LLLL domains here in China. So I guess they can have value for the right business (or as a anagram) even if it's just seams like gibberish.