Length Matters with LTO

I’ve added the least to own (LTO) option on nearly all of the domain names I have listed for sale with BIN prices. LTO can make it easier for a buyer with a smaller budget to have access to a more valuable domain name. They can use the domain name to grow the business while paying it off. A seller can also benefit from a steady stream of income. It can be a win/win.

Platforms that offer LTO allow the seller to choose the length of time for the LTO. Sellers can generally choose anywhere from 2 months to 60 months, depending on the purchase price. Typically, I’ve been choosing 36-48 months, depending on the price point.

Atom.com Founder and CEO Darpan Munjal shared some insight that could be helpful to sellers in selecting the length of time they are willing to offer for LTO deals:

While longer payment plans can boost STR, they also carry a higher risk of cancellations.

Understanding this risk is crucial for finding the sweet spot between STR and realized revenue.

Based on our data, 48-month payment plans resulted in significantly higher cancellation… pic.twitter.com/tprXoyG00K

— Darpan (@darpanmunjal) May 26, 2024

Darpan later followed up to share that the data is from more than 10,000 LTO sales. He has been answering other questions about LTO length, so feel free to reach out on X if you have questions.

Having a LTO cancel after a buyer makes some payments is not the end of the world. The seller keeps all the money and has the domain name returned where it can be sold to someone else. Obviously, the more money collected in the interim, the better.

In looking at the data Darpan shared, I am going to consider shortening the length of time on the longer deals I offer. I will probably max it out at 36 months. I will need to figure out how to search by length of LTO and then do a bulk change. I might need to lean on an Account Manager for this.