Generic Domain Names

Location, Location, Location

One of the first lessons in a real estate course is that the most important factor in site selection is the location. As the famous saying goes, “location, location, location!” If location is the most important factor in where to purchase real estate, why wouldn’t the domain name be one of the most important factors in where to open an online business? Why is it that most business schools merely gloss over the domain business?

I don’t believe a bad domain name can break a company with a good business model. I think a bad name can be detrimental, but it’s nothing that good SEO, Keyword advertising and old fashion marketing can’t fix at a high cost of course. I do believe that a great generic domain name can position a company much better, and it can make it easier for customers to find the company. If two companies offer the same product, same customer service and fulfillment, and similar advertising, I believe the company with the better domain name will see better results both in terms of search engine placement and natural traffic.

CuckooClocks.com & the Value of Domain Names

New Domainer and Blog Reader Writes

As usual, Frank Schilling gives a great example of why domain names are such a great unique business opportunity. As a domain investor, I often look at domain names with “rose colored glasses.” I try to buy names that are popular and have the highest paying keywords to help offset the cost of my acquisition. When I make a few dollars on a click, I am happy. However, it is very probable that I am leaving a considerable amount of money on the table by selling a “hot lead” for such a small price.

Frank, who frequently uses his RumCakes.com domain name as an example, uses CuckooClocks.com to illustrate why a great generic domain name is so valuable to an end user in that particular business, rather than to someone in the domain investment business:

“My wife bought this cuckoo clock from cuckooclocks.com .. This clock cost $2,219.00 (we paid the old price :- / ) .. How many uniques a day do you need to close a clock sale?.. 2, 5, 7 ? How much could you make selling cuckoo clocks?.. — Source: SevenMile.com

Ordinarily, a domain name like cuckooclocks.com might be worth a few thousand dollars to a domain investor based on traffic and expected annual ppc revenue. The owner would hope some of the web browsers click on the paid advertising links on his site to make a few dollars. However, for a person who actually sells cuckoo clocks rather than advertising space, this domain name is worth much, much more. Instead of trying to convince a web user to click on his link to earn a couple of dollars (or less), he is trying to get that person to buy a clock for a few thousand dollars.

Instead of a domain investor hoping that 1,000 visitors click on a link at $1.00 per click, the owner of cuckooclocks.com only needs 1 person to buy a $2,000 clock with a 50% profit margin. This is why generic domain names are so valuable to companies, and it’s also why many domain investors want to create small businesses around their generic domain names.

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