I’ve known Bill McClure for a few years, having met him at several domain conferences, and I admire his business successes. I’ve written about him before, from buying Coffee.org for $100,000 and building a big business on it, to buying Bouquet.com at auction. There has been quite a bit of discussion about the Coffee.Club deal, and I think the deal is good for both parties.
What this deal boils down to is something that all domain investors deal with on a daily basis. The .Club registry had a domain name asset in Coffee.Club that it valued greatly. Bill McClure and his team wanted to own this asset, and they struck a deal to make it happen. Some people probably think $100k is way too much, but the deal seems to be struck in a manner that will make it easier to achieve an ROI more quickly.
I asked Bill about why he chose Coffee.Club rather than any other new gTLD extensions, and he made it clear that this was his top choice. “I believe Coffee.Club has a better chance of success than any other gtld,” he told me.
I think this deal is good for Bill McClure and his family because they were able to secure a domain name that works as a brand for their new business. Bill told me that the plans are for this to be a subscription coffee service, and the goal is to launch this coming Cyber Monday. Yes, this probably could have been done on Coffee.org, but they are building a sister brand on a domain name that makes sense for it. They will also be able to pay off this purchase over time, so there is not a pressure to make money immediately.
Once this new business is launched, I presume they are going to receive publicity from the .Club registry, which will no doubt be excited to tout the newest .Club website. In my opinion, the .Club team has done a good job of marketing and PR, and they will likely give a boost to Coffee.Club once it is launched.
The deal is also good for the .Club registry. Firstly, they can highlight a $100,000 deal for one of their domain names, even though the money is not all up front. They will also be able to share an end user case study once the Coffee.Club brand is launched. Additionally, I assume Bill McClure will market the new Coffee.Club website to his Coffee.org customers, and having more people become aware of the .Club extension is good for them. Finally, they will be earning revenue off of a domain name that would otherwise be unused or possibly parked. This is a longer term play, but I think that is the case for the new gTLDs.
Whether Ron Jackson considers this a done deal or not at this point due to the payment plan does not really matter as far as I am concerned. Perhaps the deal was on the expensive side in terms of today’s dollars, but there are plenty of times an end user needed to pay more for a coveted domain name than others may think it is worth… just look at the $100,000 Coffee.org sale for an example.
When all is said and done, I think this will be a good deal for both parties.