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Successful End User Sale From Start to Finish

Elliot Silver
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I want to share information about a successful end user sale I made with a domain name I recently acquired on Snapnames. Out of respect for the buyer, I am keeping the name and price private, but that’s not really important for the sake of this article.

I was looking through Snapnames a couple of weeks ago, and I saw a niche category defining domain name with one bidder. The name is one aspect of a large industry, but there are companies that specialize in this area. The GAKT numbers are decent, and there are a lot of companies that use this term in their domain names (CityXxxxxxXxxxxx.com for example).

As the auction progressed into its final minutes, it shot up from under $100 to several hundred dollars, but I was the winning bidder. I know the domain investment company I was bidding against, so I knew that I wasn’t battling an end user who would have more knowledge about the actual industry value than I could have.

As usual, I offered the domain name for sale to some of my clients, but there wasn’t interest. I was concerned that I possibly over paid for the 10 year old domain name, but I thought a company that specializes in this would be willing to pay above what a domain investor could justify. I did some Google research using the term (in quotes to ensure this exact term was being used), and I sent prospects the following email:

Good afternoon,

I noticed that your company is listed (used the word “advertising” to companies that are paying for Adwords) on Google for the key phrase “xxxxxxx xxxxx,” and my company is selling the exact match domain name “XxxxxxxXxxxx.com. The domain name was created back in January of 2000, and developing it could provide a SEO boost.

If you are interested in acquiring XxxxxxxXxxxx.com, please let me know. I am offering it to several xyz companies in the next few days.”

Regards,
Elliot

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Elliot J. Silver
Top Notch Domains, LLC

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I sent a total of 24 emails to prospective buyers using the contact forms or email addresses available on their websites. In total, I received 7 replies, all of which were from people that were interested. A few people said they’d love to buy the name but times were tough. A couple suggested I hold the name for another year or so to increase the value because that particular business is just now seeing a recovery.

I received two offers – one for under $1,000 and the other in the thousands of dollars range from a NYSE publicly traded company that happens to be the leader in the industry. Although I attempted to negotiate, they stuck to their initial best offer, and I agreed to sell them the domain name. We used Escrow.com for the transaction, and the transfer/sale was finalized this week.

I believe I sold the name for much more that it would have sold to another domain investor. I know there are people doing this type of thing every day, and I want to share my approach from start to finish.

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2010 Domain Conferences: Are You Going/Have You Gone?

Elliot Silver
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Much has been made of the abundance of domain conferences on the 2010 calendar, and more seem to be added every month. With the first quarter of 2010 almost finished, I am wondering how many people have attended at least one paid domain conference so far this year, and/or if you plan to attend a conference during the remainder of the year.

A couple years ago, it wasn’t all that unlikely for many domain investors to hit all of the conferences in one year, as there were somewhere around 3-4 of them in total. In the coming months, there are a whole lot more, including many new conferences.

Upcoming conferences include Traffic Milan, GeoDomain Expo, Traffic Dublin, Traffic Vancouver, Traffic Florida, DomainFest Ft. Lauderdale, DomainFest New York, DomainFest Prague, Domainer Cruise, Domain Roundtable, Domain Convergence, and probably a few others I am forgetting about (sorry).

I am still in the process of making plans for upcoming conferences, although my summer travel schedule is pretty booked for personal things. I am nearly certain I will be going to Hong Kong for Traffic, and although I have a commitment back in New York on Friday, April 30th, I hope to be able to be in New Orleans for the GeoDomain Expo (next earlybird end date is March 31). I also would like to get up to Vancouver for the June Traffic show.

Have you been to a conference this year or do you plan to attend one? Please feel free to leave a comment about why you haven’t gone or why you plan to attend one.


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Winners Announced for Domain Registration Contest

Elliot Silver
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4

After a successful IDN Domain hand registration contest held on my blog, sponsored by IDNTools.com, I am happy to announced the three prize-winning winners:

  1. Jose 美容整形男性.com
  2. Clotho 男性整形.com
  3. Ruy 結婚相談所 大阪.com

The first place winner received $150, the second place finisher received $100, and the third place finisher received $50. There were a number of good entries, and I appreciate all of the submissions.

If you are looking to invest in IDN domain names, or if you just want to learn more about them, I recommend reading the best IDN Blog, signing up for the IDN Newsletter, and checking out IDNTools.com.

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Some Sales May Not Seem to Make Sense to Me, But They Make Sense to The Buyer

Elliot Silver
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12

I frequently see domain sales reports that don’t make a whole lot of sense to me at face value. The sales prices may seem off the charts compared to names I believe are similar. Does this mean that a sales venue or seller has fraudulently reported it or that there was something else nefarious that caused a sale to happen? In most cases, that is unlikely (especially because Ron does his best to verify sales). It’s more likely that the people analyzing the sales – like myself – just don’t have enough information about the sale in order to form an educated opinion on it.

As I have mentioned in the past, you sometimes need to overpay to get the domain name(s) you want or need for a project. Sellers frequently need to be convinced to sell their domain names, and it can take a significant offer to make it happen. With a proven business model or a strong business plan, these domain acquisitions may make sense to the buyer, although they leave others shaking their heads.

Likewise, a domain name may have certain attributes (like type-in traffic) that results in significant revenue opportunities. When this is the case, a buyer may have a plan to monetize the traffic much better than the seller, and he can therefore pay more for the domain name than others would value it at. A sales price may seem high, but in reality, the price is favorable to the buyer.

Aside from questioning the validity of specific sales, another thing that some people do is transpose their perceived rationale for a domain sale onto the value of their own domain names.   “XYZ.com sold for $100,000, so my domain name, e-XYZ.net must be worth $10,000,” some people exclaim. This is usually not the case since domain names are unique.

While abnormal domain sales take place all the time, uninformed domain investors shouldn’t question the validity of the sales without any type of evidence (other than their own perception), especially in a public forum. Further, domain investors shouldn’t presume their domain names are worth the same amount since all domain names are unique assets.

Finding Affiliate Partners for Websites

Elliot Silver
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One of the primary reasons I chose to re-design Lowell.com was to change my approach to advertising sales. At the moment, the sales process is manual, and advertisers cannot sign up without contacting me. Big mistake. I am not a great sales person when it comes to advertising, and I don’t like making cold calls or sending emails. As a result, I only have a few advertisers on the site.

With the new site (which I hope to launch within 2 weeks), advertisers will be able to create and pay for directory listings manually in the Yellow Pages, although the more expensive banners will still be generated by me. I’ve had considerable interest in Yellow Pages listings, and I expect the revenue from listings to pay for the re-design within just a few months.

Although I have a few local advertisers (including the Courtyard by Marriott), I want to add some affiliate banners as well (including a new prominent 728×90 spot and 250×250 spot). Finding appropriate affiliate programs is a bit of a challenge because of the broad nature of Lowell.com, but I want to share a few things that I am doing, hopefully starting a bit of a discussion.

Here are a few things I am considering when selecting affiliates from Linkshare:

  • Does the affiliate compete with current local advertisers (like hotels or photography)?
  • What companies are running advertisements on competing websites?
  • What is the commission rate and length of time for cookies?
  • Is there local brand recognition?
  • Will the banners look good on the site?

I think the biggest thing for me will be testing. Since Lowell.com gets between 15,000 – 20,000 unique visitors a month now (despite not being updated in 2 months), there is enough traffic to test different banners. I plan to rotate affiliate banners, testing CTR/Revenue with different banner offers, as well as Adsense.

I know Adsense generates revenue as I have it in select spots on the current site, but I also know it leaves money on the table. I want to see if I can find compelling offers that will blow Adsense out of the water. I don’t know if it will be possible, but I am going to test it.

One thing I do know is that direct ad sales will be the most profitable banner advertising. I hope to be able to fully replace affiliate banners and Adsense banners within a few months. However, I am not counting on that since I don’t have a sales representative yet. In the meantime, I will be doing a lot of testing.

Have you run affiliate banners on a general interest website (like Lowell.com), and if so, what has your experience been?

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Help Us Support Ronald McDonald House!

Elliot Silver
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On May 2, 2010, my wife and I will be members of Team Ronald in the TD Bank Five Boro Bike Tour, helping to raise funds for the Ronald McDonald House of New York. If you aren’t familiar with this great non-profit organization, the Ronald McDonald House provides support and care for families who have children battling cancer. The people at Ronald McDonald House help make the lives of child cancer patients and their families better (and easier) when they need it most – as they fight cancer.

According to the RMDH website, the organization’s mission is to “support each family and coordinate emotional and physical services, psychological care, ministry support, wellness programs, tutors, music, art, transportation, activities for siblings, holiday and birthday parties and camaraderie for parents struggling with their child’s cancer diagnosis.”

My wife and I will be riding in the 42 mile 5 Boro Bike Tour in about a month, and we need to raise $2,500 from our family, friends, and colleagues who want to help support the Ronald McDonald House, too. Writing a check is easy, but asking our social network is more difficult, and we hope to raise a lot of money and bring more awareness to this great organization.

If you would be willing to support Ronald McDonald House on our behalf, Karen and I would greatly appreciate it.   I have never done anything like this before, and I hope we can count on you for any help you can give. You can easily donate online via the Ronald McDonald House website to help us reach our goal. You can also follow our fundraising progress, too.

THANKS!

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