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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.
When selling domain names, I believe most people either rely on end users contacting them or rely on selling to other domain investors. I think there is a market for a domain brokerage that is paid to contact potential buyers of domain names on behalf of domain owners.
The brokerage would collect stats and information about a domain name and present it to potential buyers. This is similar to my post in July, but instead of running an auction, the company would set a BIN price for a particular name or group of names that would be of interest to a company.
Currently, I believe most domain brokers work the opposite way. They receive information about a domain name and blast an email out to a random group of domain buyers. If a more personalized email was sent, the potential buyer could be enticed to make a purchase. It’s the heart of direct marketing (where I have my Master’s Degree), and it would be a great win/win/win for all parties.
I’ve been seeing quite a few articles about politicians buying the domain names of their opponents, but I haven’t seen something as blatant as what the lady in the aforementioned article has been doing. The lady apparently believes that she can buy the domain names of realtors, doctors and other professionals in the hopes of selling to them for a profit. I think this is a case of ignorance more than anything else, but it certainly isn’t right. This is straight-up cybersquatting.
As domain investing becomes more mainstream, educating new investors is going to be important. I believe it is the job of the registrars’ to educate their buyers. Companies like Godaddy have gone mainstream, but I believe they are failing to educate their consumers. You wouldn’t leave out seatbelts in a Ferrari, so registrars should educate their buyers on the laws of cybersquatting and the penalties they could bring. As I said in this post, consumers should have “to check off a box acknowledging that they are aware of the Lanham Act and its penalties before every registration.”
Someone needs to give this “domain reseller” a clue.
Top Notch Domains, LLC, a Nashua, New Hampshire based domain investment and development company, is pleased to announce the recent acquisition of the domain name Customs.com. The company intends to develop an informational website focusing on foreign and domestic travel requirements.
“We are thrilled to add this great domain name to our domain portfolio,” said Top Notch Domains President Elliot J. Silver. “We believe owning a prime generic domain name is one of the keys to a successful website, and Customs.com aligns with our growth strategy.” Customs.com will launch in Q2 2008.
Top Notch Domains, LLC owns domain names such as Devices.com, DrugCounseling.com, FlightDiscounts.com, and many other valuable generic domain names.
An acquaintance of mine is the owner of Rabbi.com. In one of the nicest online gestures I’ve seen, my acquaintance allows our mutual friend, Rabbi Levi Baumgarten to operate and use Rabbi.com. Rabbi Levi (as I call him), is one of the nicest people you would ever want to meet anywhere. He is the type of person I could call right now, and if I needed something that he could provide, I would have it by the end of the day.
Rabbi Levi is the man behind the Mitzvah Tank in New York City. If you’ve been to New York, you may have seen him in his RV trying to recruit Jews to do a mitzvah by putting on tefillin and saying a prayer. He isn’t pushy and doesn’t really preach. His goal is to give every Jewish person an opportunity to take a few minutes of their day and reconnect with their religion. Rabbi Levi is always willing to teach and answer any questions. If he doesn’t have an answer, he will do the research and get back to you. On the rare occasion when I can’t get home for a holiday, I know I have a place at his family’s dinner table.
I was thinking of Rabbi Levi this morning while making plans to try and see him in the Tank today, and I was thinking about the similarity between his mission and the mission of domain investors. Whenever we have an opportunity, we do our best to teach others about the importance and value of domain names. We don’t want to sound like preachers, but we want everyone to realize how valuable domain names are. His mission is much more holy, but we both want others to see our vision.
If only Rabbi Levi would add a Paypal link to his donation page, but I digress…