I’ve been criticized a few times about my coverage of various cctld – and/or lack of coverage. Simply put, I don’t think most are good long term investments when they are released. There are too many people trying to grab these new domain names at the bottom to sell them to the next round of fools who want to sell them to the next round of fools who want to… well, you get the picture.
Sure, quite a bit of money can be made on quickly reselling newly released domain names, but how will you know ahead of time if you get stuck “holding the bag?” I really can’t think of one cctld introduced in the last 5 years where a majority of the domains purchased in the aftermarket have held their value.
I am not averse to risk taking at all. In fact, I’ve been day trading GS ($86.60), LVS ($8.25) and MNTG ($2.69) for the last three days – sold the first two for a nice profit. At least with stock investments, there is a priced market where I can sell these stocks for a set price if the value goes down. I can generally put a stop loss and limit my losses in most cases. If you buy a domain name only because you think the price will increase due to the newest domain “trend,” you are really gambling.
Like I’ve said before, if an extension is accepted and widely used by the public five years after its release, and the values are increasing due to that, then I may buy to develop and hold as an investment. If you are buying just to get on the next bandwagon before it leaves the station, chances are good that you’ve already missed the boat and will get wet.
Escrow Services Reviewed
I had a chance to use EscrowDNS for a transaction this past week, and since I’ve used Escrow.com and Moniker escrow services before, I thought I would compare these three escrow services. Aside from a registrar relationship with Moniker, I am not personally connected to any of the companies, so this is as unbiased as possible and based on my own personal experiences.
Moniker Escrow Service:
How it works: Buyer and seller agree to a transaction online. Buyer and seller sign and fax/scan the agreement to Moniker, which is then approved by Moniker staff. Seller pushes domain from Moniker account or provides EPP code to Moniker for a transfer from another registrar. Buyer sends Moniker the funds via wire transfer or other form of payment. When Moniker has money and domain name, they push the domain to the buyer’s Moniker account and the seller can request the funds be disbursed.
Fees: $5,000 sale = $149 $10,000 sale = $200, $50,000 sale = $450
My Take: I really like how Moniker controls the entire process, although it can sometimes take extra time since they must review the signed agreements manually and since people don’t always sign and fax their agreements back quickly. The company is known throughout the domain industry and other various industries, so trust isn’t a problem (I have done several large transactions with them without any problems). When I am dealing with non-domain investors who don’t know Moniker, most are willing to use them after researching their reputation, but some are still a bit hesitant if they don’t have their name registered with Moniker.
Overall, Moniker provides great support (email and phone) and I trust them entirely. My one and only beef is that they will usually report a private sale with DNJournal unless you tell them otherwise (happened to me twice). Make sure you ask for confidentiality – especially if you sign a separate NDA with the buyer/seller, as Moniker isn’t a participant to that side agreement and may report it publicly.
EscrowDNS Escrow Service:
How it works: Buyer and seller agree to a transaction online. Buyer and seller agree to the terms outlined in the online agreement. Buyer sends payment to EscrowDNS escrow account. Seller receives a prompt that buyer has paid, and seller is instructed to push the domain name into EscrowDNS’ account at the registrar. Once EscrowDNS has the buyer’s account number, they push the name to buyer and send the funds to the seller.
Fees: $5,000 sale = $200, $10,000 sale = $177.50, $50,000 sale = $500
My Take: Although they are relatively new to the escrow business, I thought they handled my transaction well, especially with their manually managed emails. Their communication via email was stellar, keeping me posted along the way. The company doesn’t have a long history, so non-domainers may be reticent to use their services initially for large transactions, but I wouldn’t hesitate using them on future transactions with other domain investors who know of the company. Most of my trust is due to the reputation of the company founder Justin Godfrey (with whom I have never done business but know of several positive dealings).
Overall, the transaction was completed very quickly – in less than 48 hours, something that is good when dealing with another professional domain investor. I was a bit concerned when I received an email from them telling me there was a bit of a shortfall in the seller’s payment after they told me to transfer the domain to their escrow account, however, I was assured that they were going to cover the shortfall temporarily, so the transaction wasn’t delayed. All together, my most recent transaction was completed in under 48 hours.
Escrow.com Escrow Service:
How it works: Buyer and seller agree to a transaction online. Buyer and seller agree to the terms outlined in the online agreement. Buyer sends payment to Escrow.com escrow account. Seller receives a prompt that buyer has paid, and seller is instructed to transfer the domain name. Buyer and seller need to discuss whether the name will be pushed to buyer’s account at the registrar or whether it should be transferred to another registrar of buyer’s choice. Seller then confirms that the domain transfer was initiated. Buyer then confirms that the domain was received to begin an “inspection period.” Buyer then accepts the “merchandise” to inform Escrow.com the transfer was completed and funds should be disbursed.
Fees: $5,000 sale = $162.50, $10,000 sale = $175.50, $50,000 sale = $445
My Take: Escrow.com is very easy to work with and the process is almost completely automated. People in and out of the industry know of Escrow.com and trust them with their money, so I’ve never had anyone not want to use them when prompted – even non domain investors who haven’t used an escrow service before. It is very easy to initiate and follow through with a transaction, and they have pretty good phone support, which is helpful when people forget to update the transaction.
My only issue with Escrow.com is that it seems a bit peculiar that the escrow service doesn’t take possession of the domain name and the money. Also, why is there an inspection period that begins after the domain name is received? I haven’t run in to this problem before, but what would happen if the seller says the name is transferred but the buyer adds privacy service and says he never received the domain name? While I am careful about who I do business with, I am concerned that this could be an issue, although I would hope they have internal safeguards. I do use Escrow.com more than other services because it is quick, generally trusted by non-domain investors and I can easily explain how to do a transfer.
All in all, I think domain owners have some great escrow options.
5 With… Warren Royal, Owner – Bobbleheads.com
Warren Royal has been in the online world for a while. He started a small BBS (Bulletin Board System) in 1988, and it grew over the years to be one of the most popular online systems in the country in 1993. At that time, Warren serviced subscribers from all over the world, and registered his first domain, so that he could expand his mail services to include internet mail. (He still has that domain today).
Later, as the internet became more popular, BBSs lost favor, and Warren converted his BBS to an Internet Service Provider, and offered dialup and website design services to his clients. Warren became very involved in domain acquisition in 1998 to assist clients with some new products and services he offered, and he still has most of those domains today.
Since that time, Warren has gone back and forth between entrepreneurial activities and corporate technology management. Warren earned his MBA degree at night, and for many years, he worked as an IT manager in the mortgage industry – and eventually became the CTO for a large mortgage company in Atlanta. At that time, he was commuting 2 1/2 to 3 hours each day to his office. In early 2007, the mortgage industry imploded, and his employer shut down literally overnight. Warren decided to go back into business for himself again, and to focus on internet and domain development. And since then, that’s what he’s been doing.
In the meantime, Warren also published a pictorial history book about his hometown in South Georgia, and has launched Shreveport.com and a number of other smaller GEO websites. One of his projects, Bobbleheads.com, has also been keeping him busy, and the site has become one of the most popular bobble head doll websites.
EJS: 1) When you were thinking about buying Bobbleheads.com, did you already have a plan for the website or did you come up with the plan after owning the name?
WR: When I saw the domain Bobbleheads.com at auction, I knew instantly that I had to have it. It was an extremely active auction, but I was determined to get it. It was the type of domain that you could develop, or park, and do very well with it either way. I didn’t know a single thing about the bobblehead business, and wasn’t exactly sure what I would do with it, but I knew it was the type of name that you could build a business around. Then, the next month, the singular version (Bobblehead.com) came up for auction, too – and I was also the successful bidder of that one. Once I bought the two names, and spent some time researching the industry, I decided that there was a great market opportunity, and to move forward and to develop a full business plan around the names.
EJS: 2) Are you finding it challenging to run a business like Bobbleheads.com while managing other websites such as Shreveport.com?
WR: Bobbleheads.com definitely keeps me busy, and it is a challenge. I’ve completely bootstrapped it, and am trying very hard to keep it a “one-man-operation”, but it’s starting to outgrow me. It is my first real internet business that is based upon actual products and services rather than being completely “virtual”. This is a significant difference from many websites. In the real world of product sales, you have to purchase and store inventory, deal with credit card processing and sales taxes, keep shipping tape and cardboard boxes on hand, and provide superior customer service. It’s a real business. Currently, we stock about 210 different products and over 3300 individual pieces- and we’ve only been in business for 5 months! It is still manageable, but if it continues to grow I will need to add staff.
EJS: 3) What was the process you undertook to develop the site, find products, and build an ecommerce website?
WR: Due to my extensive web development background, and my exposure to web technologies and tools, I decided to undertake the project myself. I found some great third-party technologies that gave me almost everything that I need, and was able to build the core site myself in less than a week. Setting up the interfaces with the credit card and shipping companies was a little tricky, but the software that I chose does a really good job of dealing with these complexities. As far as the products, I had to teach myself everything that I could about the industry. I called every vendor I could find, and fortunately they were very helpful and brought me up to speed quickly as their partner.
EJS: 4) Could you have had the same success with a name like eBobbleheads.com or CoolBobbleheads.com?
WR: No way. One obvious benefit is the substantial type-in traffic that I receive as a result of having this name. From the moment I opened the site, I had visitors who were looking for bobbleheads and were ready to buy. That was with zero marketing or advertising. But the greater benefit has been the instant credibility that I have been able to achieve with important industry contacts, such as vendors, and large corporate customers. When you own the name, you own the brand – and you are viewed as the authoritative resource for your category. Additionally, my site is now #1 on Google for the search term “bobbleheads”, after only being up 5 months. I’m not sure if that would have happened if my domain was something different.
EJS: 5) What are your goals for your domain/development business, and how does Bobbleheads.com fit in to that plan?
WR: Bobbleheads.com is doing very well. It has been profitable since the first month, and my monthly sales have grown almost 10-fold since June. The election has had a huge impact – we’ve sold over 500 election-related pieces alone. And we haven’t even hit the holiday season yet – I’ve heard from industry partners that we should expect sales to explode in November and December. Once I get through this busy season, I’ll probably hire a fulfillment company to take over the physical aspects of the business, which will allow me to scale it to a much larger size.
Long term, I plan to create several more businesses like this one, where I can bootstrap them and build them into substantial businesses. I also see Shreveport.com and my other Geos as being significant opportunities.
***BONUS QUESTION***
EJS 6) How did the Rick Schwartz bobblehead come about?
WR: I got the idea during the TRAFFIC conference in Orlando earlier this year, shortly after I had acquired the name. An artist had just drawn a great caricature of Rick, and I thought it would be great fun to do a custom bobblehead of him and surprise everyone at the NY Traffic show. I approached Rick, and he said “Sure!”. He is a great sport, and thought it would be fun. So we decided to move ahead with it.
I contracted with a partner who has offices in Mexico and China, and they had an artist sculpt his image in clay. We went through several versions, and Rick approved each one along the way, before they finally “fired” the clay figure and created a mold. They were then produced in China and hand-painted, and then we shipped 250 of them to New York just in time for the show. They were a huge success! I supplied the 250 TRAFFIC giveaways as a promotion, and am offering the rest at Bobbleheads.com.
We are going to do more; we are considering other candidates for the next
promotion. Stay tuned!
Tucows Sells Their Domains via YummyNames
Tucows, a publicly traded company, recently launched a new domain sales/leasing/consulting platform that allows companies to obtain domain names from within the Tucows portfolio. Some of the names that are in the YummyNames showcase include Aerodynamic.com, BikeRiders.com, Back.com, DietFood.com, FootballFan.com, PoliceOfficer.com, Punchlines.com, and many other premium domain names.
YummyNames is offering domain sales, domain leasing, and domain consulting for business and private clients. Some of YummyNames’ listed clients include Johnson & Johnson, Microsoft, Nestle, and RBC Royal Bank. While the site offers a search feature on their site, it might be more effective to have a list of domain names in various categories for people to look through. Also, it might behoove them to place a link on their pages letting businesses know the domain may be available for lease or sale. I know many non-domain investors type in the domain name to see if it’s available and wouldn’t find YummyNames.
I am a bit perplexed at the selection of YummyNames for their corporate branding though given the quality and quantity of the Tucows’ portfolio.
Christian Science Monitor Ditches Print for Web
According to a breaking news story in the Boston Globe this afternoon, the Christian Science Monitor has opted to eliminate its [update] weekly print edition to focus on its core business, CSMonitor.com, its website. The article quotes CS Monitor editor John Yemma,
“We are getting out of the daily print business,” Yemma said. “By harnessing (our staff) to ‘Web first’ we will be putting the best of our content on the Web when it happens. It will be much more energetic. Much more a go-to place.”
With the cost of print increasingly becoming more expensive, it’s no surprise that a longtime print publication would opt to move online. Advertising is trackable, which appeals to advertisers, and it’s much more economical to publish online. Smart move by the Christian Science Monitor, that I expect will be followed by many other print publishers.
This is very big news for domain owners who have names that might be coveted by publishers – geodomains, for example 🙂 .