With apologies for stealing Mike’s title, I wanted to show another example of the great point he made (and one that many others have also been saying). The main reason why I am developing some of my websites is because I want to generate the most revenue per visitor. I believe there are 4 levels of doing this – the top 3 of which can only be harnessed by developing a domain name rather than parking.
- Selling your product or service to visitor
- Selling another company’s product or service and earning a commission
- Selling advertising space directly to a company who sells that product or service
- PPC advertising
While I was reading Mike’s post about what a click is worth, I received the following email from one of my developed websites:
Hotel Name: Doubletree Hotel
Note: There may be a time delay for this reservation to be reflected in the property’s reservation system.
Map/Driving Directions Local Weather
Check-in date:: Friday, October 10, 2008 Check-in time: 1500
Check-out date: Sunday, October 12, 2008 Check-out time: 1200
Number of rooms: 1
Number of nights: 2
Number of adults: 2
Room description: 2 Double Beds Non Smoking Non Refundable
Rate breakdown: 134.10 USD for Friday, October 10, 2008
134.10 USD for Saturday, October 11, 2008
Total rate: 268.20
Taxes and fees: 42.90
Total (1 Room): 311.10
Payment Information: $311.10 USD charged to your credit card to secure this special rate. This amount includes room rate, tax recovery charges and applicable service fees and extra person charges, if any. Hotel rates are based on double occupancy unless otherwise noted. Charges for extra persons and / or children may apply and will be due directly to the hotel at the time of check-out.
It can be very difficult (if not impossible) for a domain investor to build and manage a completely separate company on one of his domain names (see Bobbleheads.com as a great example of a business run by a domain investor). A business owner needs to be passionate about his industry, and running a business takes a tremendous amount of time and effort.
However, there are happy mediums between running a full business and operating a pay per click website. Mike illustrated how a click that would have earned him $1.00 turned into a $300 sale. Likewise, my hotel reservation would have yielded a $1.00 click, but now I made 10-20x that on the sale. While obviously the conversion rate needs to be 10% or higher for this particular sale to make sense, most of my hotel reservations yield greater returns.
Depending on the product or service our sites promote, we really could be giving away the house when we park domain names.
Yes and no…developing in my mind is certainly a better deal overall, but some people will instantly think that a click is worth $300, while forgetting about the other 299 clicks that didn’t convert.
One of my new domains sold $180 worth of products yesterday, netting me $18 – but the domain hadn’t sold anything else all month. So the click wasn’t worth $18 – it was worth $.25 – just like the rest of them.
***UPDATED BY ELLIOT***
But that assumes all of those visitors would have clicked. Mike mentioned that his site doesn’t get a ton of traffic, so that $300 “click” would cover a lot of non-clicks. As I said, you have to consider the other people who would have clicked an ad but weren’t ready to make a purchase.
In one word, a FORTUNE!
I had a lead gen click on one of my dev’d sites where the investor was looking for oil properties to buy up to $250 Million.
How can you put a price on that? You can’t. The contact and connection alone is worth a fortune, let alone any sales that transpire from it.
Hi. May I ask what hotel affiliate You’re using? 😉
I have some domains with some small traffic that I’d like to develop and build some backlinks.
On other hand I’m moving my expired domains catches to WhyPark as I don’t want to lose traffic by parking (expired traffic + SE).
Meanwhile, your developed website is earning page rank, and perhaps adding reciprocal links, and maybe you are retaining customers for more purchases down the road -all things that look great to end user buyers…
Plus, an end-user would look favorably at a $300 purchase knowing that with some of the marketing and SEO that they are already doing on their existing site they could potentially ramp up revenues rather quickly. At least that would be what I would be trying to explain to them…
What do you recommend building your sites in; wordpress, joomla etc?
Recently I’ve been evaluating some of my domains in terms of who the end-user is for which domain. I do this because I develop all my domains within 5 minutes of registering them. Basically I make up a few pages that I figure an end user would want to have so I create a few pages with nice SEO elements so that when I choose to sell I can point to existing rankings with search engines. The trick is figuring out who the end user is going to be and it isn’t turning out to be all that easy of a task.
For example, if I owned both “NewYorkLawyers.com” and “NewYorkLawyer.com” then who is the logical end user? At first glance it seems that perhaps a law firm and a lawyer in either the city or the state might be reasonable assumptions. I assume that I’m going to be the person who sells the domain to the end user – the domain has one more owner after me and then it isn’t coming on sale ever again is what I am aiming for. So I establish the worth of those domains over a lawyer’s twenty year career and I figure that it is a poor lawyer who can’t get $5,000 out of a new client and with one of those great domain names they should get one new client a year that they otherwise wouldn’t have and that means I want $100,000 apiece (for the sake of argument).
In preparation for selling I check out the search engine rankings for the domain which is actually a developed website as far as the search engines can see and I see it ranking well for the phrase “new york lawyer” but I still don’t think that the time is right for my sale and I can’t put PPC ads up as I’m reasonably sure from reading Google’s patents that they evaluate a website based in part on that website’s history and if is was a parked page then good luck washing away the parking stigma even when it becomes a valid, content rich actual website.
So, I’m not ready to sell, it isn’t all that easy to monetize a domain if I’m not willing to sully it with PPC ads, it ranks well (simply because it has a URL that is exactly the most direct search phrase) and finally I’m not doing anything with the traffic. It doesn’t take long for me to start imagining that “if only there were a New York lawyer who would give me $1000 if I steered a new client their way and somehow didn’t force me to be constantly wondering if the lawyers were getting clients and not telling me” – I don’t see myself as much of a policeman.
At that point I start asking myself if maybe I wouldn’t get a lawyer at least one client every month and that is $12,000 a year for my commission and then that same $100,000 price I had in mind of collecting from some astute lawyer seems like if I did it over a 20 year span that is $240,000 that my end user now has to give me because my end user is now a lawyer referral site owner. I don’t see those figures as being out of line.
Which brings me to the core of my problem, I keep thinking that maybe I’m the end user of a lot of the sites I own. I don’t own “NewYorkLawyer(s).com” but the same principle applies on the smaller scale that I deal with – does (for example) “PineBluffLawyers.com”, a reasonably average city of about 50,000 people, have enough value to make me consider that I might be the end user?
Anyway, I go on, but the sale of “NewYorkRestaurants.com” for $30,000+ a few days ago set me to considering a few things over the weekend. If it doesn’t take too much effort to be the end user I’m certainly ready for it. Or at least I’m getting ready for it, finding out what is out there.
What I’m looking for is some way to make it easy to get my honest commission while not sacrificing the elegance of the domain name to some cookie-cutter of a website. To get the big bucks I think it essential to maintain excellent search engine rankings and speaking as someone who has spent a lot of time working on the open source search engine that is “Nutch” I can tell you that I could ban all sites with a standard hotel reservation component to the webpage with the effort it takes to swat a fly. If Google actually decides that domainers (who have morphed into end users) are making too much money reserving hotel rooms or selling luxury bedroom stuff then it’s overnight extinction.
The only way I see around it is by working the referrals into actual relevant, fresh content. In my search for “the way” I came across a site called “PayPerPost dot com” and from there to “marketleverage dot com”. There is a lot of bad stuff at PayPerPost – basically, companies pay you for a mention in your weblog, as low as $5.00 a post but some of the blogger members are into the $150.00 a post range. I reviewed some of the content and the at least some of the more expensive ones are really good.
The idea is that these people write a well informed article about something and then put a referral in context within the article. They might have 20 different links in the blog “article” but only one of them goes to the company that is selling something and the whole of the article is well written and valuable. There is no way Google can eliminate that type of content otherwise searches are useless.
A lot of people, myself included, use Google’s Blog Search. Freshness is all important and so there needs to be new content every day. A site can’t ignore people who search blogs rather than “the web” and it is insanely easy to rank on blog search if you have the right domain name.
At any rate, I didn’t mean to get hung up on the advantages of blogging as relates to search engine visibility, the point is that these bloggers are getting paid by this “Market Leverage” company. I came across some convention that the bloggers had and the top guy had pulled in something like $200,000 in commissions that year. From blogging. Most of these bloggers don’t have anything resembling targeted domain names.
So maybe as the domains end user I should maybe hire some bloggers? Pay for content? I’m willing to do that if it is worth it. Or maybe the actual end user ought to be a blogger? Maybe I should start emailing those rich bloggers and seeing if they understand the actual value. Or maybe as relates to another of Elliot’s recent posts I should go into partnership with a blogger. Find one I like who writes about the sort of stuff I think the domain ought to be about and get an account with one of these advertising payperlead/payperacquisition places and offer to split the cash with them.
That is what I thought about over the weekend, anyway.
Forgive me if this sounds like a dumb question, but how is partnering with an individual business any different, than opening up an Amazon Webstore?
I know there is a monthly fee associated w/ Amazon, but in essence you are promoting products and getting commissions in both cases. I know the Webstore is mostly for your own products, so you would always have the option to sell and supply the actual product yourself. I am thinking it is possible to just sell Amazon products on your webstore because it looks better than the A-store. It seems, though, with Amazon, you would have more flexibility and ultimately more potential for growth… you wouldn’t be relying on one company for the supply and distribution of the product. Your success would depend on your marketing and ability to get people to buy off your sight.
I only ask, because my thoughts brought me to this question this weekend.
***UPDATED BY ELLIOT***
I think with a direct partnership, you can get much better commissions. Also, with a partnership, you can have a white label solution rather than the Amazon.com branded store. As far as I know, you can’t take off the Amazon branding from Amazon stores.
With your own store, you can run specials, make sure packages arrive on time, maintain a customer list for future marketing efforts, enclose coupons in the shipment…etc.
With an Amazon store, you are helping to build Amazon’s brand, when you could be building your own brand.
I understand where you’re getting, but Kelly and others like Greg are getting it right. There is nothing worse than PPC or better “parked names”. The only names that really pay out are Top of the line generics.
I had done something similar to what Greg is thinking about doing with his NewYorkLawyer name.
I registered a name put up a developed it and started handing out free leads to different company’s. It being a B2B site makes it even more interesting when it comes to leads.
Anyway to be on the secure side I bought the same name with the cc .de endings from 2 different sellers and it was quite a sum of money for me, not really knowing if the plan I had was going to work out. Oh and I mentioned the 2 cc names, well it has a “ü” in the name so I had to by the IDN and the “ue” meaning “ü”.
To get back to the point. I gave out the leads for free and knowing that if the lead receiving company does sign up a contract providing there services, they would be making about a average of 3000 € the $ exchange rate today is about 1,41. So that would be $4230.
That said, there was a few company’s making some good money on free leads. With a little SEO and not being up more than 6 months it has about 2 leads per day.
After giving out free leads for 4 months, I just put a stop to it.
It didn’t take 2 weeks until these company’s started mailing me, asking what happened? Why aren’t they getting any leads anymore? Is the Website down? Let me say it this way. I would not call it panic, but it was recognized. That’s most important!
Nnow there are 2 company’s paying for the leads, In 12 months I will double my lead price and if the offer is right I will sell.
I didn’t mention the price per lead and wont do it, but I will say this much. It earns more per day than what it would per year on PPC Parking or how you would like to name it.
It took me 3 years to really find out ” The Domain Game”
There is much more earnings when you develop. Forget all the PPC ads and promises on highest pay outs. If you sell then make the price right 10, 20 year earnings or your just another guy on ebay asking for donations.
I’m not arguing with anyone that development isn’t the way to go. I have been developing for almost 10 years. The only thing that sometimes bothers me is when people say “One click can sell an airplane…how much is that click worth??!!!”. Well, if you can go to google and buy the click for $.25 that is how much that click is worth.
Duane – I really like your idea for giving out the free leads and then shutting off the tap. Great way to prove value before you ask for the money.
you are right about the $.25 and a click selling a airplane. I think you are a pro like most here at elliot.
Ofcourse it depends on the market which you are promoting on youre pages. It just depends if you sell the lead on a $.25 click or if you have the customers begging for a offer on buying the plane and then, just forwarding the customer to someone to close the deal.
Oh and thanks for the compliment. At last one more thing Gordon.
You wrote: ” Great way to prove value before you ask for the money.”
See, I never asked them for money. They! made the offer to pay.