Strategies for selling $1mn+ names?

[brian1234]

I can tell you with very high degree of certainty that ads are not the way to go to promote $M+ domain. You need to put together a list of companies for whom your domain would be the obvious top choice for one of their major projects. Then you send letters and call CEOs. Some people say contact marketing managers. I think CEOs are the right contacts with real top domains. I would not recommend emailing large companies. I would focus selling the name on how good it is and how much better it is than alternatives vs the cost of the name and how the cost of the name can be taken out of their marketing budget for this project.

Hey OK10, thanks for the great reply.

Yes, I agree that CEO's are the way forward for 'industry killer' domains. Names of lesser quality, then a CEO is not the best contact. I think i'm with you re: mailing a letter, but what do you think are the problems with sending email?

Are CEO emails more likely to end up in the trash because they are being more heavily screened, than say a letter would be, or there's the spam filter question?

 

[JEsports]

JEsports...5.5 years revenue? lol

last big generic I sold was for 25 years plus a base value..

ANY generic name making 15k/mo is an easy 2 mil minimum on a bad day...which is around just 12 years rev..and really should be at least 15 years rev imo (we are talking category kings)

Congratulations .. the buyers i am speaking of will not pay 25 years revenue. Which domain was this since you wanted to share?

 

[INVIGOR]

Why are so many folks obsessed with traffic and revenue valuation metrics?

Two people can own the exact same name and one may know how to optimize and monetize the same name better than the other. One may be parked with a shit company, while another may have the personal assistance of an account manager to maximize the revenue, etc. One may know how to create backlinks, page rank, and seo, while the other may not. One may have found a way around arbitrage, but still participate clandestinely, while other may not. Stats can also be inflated using rogue techniques. Not to mention, that the ppc industry in general has taken a decline in recent years. I just don't think this is a good way to valuate a domain. It's as if the car I'm selling is more valuable that your exact same car because I drove it to cooler places and some high profile people sat in it.

While they are important to guys that buy/sell and park, an enduser usually doesn't care about this valuation model. They want a name because it suits their business, don't want their competitor to have it, have a solid plan for it, directs traffic to their main site, etc. They want to hear how THAT NAME is going to bolster their business, not how it's going to make chump change (which is what it is to big companies). I'll give an example. A company makes reactors for petrochem industry. One reactor costs $5M. If reactors(.)com can bring in ONE sale, it's worth xyz dollars to that company not only because of it's potential to bring in those sales, but it's ability to DENY their competitors that advantage.

I hope this makes sense. To most million dollar end users that are not in the domaining business, it has very little to do with ppc and revenue. Traffic can be important, but again, not the main consideration.

 

[Biggie]

ok i think some people are missing the point of this thread.

To get a buyer in the mindset of of a domain being worth a million dollars, you need to know if they can have the budget for it. Lets say you get an offer for 500k you may have a buyer that can spend 1M. If they come to you, you know they want it for a reason. Otherwise why make such a high offer without being serious.

Talk.com sold for 500k. personally i think that sale was on the very low end actually really cheap. it should of gone for 3M min. Of course toys.com was an interesting sale. This had multiple parties interested to help drive up the price. They both obviously knew the value based on the keyword, brandability and type in traffic. Candy.com for instance was a smart move by the buyers because instantaneously they knew they had customers ready to buy and for life.

So when it comes down to it whats the best way to push that domain to the next level of 1m? educate your client on how powerful this domain would be if matched with the right company. Explain that category killer domains give instant credibility and buyers for life. They are buying an asset that they can always sell later on that will not only retain value but create more. The buyer needs to be in the mindset that Generic 1 word Domains are the equivalent of buying in beverly hills.

Another question is, how do you know your selling to the right buyer? Will holding out get you a better offer. I guarantee that if AT&T was pitched and you told them you were talking to skype and other competitors their ears might be at attention. Its always good to get more then 1 interested party.

JEsports...5.5 years revenue? lol

last big generic I sold was for 25 years plus a base value..

ANY generic name making 15k/mo is an easy 2 mil minimum on a bad day...which is around just 12 years rev..and really should be at least 15 years rev imo (we are talking category kings)

Congratulations .. the buyers i am speaking of will not pay 25 years revenue. Which domain was this since you wanted to share?

it seems there are two or more, "different marketing mindsets" going on here.

where we assume the OP seeks strategy to sell million dollar domain.

we draw different experiences and perspectives in how we value the generic that has traffic and revenue, vs maybe a generic without significant stats.

Focus and JE brings up points about domain value based on revenue, while the OP never touched on selling a domain based on stats.

while "all-drop" speaks of strategies geared directly towards end-users.

if we talk about domains without significant stats before development like "ireport.com" which reportedly sold in the mil range, vs. domains like "candy.com" which obviously had traffic and revenue, then i'm sure the efforts to sell and the strategies taken were different for both.

when we talk about selling 6 and 7 figure priced domains based on a multiple of current revenue, then are most of those domains sales to end-users or other domainers?

when the OP seeks strategies, are they looking just to sell a domain for a mill$ to anyone or are they specifically looking for the end-user with a million dollar budget?

if there is a distinction between which are his objectives, then the strategies of marketing usually will not be the same for both markets.

domainers typically will not spend huge sums of cash on domains without having an idea of actual traffic and revenue or the potential of either.
(exceptions being when they see potential to resell the domain to end-user themselves.)

whereas end-users may not have those concerns, as their general interest is mainly the domain.


imo...

 

[Gerry]

Q. Strategies for selling $1mn+ names?
A. Own a $1mn name.

 

[INVIGOR]

Q. Strategies for selling $1mn+ names?
A. Own a $1mn name.

How many do you think is a "safe" number?

LOL!

 

[draggar]

What is the domain name so maybe we can discuss further?

My impression from the OP is that this is a hypothetical thread. The OP isn't asking about his domain, more or less if we owned one, how would we go about selling it.

Say you owned cars.com - how would you go about selling it? Would you just start contacting the CEOs or CIOs of Ford, Chrystler, Honda, Kia etc.. letting them know you own the domain and was looking to sell it?

Some people like to shy away from auction houses - some claim that only resellers partake in them which is not the fact - remember Cowboys.com? An actual attorney for the Dallas Cowboys bid on the domain (his winning bid was later recanted when he realized he was bidding 1/1000th of what the actual bid was) but this proves two points:

1) Yes "end users" do participate in some domain auctions.
2) Many end users, even large companies, don't realize the value of domains (the above mentioned had a top bid of what, $170,000 when he thought he was bidding $170??).

This can make it hard for them to put a price tag on a domain. Most would jump at the opprotunity to get a 30 second ad during the super bowl for $1M but wouldn't want to spend $1M on the same level of domains (like cars.com). Sure, the superbowl ad will view to millions of people but how many are looking to buy a car? At least with cars.com you get (and this is a pure guess) thousands of people a DAY going there AND looking for a car or cars (if it wasn't an established site - why else would they be going there?).

Education is the hardest point, especially in this economy. Companies are hoarding their pennies and very few still understand the potential AND benefit of a good (or even great) domain name.

I just want to recognize Focus for sharing some really valuable information here. This is the kind of thing that makes forums worthwhile! k:

Yes, Focus is one of the more educated members here and contributions like the one he did here (as well as several others!) make the forums well worth it (which is why, when I first joined, upgraded from platinum to exclusive within a month of joining).

I am working on my second Million.

I gave up on my first. :disappointed:

That's a great strategy!

How many do you think is a "safe" number?

LOL!

1 < n <= ∞

 

[accent]

I would think that, rather than having one of the few hundred "real" $1M domains, a seller could have a good name and just be hard-nosed when a corp comes calling. Not quite that level, but I think Sedo.com sold for $600 K because the owner refused to sell for less. Zune went for $500 K, as I remember. Brass Gonads required to turn down hundreds of thousands of dollars in earlier offers, for sure. When you compare the advertising budgets of major businesses with the cost of key domains it is obvious that the domain market has a lot of room to grow. Million dollar sales should become very common in the future, IMHO.

 

[brian1234]

Say you owned cars.com - how would you go about selling it? Would you just start contacting the CEOs or CIOs of Ford, Chrystler, Honda, Kia etc.. letting them know you own the domain and was looking to sell it?

Good post Draggar. So lets say a person did own a domain of cars.com's calibre AND you wanted out of 'domaining' and you set yourself a target of 6-12 months in which to sell it...

List all the things you would do!..

 

[Focus]

The real question here that maybe some people are missing is how to reasonably arrive at the million dollar valuation to begin with so that you maybe have somewhat of a reasonable price expectation going in and don't waste your time and the time of many others trying to sell what you THINK is a million dollar domain. How does one arrive at that valuation? My math tells me traffic/revenue - and, or the clear potential to produce it regardless of how (be it via direct online sales, branding/advertising of a product, ppc income) I have owned at least one domain that was genuinely worth around 1 million and trust me they are FAR and FEW between. It really does take solid brass ones to turn down large offers in the xxx,xxx range on a domain but when you start having that "problem" then you can be much more assured of your domain name's potential valuation/sale price in the possible million dollar persuasion. When you have these so called million dollar domains the strategy is normally trying to deal with all the constant interest & offers coming in not going out and having to really seek them to make a sale. The sales come to you and the price can be whatever you end up settling on. Powerful feeling to have people begging to pay you xxx,xxx for a domain name. It's even more fun when you paid $xxx or $xxxx for it.

So, that being said..if we are just appointing names to have this said value then I have a whole moniker account full of "million dollar" domains..what can I do now to sell them for a million each?

 

[ok10]

Good post Draggar. So lets say a person did own a domain of cars.com's calibre AND you wanted out of 'domaining' and you set yourself a target of 6-12 months in which to sell it...
List all the things you would do!..

If you have to sell withing a year, then you will probably only get pennies on a dollar. You will probably have to wait at least 5 more years to get end user price. End user interest is just starting to pick pick up over the past 1-2 years.

With cars.com I would contact all large classifieds and related sites like Ebay, craigslist, hotels.com, and smaller players like atv.com. All these companies already understand how to make money with internet classifieds-related sites, so starting cars.com may interest them.

I think another good idea is take payments for domain over 10 years or so. $500K over 10 years is a lot more affordable than $5 million up front.

If the domain fits specific industry, then another good option is to attend industry trade show. Sales-people there will tell you who the right person to contact in their company.

 

[spanno]

if I had a million dollar domain name I'd let a broker who knows what they are doing handle it rather than trying to save myself commision asking in forums what I should do

 

[ok10]

if I had a million dollar domain name I'd let a broker who knows what they are doing handle it rather than trying to save myself commision asking in forums what I should do

There are no such mythical brokers. Domain brokers can only get you liquidation price - and 8 years revenue or 25 years revenue are both liquidation prices for a real top domain.

 

[alanj878]

Hey everyone If i was sellling the domain based on its traffic and rev and had the company pay for it over ten years I think that is a said choice.Since if you are pulling 10k a month without doing anything i think it is a waste of time selling the domain. If I had a domain worth 10 million i would never sell it i would develope it and let it pay for itself and say if this was a parking 10k if I finely optimize I think I could get it up to 100k a month and I dont no one would pay my 100 million price tag

 

[DNBA]

There are no such mythical brokers. Domain brokers can only get you liquidation price - and 8 years revenue or 25 years revenue are both liquidation prices for a real top domain.

Yeah i dont think so. A broker usually has relationships with clients that are buyers or does his work to find you an end user. Buying domains based on 25 years revenue is just plain stupid. The bottom line is revenue changes, Technology changes, search engine algorithms change, parking companies change, the keyword itself (based on a trend) and other variables will more likely change your income in the next 5 years. If it was like rent and you leased the domain then, you can base the price on the SET income that it makes. Otherwise its like playing craps everyday.

Also a broker has other responsibilities with the transaction. For instance help a client with the escrow transaction and assist with the due diligence process.

 

[brian1234]

if I had a million dollar domain name I'd let a broker who knows what they are doing handle it rather than trying to save myself commision asking in forums what I should do

Don't worry, I doubt there'd ever be a time where you would be in the position of asking this question, but I do appreciate your advice. I'm simply looking to cover all bases, with suggestions from people who have either been in this position themselves, or those who haven't but who still have a creative mind...

:smilewinkgrin:

The real question here that maybe some people are missing is how to reasonably arrive at the million dollar valuation to begin with so that you maybe have somewhat of a reasonable price expectation going in and don't waste your time and the time of many others trying to sell what you THINK is a million dollar domain.

I agree with everything you say Focus. Of course, it's important to separate 'domain' from 'domain that has been developed in to a business', because the two are very different things.

So, in the example of domain-only, there are really only two value types: traffic/revenue domains and branding/perception names. Traffic/revenue names have an established multiple, and in that sense are more akin to a business sale.

Branding names, arguably, require more of a 'leap of faith' but at the million dollar level these domains should provide the prospective purchaser with many millions of dollars worth of quantifiable and real value.

Can we talk about the strategies for both?



..and does anyone have an opinion on whether BUSINESS DEVELOPMENT contacts at a firm are better, or more appropriate, than CEO contacts?

 

[Focus]

PM me the domain and I literally might know a buyer for it toady if it's that good.

 

[spanno]

There are no such mythical brokers. Domain brokers can only get you liquidation price - and 8 years revenue or 25 years revenue are both liquidation prices for a real top domain.

yea not those type of people I mean a real company like Sedo or something who can put it into a high profile reserve auction and promote it