What makes a domain sellable, part 3
May 14, 2008 by Rick Latona
For part three of this installment let’s use a phrase that I hear so often in business circles. Does it have legs?
For those of you that have English as your second language, you probably haven’t heard this phrase very often. It means that when your site is up and running, it’ll keep on running further and further. It implies that it can continue to get bigger and more profitable as time goes on.
Recently I sold sanssouci.com for only $3900. I had originally thought it would do more. It’s a suburb of Sydney, French for “carefree” and the palace of Frederick the Great near Berlin. I’ve actually been there. Crazy dude wanted Roman ruins in his backyard so he went and built his own. Funny thing is that now those fake ruins are antiques because it was so long ago. Anyway, back on topic, the name doesn’t have any legs. I should have known better. That’s why I didn’t really make anything on it. How much can you make off such a name if you owned it? I ended up selling it for its true market value.
SkiResorts.com on the other hand I sold (via Moniker to give credit where credit is due) for $850,000. Just think. If you charged various resorts $10,000 a year to be listed on the site you would only need 100 customers to do $1,000,000 dollars in revenue per year! This goes back to my first post in this series which was about “the obvious use of the name“.
A friend of mine runs Divorce.com. Any rookie domainer would agree that is a great name but how great is it? Well, how many divorce lawyers are out there which might pay 1000 a year to be listed? My guess is greater than 3,000 could be talked into signing up. That would be 3 million a year in revenue! That my friend, is legs.
So now that we have looked at the obvious use of the name and its emotional curb appeal, make sure that you can accurately guage how big the oportunity could be. How long those legs really are. Don’t fool yourself either. I’m sure those 3,000 divorce lawyers are only a fraction of the 10,000 or more divorce lawyers out there practicing law. I’m equally sure that it would be hard to get more than 1000 dollars for them to list.
Be realistic.
Hi Rick:
First off, those are beautiful legs you have up there. Who is that damsel by the way? I would like to know her if you don’t mind…ah! Back to the point, you touch very important points. I can see this has nothing to do with parked names, “up and running” means the development cannot be over emphasized. When you talk about charging 1000 - 10,000K for listings, that is serious monetization in addition to PPC. For rookie sake, I would like you to elaborate (in the near future) how to get clients listed for “leggy names.”
On the other hand, I disagree with you on ESL folks; English is not my first language, but I know about the phrase “have legs” even before I take a leap across the Atlantic Ocean - into United States. You might be amazed at what jargons (some very observant) immigrants know. So, beware.
Another great post.
You make a great point - it appears to me that you have apositive LONG Term focus when it comes to Business (good for you).
Great post - this post is a MUST read for any Business person
I try to take a percentage approach… If I can get a 20 percent return or whatever number I’ll buy a name…10 percent puts me closer to just reinvesting in my other business
Hi Rick,
You and I emailed over my name http://www.retainedsearchfirms.com. After reading your last post, I thought I would comment.
There are over 10,000 retained search firms globally. The top firms have revenues in the $800 million range. The smaller firms need to have at least $3 million per year to keep thier office open(according to stats). At 5% per year which is the average amount companies spend on advertising, even the small firms will pay out $150k each year in advertising, of which, they can afford $1k-10K per year to list.
As your post suggest, just think if you could get 5% of the market - 500 advertisers, at $5k-$10k per year, you have a $2.5 - $5 million company…or if you got 1% of the market - 100 advertisers at $5k-$10k per year, you have a 500k-$1mm company…
Do I have blinders on since I work in the retained search biz or can this name have legs??
Thanks, you rule!!
“Retained Search Firms” is such an industry specific term, I’m not sure how many people outside of HR departments would know what it even means. Perhaps It does have value. I couldn’t see it because I don’t know anything about them. I don’t buy names I don’t understand. Perhaps you should develop it. Get a few customers and you’ll have a much easier time selling it for a decent amount.
I agree with rick because at first i was wondering why all the names I have never get no where but now that i think about it, the reason is because the names isn’t profitable and has no legs to stand on so i appreciate you explaining what makes a great domain. Maybe i can finally hit a home run with one instead of striking out
Rick, great point about domains “having legs”. That’s something everyone should consider when buying/selling or developing domains.
- Richard
Dan,
I’m with Rick - “retained search firms” is too specific imo. Also - saying things like “if you could get just 5% of the market” is easy to say but hard to do…
This post is very true. This is something I have had to learn on my own the hardway. Hopefully this will save the next guy from going through the samething,
[...] bottom line is that domains with revenue that have legs, are exciting and have obvious uses are very damn sellable. Everything else is slightly less [...]
[...] Part 3 - Does it have legs? [...]
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