This is part 5 in Domain Name Wire’s “Selling Domains 101” series.
If former carpet salesman Roy Edward Messer would have sold his domain name Vodka.com to another domain name investor, how much would it have sold for? Surely it wouldn’t have been as much as Cameras.com, which sold at auction last year for $1.5M. Any domain name buyer would hedge his bets on a domain related to an expensive electronics item with high pay-per-click prices than on an alcholic drink with low pay-per-click prices.
In fact, Messer would have been lucky to score close to seven figures for his premium domain.
But Messer didn’t sell his domain to other domain name investors. Instead, he went straight to an end user: Russian Standard Vodka. Russian Standard didn’t care about click prices for the term “vodka”. It cared about establishing itself as a major player in North America. The company paid dearly — $3M — but it was worth it.
Therein lies the holy grail of domain name sales — selling a domain to an end user. You can define an end user in the domain name market as a company that will use a domain to brand its company or advertise its existing services (as compared to someone who will just use it as a parked page or micro site). Most end users value a domain much higher than domain investors who hope to flip the domain within a short period of time.
But getting to end users is difficult and often requires snagging the attention of someone at a Fortune 500 company. Sometimes the best way to approach end users is through a broker who has contacts in the industry. (Moniker had success going after end-users in the adult market with its recent Internext auction in Las Vegas. However, there are few methods this easy for selling to end users.)
If you want to try end user sales yourself, here’s my recommend approach:
1. Determine the end users for your domain. It may be silly to list this as the first step, but it’s critical. Let’s say your domain is related to office supplies. End users will be large companies like Staples (NASDAQ: SPLS) and Office Depot (NYSE: ODP), as well as smaller office supply companies, manufacturers, and wholesalers.
2. Compile a list of the best contacts at each of these companies. You’re usually looking for a senior person in the e-commerce, strategy, or intellectual property departments. If you have trouble finding contact information try a search at Jigsaw.
3. Place phone calls/send e-mails/send snail mail to each contact explaining the value proposition of buying your domain.
I know it seems like a laborious process, which is why few people attempt end user sales. Some day these end users will warm up to the value of generic domains and the market will become more efficient. Until then domain owners will have to take the initiative. The good news is the payoff for your initiative might be very grand.
Adam says
It’s my understanding that Roy Messer didn’t approach the buyer of Vodka.com but the other way around. This is the best situation,: where the buyer comes to you, not the other way around. Vodka.com was a very unique situation and one that I doubt can be repeated by cold-calling a list of prospective suitors for a domain.
From my experiences approaching an end user buyer is likely to get you the worst offers you’ve ever seen and if you have a sticker price on your domain, it’s likely to get you many laughs in reply emails or phone calls.
However, I think if you have mid-grade domains (like under $5k price range) or domains that better suit a company, you can do well approaching end users. Say for example you call a company with the domain InfinityWirelessWisconsin.com and you own InfinityWireless. You are likely to get a buyer if your price is fair.