“If I Owned that Domain Name I Could Make Millions.”

Morning Folks!!


Let's start at the other end of the spectrum and work backwards. Starting at the finish. So you get contacted by the end user. This is what he is thinking:


'You're not doing anything with that domain.' followed by 'If I owned that Domain Name I could make millions.'


Aren't those the words/thoughts of a person or entity looking at your domain name? That is their starting point. Recognize it and the big job to sway them to reality. We all want to hook up with someone that would look at a domain name you own and say 'If I owned that Domain Name I could make millions.' But don't ignore the other thought in their mind. That's YOUR starting point.


Chances are they don't have millions to invest in their idea. But they do have $1000/month, $2000/month, $5000/month, $25,000/month and more depending on the domain name, the audience and the traffic a domain gets. And yes, it IS about traffic. If your domain is getting 20 visitors a day it is likely more than many physical stores get depending on what they do and where they are located. I know. I have worked retail and I know the value of a customer walking in the door. No sale, no eat!!


When you see the world through my eyes and through a prism with a 20 year bridge, it is clear as day where we are going. We have headed in this direction for many years. Almost decades! Nothing has changed except the fact that what would have been thought of as a joke then is a real business today.


Look, I am not the first to lease domain names. (Maybe I am. 1996 anyone?) But I saw the future back then and everything that has happened since then has simply been a foundation that has gotten stronger and broader and more important. Many ideas and domain owners have come and gone but this idea has survived throughout the ups and downs and there are many active domain leases right now. Perhaps thousands.


We are humans ruled by nature but somehow we are wired in different ways. Some folks make $35,000/year and are perfectly content. $50,000/year and are perfectly content. $100,000/year and are perfectly content. $250,000/year and are perfectly content. $500,000/year and are perfectly content. $1MM/year and are perfectly content. $2MM/year and are perfectly content. $5,000,000/year and are perfectly content. $10,000,000/year and are perfectly content. $25,000,000/year and are perfectly content. $100MM, $250MM/year and are perfectly content. Some are never content. Point is we all have our comfort level and to be frank the lower tier is not going to work. The passion may be missing. Maybe not. But passion is a key element.


So it becomes obvious who your target is. The perfect match.The highest and best use. The best partner. The right partner. A BIG Vision as opposed to a limited one.


Have we ever talked about domains as being a 'Strategic Asset'? Because it sure as day is. Folks find that out the day after their competition gets the category defining domain names and has the potential to be trans-formative. That is the day the strategic asset in your hands is a world better than an asset that can destroy you in the hands of a competitor. And it can.


Line up the comparisons, not only will the category defining .com be competitive, it will surpass many of the old standards in sector after sector. There is an infinite amount of domain names. However, there are a finite group of category defining domain names that generally come with traffic, visitors, buyers.


I look at leasing a domain name as I would running an ad in a magazine or newspaper. At the end of the year you evaluate and see if the ad made you money. If it did you will renew and maybe expand the ad. If it does not work, you might dig a bit deeper and see exactly who are the new customers and see if it will pay for itself down the road. They make a decision on that. When I ran hundreds of monthly ads I just wanted to break even. Because if I was breaking even I was making good money on what I could not track and the business still to come. If you run a Superbowl ad, spend $1MM and can track in the first 30 days a break even point, I think you can rest assured there is still more money to be made from that ad. The gravy. The profit. The new customers. The repeat business. The lifetime value of each new customer. etc. It's a winner!


But when you only see a spreadsheet you only see the numbers that already happened. You need more dimensions to evaluate. Those that do understand. Those that don't will argue the point. But it is meaningless. The picture is much bigger and the end game is to plan decades into the future or your competition will win.


Each visitor to your site is a real human being and they should be treated at least as well as somebody on the phone if not standing in front of you. No business owner in their right mind would let 1000 customers walk in and out the door without buying something and not ask WHY???? Yet every day on the Internet that is exactly what business owners do. Since they are invisible, they treat them that way. And we are talking about 95% of every site out there. So there is HUGE room for growth and understanding.


A domain name can be the Main Entrance or a side door. It does not matter the use. Customers are there now with the only door being Google. You pay $6/click for our traffic and we get 6 cents. Seems to me we have a common interest here. You want to pay less than $6 and I am sick of the 6 cents.


I look at things from the viewpoint of an end user because that is how I came to be online to begin with. As an end user. As a retailer and as a wholesaler. I did it in different mediums over different decades in literally dozens upon dozens of industries. All different industries and all with threads that were exactly the same.


There is something intuitive and memorable about a vanity 800 number or a domain name with type in traffic. It just makes it easier for others to remember, to tell others, to help you market to places and people you could never get to. And word of mouth is still the most powerful, valuable and least expensive ad tool known to man.


This post is not about leasing domains, it is about unlocking sales. Sales. The thing that pays bills. The thing that actually makes a brand and branding possible. The thing so many on the Internet REFUSE to see and understand and focus on. BUT THEY WILL! And that is why I can be so certain exactly where this train is going because I know and understand the goal. Sales! When business comes to understand that they have to rethink things and come to different decisions. I can't chase them or even convince them. (tho I try with posts like this) Too much work. So I sit on the beach knowing they are looking for this specific beach. 'Sales Beach'. And when they arrive on 'Sales Beach' as they are beginning to now, everything falls into place. Piña colada anyone?


Have a GREAT day!
Rick Schwartz




20 thoughts on ““If I Owned that Domain Name I Could Make Millions.”

  1. Kobe Green

    Rick, congratulations. You went through a whole post without mentioning JointVentures.com!
    Since I don’t have any”category defining” domains like you, I’ve developed a more traditional model for my domain holdings. Basically, build up my domains to garner suitable traffic (T.R.A.F.F.I.C???) and then charge for advertising.
    Alas and again, we do live in exciting times and I am gonna be in the bleacher seats and watch your experiment unfold. I hope you score because when a domainer wins, we all win.

    Reply
  2. TLD

    If I were a company I would not be a fan of leasing a domain name. Yes, I can lease a premium property, but all the work I put in to develop that domain name into a recognized brand, all the SEO work, all the design work around that brand, all of that value created is really owned by the domain owner and not the company.
    I’d be afraid when the lease is up the domain owner is going to jack up the monthly price as a result of the value that I had built. And if I don’t want to pay it then all that value gets left behind with the domain owner.
    A lease with the option to buy is something I think companies would consider, but not sure how many large companies would be happy to just lease a domain name.

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  3. Kobe Green

    Actually I hardly work at all. Thanks to domaining. My office is wherever there is an internet connection. And now with my smartphone, my office is virtually everywhere.
    I’ve made I value deals McDonald’s off of the interstate many times.
    It’s good to be”king” even if I am not a”domain king” like some.
    I really feel sorry for those that still put in their 9-5 each day and hope to retire when they’re 65 to collection their pensions and social security.
    It takes a particular mindset to say,”NO!”, I will no longer be a cog in a system. To break out. I retire young. I live a life many dream of.
    Pass the pina colada!

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  4. Kobe Green

    TLD, we are of the same mindset on this. If I were a company looking to get on the internets, it is not very desirable from a business standpoint to lease.
    Sure, certain domain owners may only be willing to lease and not sell, but here’s the thing…I’ll just shop somewhere else. There are literally domains up the whaazookaa up for sale on Sedo and Godaddy and 20 other places. High value”category defining” domains too.
    At the end of the day, it’s not wise to lease when you can buy. And if you have money, you can get some good to great domains.
    I paid a 5 figure sum for a domain last month that is worth 7 figures. But the buyer needed quick cash and I had quick cash so…SOLD! Literally within days of the say, I started getting unsolicited offers coming in for the domain. That’s how you know you’ve got a hot potato on your hands.
    Cheers!

    Reply
  5. Joao

    I am very happy for you. I hope to never retire because for me that means to die. But i hope to have the proper retirement cash while i am still young. Thats just me.
    Saying”no” nowadays is harder, but it is still a choice. Each of us have our own realm. In our realm we can do whatever we want. Why dont you want to have a category killer domain in your realm?
    Thats the thing i dont get.

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  6. Steve

    These were my thoughts exactly. Without a clear option to buy it would be foolish to put any real work into the domain.
    But then I started to think about how some businesses don’t really care about branding and just want to use the domain for the authority value, like for example to just make it a landing page and collect emails.
    If you can’t or decide not to renew the lease you still have your email list and you didn’t dump much money into the site.
    But besides collecting emails I can’t think of any other way it would make sense

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  7. Kobe Green

    Look at it this way. Say you are in the cupcake business.
    Certainly, you’d want CUPCAKES.COM. But lo and behold, it’s taken and only available for lease. However, CUPCAKES2GO.COM is for sale at an attractive price.
    What’s your decision? I don’t know about you, but it’s not even a decision for me. I would rather BUY cupcakes2go.com even if it’s a less desirable domain. At least I would own it free and clear (very important in business) and any blood sweat and tears I pour into developing the”cupcakes 2 go” brand would all be mine and mine alone.
    Repeat that model with all the”category defining” domains out there. For every one of them, there are 20 other facsimiles of them that you can buy outright and enjoy the”pride of ownership” that you can’t and will never get with leasing.
    This is not in any way a dig at those that own these”category defining” domains (Rick and friends). Kudos to them for having the foresight to enter the domain game while everyone were still asleep at the wheel, but from the perspective of a business or business owner, I don’t see how the leasing model works.

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  8. Rick Schwartz

    Kobe, you get BOTH domains and use one to brand the other.
    Remember, cupcakes.com is coming with pre-qualified customers each and every day.
    The model IS working and it is working on some of the biggest and best domains on the Internet and not just mine. Been working for a long time and like I have said, just parallels leasing in Times Square. You don’t own the real estate there either unless you have the foresight to see how it would unfold back in the 90′s or the 70′s or the 50′s.

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  9. UFO

    Lets see, you can have cupcakes.com for 2k a month leased, or you can have cupcakes2go.com for 8.99 USD per year.
    The way I’d see it, I’d go for the cheap domain name and simply bank the savings of the lease or put it into marketing that would bring in more than the natural traffic of cupcakes.com.
    Traffic also comes with content. Content is king.
    Would only lease the best of the best and even with a clause that a final bullet payment would achieve ownership. (Could be a good play with start ups that are hoping to go to market and when it does the domain owner gets his/her bumper payout)

    Reply
  10. Rick Schwartz

    And let’s say you can pay off the $2k with one weeks worth of profits while the $8.99 guy is waiting for his first visitor and first sale? So you have to ask more questions before coming to a conclusion.

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  11. UFO

    That’s possibly true. But that’s not necessarily a function of and attributable to the domain name.
    Asking more questions wouldn’t be of any consequence because the buyer would likely be the most knowledgeable about the industry s/he is buying for.
    Like I’ve said, if I had 2k a month for cupcakes roll out then I’d spend it on content, as content is king, it’s what brings the traffic. If then I grew the business to a reasonable scale and I thought incrementally 24k Pa could add to the business on a sufficient payback AND I was confident there was some mechanism to acquire the domain at some point (Rather than building a competitor) then I’d look further into it.
    Most domains suited to leasing are the big plays >250k. Cupcakes isn’t one of those.
    Nb: I did have a discussion with a seller some years back that wanted to lease the domain I was interested in. My answer was no deal, because in reality I don’t want a ‘monkey on my back’. However if I was looking at property.com and wanted to get everything packaged to send to market, then leasing with a final bullet payment ownership would look very appealing.

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  12. Kassey

    I agree investing in a leased domain is quite risky because you don’t own it. However, if the leased domain does provide desirable traffic, how about paying purely for the traffic? In other words, just redirect visitors of the leased domain to an appropriate page on your own website. For example, say you are selling shoes. Lease RunningShoes.com and redirect its visitors to your shoe website. Just pay a lease price appropriate to the sale you can close from this traffic. Zero site development on leased domain.

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  13. UFO

    Because that would invalidate the whole concept of leased domains. That would be the dog chasing its tail. Few leased domains would be worth the leasing amount per month in pure traffic. The concept of leased domains is having the ideal domain without paying the up front capital cost.
    This is where the crux of the matter is, no smart business owner is going to build the profile of a URL without some recourse to long term ownership. In this context a URL is different to a leased shop because the URL is the brand, a redirect of a URL (I.e. the footfall traffic) is a closer approximation to a lease on a shop.

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  14. craig

    Some, I think are missing the point…sure it’s better to own your”ideal” domain, but……most simply don’t have the bucks.
    So, leasing allows them to compete AS IF THEY DID OWN IT!
    This way, they build their market, trust, authority, and make money on the journey.
    Where they go next is a decision between them and the domain owner.
    BUT – they would then be in a much stronger market and financial position than they would have been otherwise.
    This sounds nuts, but the bus companies I worked for even leased the tires!

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  15. Max

    I think 20%-30% of small businesses that have closed in the last 10 years would still be active if they had acted as innovators, using internet as innovators, as an entrepreneur should always do.
    Unfortunately, the lease was not systemic in domain industry (and it is not even now).
    So again, domainers: go to offering FOR LEASE ALL your best domains please!

    Reply
  16. Jeff

    The missing puzzle for me has been that wow factor this year. What I mean by wow is seeing all the type in traffic domains I have acquired and that pure type type in traffic. Its actually more rewarding to see my numbers from January to now.
    I have had one domain sale this month. Sucks and frustrated actually. But its going be a record month in my numbers and ppc income. Its like climbing up the mountain. There has been 3 steps for me this year. One was climbing the mountain in sales. Mini Victory for me and doubled. The other part of the climbing up the mountain was building up type in traffic portfolio and commercial use of that generic domain name. Earnings gone up 6 fold since January. The 3rd step was a door had shut and another door opened up. Sometimes you need to say I don’t give a fuck and keep focused. Focus on your own portfolio. Fuck the noise I call it.
    The domain industry is a wild space and all I can say is fuck the noise. Focus on your own missions. Focus on your own goals. Fuck the non sense. Don’t worry about Rick and anyone who is betting against Rick will fail and history will prove it. JointVentures.com may not be the best looking site around. Guess what palmSprings.com and many others are not neither. But it gets the job done and millions be made.
    You either like Rick or don’t. I get that. I think many people should read between the lines of what Rick is saying if you don’t care for him. Read every post here. Re read it. Rick, a couple of other close friends of mine has lead me to a journey that I am thankful for and my mentor. I am thankful for many things. I make mistakes. I fail. I learn. I call this ABL. Always Be Learning. And this leasing is something everyone should consider. But Rick and the older domainers have that traffic and the million dollar domains. I think this can be a good testing on a smaller scale and for the common domainer. Lets say a domain has 100 type in a month and makes 4 dollars. How about leasing that traffic for say 50 a month. Pre pay for 12 months for 30 a month. Thats 340 a month of cashflow. Rinse and repeat. I would be very happy on that front and have 10 deals like this going ranging from 30 to 100 a month.
    People who doubt Rick will be wrong again. Simple as that and thanks Rick for the posts you done. Some of us do appreciate what you stand for and done for the domain industry. First one to get domain values up. First to come out swinging against Saveme and keeping our .com values holding up with traffic.
    Have a great Thanksgiving everyone! Be safe. Enjoy the time off the computer.
    A small domainer who is ABL Always Be Learning and ABC. Always Be Closing. You win some. You fail some.
    Cheers

    Reply
  17. Michael

    I have a friend that has a home magazine company, just all home ads and it goes out to 50000 homes a month. $500 to $2000 a month to advertise in this magazine and you will get 20-60 calls a month.
    I built a website for a tree service 125 visits a month, 30 calls a month Google traffic. $0 a month in advertising, $0 a year, $0 forever!
    If you build a website on cupcakes.com vs cupcakes2go.com, Google will give most of the search traffic to cupcakes.com plus the traffic to a working site will increase very fast. Say 50000 people type in”cupcakes” no one types in”cupcakes 2 go” and that is a different type of traffic, that is search engine traffic and its bigger then direct traffic and free. That is what you are leasing and will not get from cupcakes2go.com!
    I look at my domains like they are houses and I rather rent out my houses then sell then and have money coming in forever.

    Reply
  18. Brian Bilotte

    I never heard of domain leasing till around 2006. I thought of it as a more targeted form of media buying and a win-win for both parties. Even more so today with Google’s Penguin and Panda updates wiping out some people’s entire business model. You just have to realize how to keep the domain traffic separate from your SEO efforts for long-term success and you’re golden. (Unfortunately I didn’t have the domain names or the money to get going at that point!)

    Reply
  19. Jeff Schneider

    Hi Danny & Rick
    There are literally dozens of Value Metrics in evaluating the overall Marketing Strategy Value of any Domain Foundation. Of course this depends on the emotions that the letters in your name elicit. It makes no Business sense to sell a Domain Foundation based on the narrow Metrics that are measured in the current Market Place.
    Prime Domain Foundations are currently the conduit for Trillions of Revenue Dollars. There are no limits to the actual value of some Domain Names. Those who scoff at the prices of some Virtual Business Foundations, just don’t know all the metrics involved in the End Users Mind.
    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

    Reply

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