Earlier this year the company I work for (Domain Holdings) was acquired by the company Flippa, a digital asset marketplace. The reason behind the acquisition was so that we could complement each other’s strengths and weaknesses.
Here’s how this was able to help facilitate the sale of Mineral.com.
The advantage of a marketplace lies largely in the volume of their user base. Marketplace users are actively looking to buy and sell domain names. In short, marketplaces carry a surplus of capital. Domain name marketplaces also make use of something else very valuable. Transparency.
Transparency allows a wide array of people to simultaneously see a domain is available for sale. This can invoke competitive bidding and offers where there might otherwise be less or even none.
I spoke with Monte Cahn at the Domain Conference in Ft. Lauderdale and took a page out of his playbook. We set the domain at a $1 reserve. In short, no matter what happened this domain would sell.
This may seem incredibly risky. However, as Monte explained, this strategy engages the highest number of potential buyers. After a further analysis I feel there are a few things that need to be taken into consideration when pursuing this strategy for your own domains:
Volume of Users
Marketplaces are such a powerful thing. A bulk of their existence is based on having a large number of users, newsletter subscribers, etc. It wouldn’t make any sense to list a domain with a $1 reserve to only 3 active users.
Every domain is unique and its value will correspond to its uniqueness. Listing a domain that is primarily bought and sold on liquidity principles such as say, ABCDEFGHIJKL.com would have the best luck with being seen by users that primarily buy and sell similar liquid type domains. Now there are a lot of exceptions to this and a lot of the same users scour every major platform.
Flippa is unique in the fact that they not only have the typical domain user but also those that buy and sell mobile apps and websites. In short, they cover every corner.
You can be incredibly due diligent with the prior two. However, if your domain is not properly promoted then you will not maximize the return on your investment.
Pick the Right Team
At the end of the day even though we’re behind a sea of ones and zeros, we’re people. Working with the right person with the right knowledge, insight, with an understanding of domain valuation and divestment strategy is crucial to guide you in the right direction.
The prior Owner of this domain used words that resonated rather strongly with me. He came to me and told me he wanted to liquidate this asset to invest the money elsewhere. I explained the above to him and he said, “I trust you. Let’s do it.” I can’t speak for everyone but when someone puts their trust in me I’d rather die than not perform at 110%.
A little Extra Umph
When selling this domain we made use of the resources from both companies, Social Media, Newsletters, Front Page listings, User Base, prior clients etc. In addition to this, I worked the End User channel. I was actively reaching out to end users informing them that this domain was for sale; and was guaranteed to sell at the end of the auction.
The Seller wanted to liquidate this domain for the maximum amount of money that he could. Through the culminated efforts of two companies we made that a reality. I look forward to many more successful transactions in the future.