$2 Million Dollar Sale ..
By Alan on Jul 3, 2010 in Domain Development
In only a few short years a $2 million dollar sale happens and changes you overnight. All the work put in was against your parents dreams to attain a higher education from some over rated and expensive school just to get a degree (in some entirely useless subject such as foreign art or gymnasium techniques) but you made more money now than they probably collectively did in their lifetime – all in just a few short years.
You see – that’s the power of the internet and a good domain name.
Sure, you could buy a domain for $200 and flip it for $2,000 the next week but the success is short lived and generally only fuels your fire to keep flipping domains.
However when can you start avoiding the idiosyncrasies of this industry and gamblers high from selling domain names to graduate to the point of this entire industry?
Some old school domainers will blog about traffic names but its sooo short sighted and only defines why the amount of information you can actually extract from some of these people is so limited.
Domain names are sort of like your piece of real estate in this world however very few domain names will ever bring in seven figures for a sale and I can guarantee 99% of people reading this do not own one. What you do own is a pipe dream with your triple hyphen .info.
What’s the $2 million sale?
Well, it’s not a pipe dream.
Very few people know me but those that do understand I have sold more names than probably anyone reading this blog (excluding Mike Mann of course) and have had my fair share of development success and even entered this business as an end user in the mortgage origination industry generating in excess of $100 million in mortgage loans. Granted, I also have a couple failed companies so its not always rosy but I do have the qualifications to give a teaspoon of advice in this industry.
Over the last year I have noticed more and more white noise across the domaining blogs and it’s become quite comical at best. You see – for the newbies – most people who comment on blogs really only have a couple sales, no development to speak of and little real knowledge of the domain industry. These facts are obvious by the blither of commentary across many of the popular blogs. Furthermore, some of the “popular” blogs are written by people as new as you – which sort of negates the whole “professional” viewpoint you need right?
(Obviously there are some great people who comment across the blogs like the Castello Brothers but the ratio seems to be about 100 to 1 for every qualified comment)
I’m not going to criticize anyone specifically as people enjoy one blog or another for reasons which are their own so all I want to do on this USA holiday weekend is simply show you what a $2 million sale looks like.
$750 a day.
Yep – that’s it.
You get a site up and running and enough content where traffic and net income is consistent within a $750 a day range and most likely you have $2 million in your pocket.
Why?
$750 a day income is equivalent to $273,750 in ANNUAL profit.
It’s easy to find a buyer for 7-10 years x income of almost any website generating consistent and verifiable revenue.
7 years revenue at $750 a day is $1,916,250.
Does $750 a day sound like a lot … sure and it is hard work however how about $375 a day – then you got a $1 million site.
$375 is 7 good mortgage leads a day
$375 is 7 good weight loss leads a day.
$375 is 15 good car insurance clicks a day.
You see … it’s not anything that’s impossible to reach. In fact, it’s easier to do than studying for your MCAT.
My advice – and probably my only post this summer is …
If you really want to make money in this industry long term do the following things:
First and Foremost
Filter out the white noise – stop subscribing to half the junk about domain names online and learn about what makes a good one. Do not try to find reasons why ALL domains sell for as much as they do because you only need ONE and almost EVERY domainer has a different theory on every sale. Many times, no theory at all since a large portion of sales only make sense to the buyer.
Secondly
Look at the authors qualifications. Many (not all but close) domain bloggers have never developed anything more than a mini-site. Some have simply paid other people to develop a site and still don’t have a clue about development so head over to the SEO and affiliate blogs once you secure your domain name. Hell, even start in the SEO and affiliate forums to learn what makes a good domain – many of those guys know more about domains than domainers …. Why, because they use them!!!!
Thirdly
Keep your small daily goal alive. The $300 or $500 a day is all you need to bank your million in a couple years. Sometimes thinking about a million dollars seems unimaginable and will beat you down before you ever get started.
A daily goal will make it seem easier and reachable for many of you.
And Finally…
Live life to the fullest – take calculated risks and only take advice from people you trust … not just because they have a fancy blog online. Life is too short – I have had a particular bad year with losing loved ones and having accidents or health problems happen to those very unexpectedly – do not think you will always have the time to do what you want to do so live your dream now. I know it sounds like a cliché but one day I promise you will heed the same advice to people.
Happy July 4th to the Americans but remember Europeans get a months holiday every year, paid maternity leave, free medical insurance, thinner women, better wine, stronger currency, real cappuccino (in a small cup NOT a bowl), secondary languages that are usually mandatory, cool clothes and more – so have your fireworks but when Tuesday comes you’re all back to work 
Ed - Michigan | Jul 3, 2010 | Reply
Well stated Alan.
Well stated.
Shane | Jul 3, 2010 | Reply
Let me put it another way. Turn your domain into a business. Create a revenue source that is secure and constant. You don’t need a domain to do this. People have been creating monthly revenue for thousands of years. The only difference is selling through another source that offers more customers and a different way of fulfillment. Secondly, not everyone in this industry is trying to make a living doing it. Most are just speculators trying to make some extra money. It doesn’t make it wrong, just different. Congratulations on your success but what you’ve attained will not reached by 99% of the people reading your blog. It’s nice to tell people to reach for the stars but it’s just as good advice to tell them to keep working 9 to 5, spend modestly, and save. Finally, the beautiful part of the Internet is the ability for all to have a voice. To say the voice doesn’t have merit or some value to someone is not correct, in my opinion. Sure they may not have the experience or background to give advice but all we have to do is not read them. I’m not going to waste my breath telling others what to read and what not to read. and I do enjoy your blog
PS I do 4 million a year in sales and have 40 employees and I’m amazed how little cash I have. Why? Because you’re always putting it into building a bigger business. You don’t make the big money until you sell and I’ve never been ready to let go.
mano | Jul 3, 2010 | Reply
Live life to the fullest ….and keep “tryin”
Alan | Jul 3, 2010 | Reply
Shane,
Well spoken – even if you’re lying about enjoying my blog
My entire viewpoint on domainers in general is geared towards the handful of people who want to do more than just a flip a name.
I would assume in your group of 40 employees there are probably only 2 or 3 that could run the business succesfully. Its quite likely the same or lower percentage in the domain industry (or any other in fact) for those domain owners who can make more out of a name than a parked page or mini-site.
Most people will always be employees but there are many great people who have the ability to be an employer yet sometimes don’t understand what filters to use because this industry is so small and still relatively quiet on the details of success.
I do agree with what you said especially “Sure they may not have the experience or background to give advice but all we have to do is not read them”
While this may apply to Howard Stern I think the domain industry is so small a lot of new people just think some domainers must know everything about the internet which is not true so understanding what to filter out is quite different than just having the choice to do so if you catch my drift. When the learning curve begins with trying to define who’s really an expert its kinda hard to even know where to begin.
Almost like assuming a mechanic knows how to race a car .. entirely 2 different occupations but the public wouldn’t ask a Mechanic how to race an F1 car would they?
On the other hand, a newbie will probably ask anyone with a domain blog for SEO advice
Entirely 2 different occupations but in this industry its ok to ask since the assumption its an all-in-one expert is there.
I have no desire to tell people what blogs to read either but its worth anybodies time to dig out of the domaining blog world if they want to learn more about SEO and Web Design.
$4 million in sales and little cash – I think anyone that has a real business can agree there.
JS | Jul 3, 2010 | Reply
Alan,
What affiliate service do you use for the mortgage, weight loss, and car insurance leads?
Alan | Jul 3, 2010 | Reply
JS,
just emailed you.
Aron - XF.com | Jul 3, 2010 | Reply
“What affiliate service do you use for the mortgage, weight loss, and car insurance leads?”
Would also like to know this, in addition to other categories.
Francois | Jul 4, 2010 | Reply
You rocks Alan!
Charley | Jul 4, 2010 | Reply
I would be interested in hearing the insurance afiliate as well.
michael berkens | Jul 4, 2010 | Reply
Alan
Great post, well said and great advice.
Simon | Jul 4, 2010 | Reply
Great article, and very on the money,
Id love to interview you for http://www.thedomaindashboard.com
And the new info guide were producing http://www.starttradingdomains.com
The website side of the business is very misunderstood and we try and help at http://www.webryrant.com
I have a banking background http://www.simonhedley.com and its rare to see people that get the valuation of domains right.
Thanks for helping make it clearer and I look forward to helping and watch this Market mature.
Rgds
Simon
Psi Pi Group
http://www.psipi.com
Eric Borgos | Jul 4, 2010 | Reply
Shane – Yes, I agree with you about never having any extra money. You can read my blog posting about that topic, about how I sold Bored.com for $4.5 million at http://www.impulsecorp.com/the-psychology-of-a-multi-million-dollar-sale . It took over 10 years before I was ready to sell, and I mainly sold because I had no money in the bank.
lee m | Jul 4, 2010 | Reply
Hi.. Good article and I fully agree on developing rather than just trying to sell a domain..
A question.. I have a website which has been my baby for 6 years, and has consistantly delivered between $300 and $500 a day for the last 3 or 4 years..
How and where would I go to begin selling my site? I have looked at many places online but always seem to come across dodgy brokers or flipping sites (flippa etc).. this is a proper established data site with solid revenue and high profit margin. I don’t think auction would be the way to go..
Any pointers greatly appreciated
Lee
Anthony | Jul 4, 2010 | Reply
Alan,
Kindly email me the affiliate programs
you use. Thanks
byDomainers | Jul 4, 2010 | Reply
Personally I prefer to develop my domain portfolio, rather than selling it as is.
I have sold some domains via Sedo’s auction[ last sales: Anniversaires.Tv] for 100EUR.:(
Brian Null | Jul 4, 2010 | Reply
certainly some good insight, i’m particularly fond of your third point… keeping your eyes on making that daily dollar goal… helps with focus and the hope/belief
Rob Monster - Epik | Jul 4, 2010 | Reply
Could not agree more. Alan nailed it and speaks truth. The valuation of a model for a BUSINESS is a multiple of future revenues that are (1) defendable/growable, and (2) profitable.
Check out this post for a tool where you can use traffic data to value your developed website:
http://www.epik.com/blog/how-to-value-a-website-with-traffic.html
End-client CFOs have found this tool useful when justifying valuations for future revenues. Feel free to use the XLS that is linked from the post.
domain report | Jul 4, 2010 | Reply
Nice, simple advice, I enjoyed reading your post. You’re right, all you need is one domain with a good business to succeed. The problem for many domainers is the ‘addictive’ side, looking for and acquiring the next good looking domain, and planning to develop later one day once they have built a portfolio. Only it never seems to happen. I am no expert to be sure, but the advice I usually give to people getting into domains is to learn how to build a website, choose a topic that interests you, and build on that. If it interests you, you are less likely to quit and more likely to build something good. I still have yet to fully follow this advice myself though!
Europe does have it’s charms, but your last comment about the months of holiday and other excesses made me think that’s partly how countries like Greece and Spain are in so much trouble.
Alan | Jul 4, 2010 | Reply
Alan,
Enjoyed your article but your comments about “enjoying the 4th of July” were way off base and downright rude. All it implies is the fact that Europe is more socialist than the US and that Europe is in someway more superior than the US. I’m not going to get into a discussion about American vs European history but remember it was the US that marketed the first pc, created the worldwide internet and marketed the software that made it all possible. You sound like a typical arrogant stereo-typed European………………Why don’t you get a small American flag and make your way to an American military cemetary(Europe is full of them) and and give thanks to the men and woman from this country who made your freedom, along with millions of others possible
Alan | Jul 4, 2010 | Reply
Alan – if thats your real name .. please.
The great thing about a free country is freedom of speech. I know very well about the sacrifice people give in this country .. my cousin – a Police Officer in Tampa – was shot and killed last year in the line of duty
You sound like someone who assumes the USA is the only country with freedom. Many exist and if you think for a moment these words were nothing but just some comedy to insert into a blog then take a chill pill and enjoy the Holiday.
I love many countries equally and generally dont write just for an American audience. Europeans would get the comedy – maybe next time I might make fun of them with the prices of cars and petro they are forced to pay
This was a post about domains
Smile – its a holiday where you are
Enjoy the fireworks.
N | Jul 4, 2010 | Reply
Alan,
Great and inspiring post. You totally got me motivated! Would you mind sharing the names of the affiliate companies for the leads that you mentioned in the article? I have some domains that fall onto those categories that I’ve been thinking of developing.
Thanks again for this article and Happy 4th of July to all!
Pat | Jul 4, 2010 | Reply
Very interesting article. Could you help out a rookie and tell me where to find feeds like the mortgage, insurance and weight loss categories that you mention?
Rick | Jul 4, 2010 | Reply
Alan,
Another great post, you are always a must read.
If you get a chance I would also like to know about the affiliate service you use for the mortgage, weight loss, and car insurance leads.
Thanks again and happy 4th!
Rick
Logan | Jul 4, 2010 | Reply
Alan,
Great post. I especially appreciated the focus on the daily goal. That helped me — I’m working on my lead gen business as we speak, er, type, and it gave a good perspective on what to shoot for with the business.
While I didn’t find your “anti-US” comments offensive, it is true that the Italians, Greeks, Portugese, Spaniards, Ukrainians, etc. are all paying dearly for the debts they’ve racked up to live the nanny state lifestyles you describe so well. Unless you’re a small oil-rich country like Norway, socialism always comes with a cost, and the fiat Euro will bear the brunt of it. The Euro won’t stay strong for long and millions will flee to the U.S. Dollar, itself an equally flawed fiat currency yet to be destroyed by socialism. But, the U.S. Dollar has those hard working Americans behind it, paying the income taxes that enables the U.S. government to pay interest on the dozens of trillions it has borrowed — and continues to borrow — and still retain the strongest fiat currency in the world (at least for a few more decades). In the end, all good fiat currencies must come to an end. They all will someday. Bigger and bigger governments thanks to socialism will ensure this will be true. It’s all a question of when.
Alan, I too would greatly appreciate an email of your preferred affiliate programs, since lead gen is my specialty.
Kind regards,
Logan.
PS – any good valuation of a domain name or any other business should not be looking at revenues but at free cash flows — two very different things! Operating expenses take those revenues away so you cannot say that the reported revenues are the sole basis of the value of the domain or business. It’s only the cash that remains after operating expenses are taken out that matters in the valuation. You can use EBITDA as a lose proxy for free cash flows — unless the business has debts on the balance sheet which also must be paid before the remaining cash is free from obligation to others.
Alan | Jul 4, 2010 | Reply
Logan,
You’re completely right about EBITDA – I tried to make this post simple and spoke in terms of profit. In my experience most of the money for development is front end and when the sites get going its basically auto-pilot so the actual cost is not really that much besides content and link building which is more or less an employees salary or two, or the site owners time which can be valued differently depending on the person.
Obviously some sites cost millions to make but lead generation is mostly content based sites which really do not demand any extensive databases, social networking systems and other expensive elements.
Yes, EBITDA is the measure not revenue. Many companies have millions in revenue and not a dime in profit – I had one for a while which is still haunting me.
As for Europe – yes, many call them Nanny States but any government that provides benefits to people when not working has at one or time or another been called a Nanny State. While my comments were completely in good humor I don’t think any American truly believes one should pay for healthcare. Healthcare should not be a business but a given right from one human to another for the proper care – essentially most Americans are one accident away from bankruptcy due to the healthcare system. If anyone thinks health care should not be free then they have never been sick.
As for maternity leave – a family should have the right to enjoy more than 6 weeks with their child before having to share the bond with a stranger (nanny)
I love America and there are things about Europe that drive me nuts also.
The discussion is better over a drink since way too many politics play online especially when some people believe one is actually saying one country is better than another which is not the case. Here its just humor being over-analyzed too much.
I understand all countries have their problems
But hey – in terms of affordable living our big cities do quite well. In Forbes last annual review of the top 20 most expensive places to love only New York City was on the list from the USA.
It’s give and take wherever you live.
I think I’ll do a post about affiliate programs later in the week – too many people are emailing about this and its easier for me to post when I get time.
ze | Jul 4, 2010 | Reply
Alan,
you don’t blog often.. but when you do you’re always louder than all the “white noise. I agree with you 100%, including how different the European and American are. Coffee included. We can learn a lot from each other.
Could you please share, or email, the affiliate programs that are working well for you?
Happy 4th!
Duane | Jul 4, 2010 | Reply
Great Post!
It’s time for domainers to get it!
Why mess with peanuts and constantly having to flip a domain, when you can build and put business on auto pilot. Constantly collecting revenue while enjoying friends, family and different country’s.
Elliot started a post about lead generation ( I think it was end of May) this year. George P. and myself hopefully helped out a little with some “Getting started answers”.
If all domainers would kick there self in the … and start building actual business sites, lead plattforms etc. would boost actual domainnames to values way above imagination!
Many domainers preach how great certain domains are for end users and how great it could be for there business and online presance. Talk, talk, talk.
If you actually own a Ferrari you want it to run on all 12 cylinders instead of just 1 barely moving you along.
1 lead generating site making 50k per year is worth way more than any great domain sold for 500k. Once a domain is sold, thats it. No future for possible income for the name.
Running a lead gen site for 10 years (50k per year)is bringing in 500k and who knows what price it might generate 10 years from now. 10, 20, 50 or 100 times its value from today?
Flipping names is short sighted unless your above a certain age and your just enjoying the few years you have left. For anyone under the age of 50 this should be there wake up call.
Once again, great post Alan and developing is the only future for smart domainers.
Best
Duane
Happy 4th July to all.
PS: I am just as american as any, but still decided to live in Europe. Both the U.S. and Europe has it’s good and bad. But there is no place in the world that’s perfect.
Mike | Jul 4, 2010 | Reply
Thanks for this inspiring post. Found you through the domaining.com newsletter and I’ve now added you to my fav feeds
I too would love to know what affiliate services you’re using for the mortgage, weight loss and car insurance leads; if you don’t mind sharing?
All the best,
Mike.
Shane | Jul 4, 2010 | Reply
Alan,
Thanks for the response. Well put and I really do enjoy your blog despite my tone.
Jeff | Jul 4, 2010 | Reply
People need to lighten up and relax. Have a beer.
I did not see any offense to alans post at all. Heard only good things about him.
Happy 4th
Anthony | Jul 5, 2010 | Reply
I would appreciate knowing the affiliates you use too. Could you please email them to me as well. Seems like there is a flood of requests for them here Hopefully you do not mind sharing this info with us. Thanks.
Andrew Rosener | Jul 5, 2010 | Reply
Hey Alan,
I would also like to know what programs you are using for your mortgage leads?
I’ve been expirementing with Lead Pile, but they aren’t paying anywhere near the price per lead that they advertise.
GREAT POST…very well put, clear and concise.
Viper | Jul 5, 2010 | Reply
Excellent post.
Charley | Jul 5, 2010 | Reply
Alan
I hope you haven’t missed my comment above. Looking forward to your email.
Thanks
CC | Jul 5, 2010 | Reply
Very nice article. I am way confused on one thing that was stated. “$375.00 per day is just 7 mortgage leads, 7 weight loss leads or 15 insurance leads.” I do not understand that. How does one get paid that much for a lead. It that affiliate marketing or CPC? I get between .05 and $2.00 per click on parked domains. I would like to start by reaching a goal of $50.00 per day but I do not know how to generate those leads? Please help.
Duane | Jul 5, 2010 | Reply
@CC
The following thread should give you the answers and insight how to get started. Be sure to roll your sleeves up and get those elbows greased.
http://www.elliotsblog.com/lead-generation-on-targeted-domain-names-0790
Mor | Jul 6, 2010 | Reply
Hi Alan,
Great article.
As a new domainer I learned alot.
I want to know more about the affilates you use:
Mortgages, Loans, etc… Please send me by email.
Thanks and good day.
M.M
Mike | Jul 7, 2010 | Reply
Hello Alan, good post. Can you please possibly send me the affiliates you are using for these?
Jonathan | Jul 7, 2010 | Reply
While I agree with 99% of your post Alan, I think that it is possible to find good cappuccinos in America. Have you had any Stumptown Coffee lately?
Alan | Jul 12, 2010 | Reply
Sorry – I just do not have the time to email everyone individually but here is the link to some information on affiliate programs and general tips for finding some additional revenue sources
http://www.newfoundnames.com/domain-development/affiliate-programs-and-more/
chaussures puma | Jul 20, 2010 | Reply
Hhe article’s content rich variety which make us move for our mood after reading this article. surprise, here you will find what you want! Recently, I found some wedsites which commodity is colorful of fashion.
Meg | Aug 16, 2010 | Reply
Hi Alan,
I’ve been reading so many blogs about monetizing developing, but yours is the most honest and resourceful one. Particularly how you categorized affiliates into five stages. I’m between stage 3 and 4 and have been thinking adsense earnings are getting to be a piece of joke. There are so many SEO bloggers and blog bloggers, but they really don’t know what’s going on. I feel fortunate that I stumbled upon your blog.
Thank you.