Jets.com – a Very Bad (Brokered) Sale.
By Alan on Sep 23, 2009 in Domain Sales | 37 Comments
I have little desire to blog these days but every now and then a sale is published and I say to myself – seriously, who sold that name at such a crazy give-away price or (probably more times) who is the crazy person who just paid XXXXXX for that name. Not a day goes by when one of these 2 questions somehow finds its way in to my thoughts but Jets.com.
Oh my.
Its taken me a few days to even put my thoughts together on this.
The purchase of Jets.com was a steal.
Yes – the buyer basically robbed the bank without any heavy artillery needed.
To quote Andrew’s piece on domainnamewire.com the new owner said ..
“Justifying the $375,000 price tag for the domain wasn’t too difficult. The previous owners were getting 48,000 unique visitors a month, Klinger explained. “If we took 1% of that, that’s 480 people that would possibly fly private,” he said. That may be an unrealistic conversion rate, so he keeps dividing it in half. “If we can get 30 clients a month by having jets.com as a domain name, the ROI would pay us back in a month or two.”
ROI back in a month or two?
15 years since symbolics.com was registered and people can’t see the light.
But wait – I’m not talking about main street.
I’m talking about the domain brokers in this industry.
Before you sold domain names what did you do? Sell photocopy paper at escalated prices or sell shoes always upgrading customers with that useless shoe polish for $19. If you can do either of these things you surely can sell an asset at a value much more than 2 months ROI ?
You think you know how to sell since you made a sale for $375,000.
Not a chance.
You failed and failed miserably.
It doesn’t take a rocket scientist to figure out how right these guys were but it does take a good salesman to sell this information to clients.
When an end-user can sit down and essentially mock about how cheap the price was by doing simple math and saying hey – we’ll get our money back in 60 days then I’m sorry – but I wouldn’t give you my grandmothers coffee table to sell.
Furthermore I know of 3 serious buyers who submitted offers in the six figure range or inquired directly with SEDO (buyers who could easily be qualified by doing a Google search on the name) and SEDO came back with a minimum offer of over a $1 million.
So what happens next.
Someone – the seller I can only presume decides hey, we have to move this name so let’s drop the reserve.
Reserve is dropped by over 60%
No one I spoke with ever heard from SEDO now that there was a substantial reduction in price.
A 60% drop on one of the key names in our entire industry and not a peep.
No press release – no showcase – no push to auction.
Absolute rubbish.
Reminds me of a used car salesman who wants to meet a quota this month and has no idea how to extract real value – even a fair discounted value for an asset.
What happens next … you know the story … a charter jet company steals the name, laughs how great the purchase was and people have something to blog about.
Wow – a $375,000 sale people say.
Me. I say it was a terrible job of brokering such a great domain.
End users are not hard to find – obvious by the continued increase in sales.
Whats hard is to find brokers who understand how to deal with more than one.
Finding an end-user creates a sale.
Finding end-users (plural) creates a market.
Think about it.
15 years in to this thing and even our brokers need help.
Granted SEDO does have some good sales but a scorecard of ZERO on this.
Congrats to the buyer – Concord Private Jets - you just secured a domain which will forever change the course of your business – at nothing less than the price of a gumball.
michael berkens | Sep 23, 2009 | Reply
Alan
Although I agree with you the buy was a steal for the buyer, a couple of notes.
First I received an e-mail on August 31,from Sedo.com saying that the asking price was reduced to $500K.
This was a general e-mail that went out and should have been received by all interested parties.
Second on my Blog yesterday, I had domainers arguing that arearugs.com was a better buy at $400K.
The seller of the domain was in the jet charter business and sold all of its operating assets, other than the domain, to another charter operator, and should have stuck to his seven figure price.
Having said that I don’t know how the broker is to blame. If the seller reduces his price and an offer is presented that he agrees to accept how is that the broker’s fault?
Alan | Sep 23, 2009 | Reply
Good points – no one I know was aware of the reduced price and (correct me if I’m wrong) nothing publicly was noted about a lower reserve.
The hoopla about Jets.com was first noted by blogs when it became available – more than any direct promotion by SEDO that I saw.
You could be right when you say “Having said that I don’t know how the broker is to blame. If the seller reduces his price and an offer is presented that he agrees to accept how is that the broker’s fault”
The buyer and seller were happy – so it was a good deal for both at the nend of the day however shouldn’t brokers try to maximize value and not just create a deal imo.
I think when simple math can prove how valuable a domain like this is much more effort can be given by our industry brokers to maximize value – its those brokers people should flock to, not the ones just looking for a sale.
I think this sale – regardless of the economy should have been in the millions but hey, my opinion never counts for shit.
Elliot | Sep 23, 2009 | Reply
Couple comments on this. First is that I bet most of the traffic is people looking for the NY Jets website rather than a private jet charter company.
Secondly, this name was previously owned by a charter jet company, no? If the name is as important as the service, they might still be in business.
On the very positive side, the company has a great, saleable asset should the need to sell ever arise. They certainly could get their money back on a sale if it is ever necessary.
Alan | Sep 23, 2009 | Reply
Elliot,
This economy has hit everybody – even with the best domain name 100′s of other factors can cause a company to fail.
Prior use of this domain was nothing but an extreme positive for selling this domain to endusers in the private jet business.
The owner said if he gets 30 new clients he would break even in 30-60 days. Lets chop that further … 5 new clients a month – now you’re looking at 6-12 months ROI.
Unbelievable.
Minimum value imo is 2-3 million but certainly a hell of a lot more than 375k.
New York Jets who ?
Kevin Jackson | Sep 23, 2009 | Reply
Well said Alan.
I was a bit amazed to see comments on Mike’s blog yesterday where someone really thought that arearugs.com was worth more than Jets.com. Nonsense.
This sale is a big joke. The seller must have been having some serious cash flow issues.
I agree as well. Sedo messed up on this one. Big time. With the marketing power that they have, they should have been able to command a higher selling price for this domain.
Why didn’t they use Fly.com as a benchmark?
Alan | Sep 23, 2009 | Reply
Kevin,
I’m only familiar with fly.com for the sales price and really not sure if there was quantifiable data and prior use (within the travel sector) of that name so using it as a benchmark is not something I can say one way or another.
Every sale is unique in my opinion but when you have a name that defines a category – an exclusive, expensive category where almost all people use online methods for booking – with traffic and prior usage in the same field dollar value is way up there.
AreaRugs.com – I was suprised to see almost 2,000,000 exact search for that but the buyer did not get any deal imo. One its a very expensive online category where shipping expenses are usually quite high. Although area rugs can be extrememly expensive I’m pretty sure most people dropping 5-20k on a rug are not buying online – its the people looking for 200 or $500 rugs where your profit margin is low – ROI is a lot longer than 12 months when you attach a 400k price tag and maybe I’m crazy but its almost too generic of a term for my taste. I like orientalrugs.com much better.
nythemes | Sep 23, 2009 | Reply
you may be right, you most likely are.
i’ve heard the words such as stupid, dumb, idiot, smart overused to describe others, or decisions they made, so many times by people and “experts” that deal with domain names, it’s a real shame. Don’t you see how dividing the world into categories stupid and smart is a self-limiting judgement, do you realize how negatively it reflects on those who peruse it, who only see the world in 0 and 1′s.
If the seller was an idiot why haven’t any domainers been smart and bought it? or taken out a loan to buy it? If the seller was stupid for selling it at such a low prize, doesn’t that make most domainers even stupider for not buying, especially after reading this post.
Hence, it follows from your argument, domainers are stupid.
Alan | Sep 23, 2009 | Reply
nythemes – great comment. However the post was about finding more efficient brokers more than anything else.
Your comment “Hence, it follows from your argument, domainers are stupid”
I would never go as far as to say that but yes – in my humble opinion – a large percentage of purchases are wasted money by people who should know better. Thankfully the percentage is getting lower every day.
Also, and I’ve said this many times before most domainers are not businessmen – just owners of assets therefore the role of an efficient broker is needed more than ever to maximize value since many a domainer have no idea where to start, value or find buyers outside of the domaining community.
And to clarify – anyone who sells a name for a price they want is certainly not an idiot since they made the deal they were happy with however on the flipside, fools who pay dearly for names that have no value – yes, they fall in to a category all by themselves.
rjb | Sep 23, 2009 | Reply
If you look at the top 10 or 20 pure domain sales of all time, many being the names of big markets or industries – Business.com, Wine.com, Vodka.com, Computer.com etc – they still all together equal only a fraction of the bailout funds needed for ONE US bank in the past year. My point is that on a global business scale, the domain market is still chump change. Jets.com, a domain that can give the owner automatic respect and attention in markets of private jet sales or charters, markets worth hundreds of million or billions of dollars, sells for 375k. Domains still have a long way to go before they get the price recognition they deserve. Everyone on the street knows that gold has value, but many still think a domain is worth reg fee.
Andrew | Sep 23, 2009 | Reply
As the buyer described to me, there was essentially an auction for the domain and he came out on top at $375k. There was lots of publicity for the name being on the market. I really just think that right now, no one was willing to pay more for the domain.
Ron W. | Sep 23, 2009 | Reply
Great name…but it was sold at the wrong time (in a good economy, it would have went into the 7 figures range).
jeffcool | Sep 24, 2009 | Reply
Hi Everybody,
I registered jet.mx during the Mexico landrush. Since you all seem to be well informed on the matter, what do you think I should do with it ? Develop it ? Sell it ? How long do you think I should keep it at least ? What could be the target price range ?
Thanks in advance for you advices.
Jeff
Ed Muller | Sep 24, 2009 | Reply
@Jeffcool, the first step in getting a good valuation would be to not spam the comments with a backlink.
@Alan, we’re all stupid until we’re all rich. Then we’re suddenly geniuses. But it could take a while. I’ll play dumb until I get there.
nSathees | Sep 24, 2009 | Reply
I commented yesterday in Domain Name News site about Jet rentals. Poeple over there ware discussing how many wants to buy a Jet? not many, but many many co-ops spend millions transporting their Top bosses. That’s where this name fits.
In my opinion Jets.com is worth 1.7 million US
Perhaps the seller should have held it for another year or so!
Bob | Sep 24, 2009 | Reply
UFB! Can we get a re-do here?! I’d move mountains to play this one at this price!
IMHO – This is truly the deal of the year! What’s a jet sale or jet charter worth these days?! I know – 5 to 7 figures! I fly big jets and I KNOW what they cost to operate/buy.
So, the buyers have captured a revenue stream AND a brand that will never die until the Internet fundamentally changes – which may NEVER happen, and will likely grow!
Deal of the year domain bro’s – watch and learn! OUCH! And I mean my head too!!!
Successclick | Sep 24, 2009 | Reply
FINALLY.
Somebody knocks some heads about domain seller/brokers/auctioneers not doing HEAVY advertising of domains that we’re selling. Jets.com? Well, even if we’re talking the NY Namath legendary team, still worth over half a million.
If we’re talking private jets… big money. If we’re talking “jet sales”, then even more money into the mix… the value of this domain is $1mill.
Why didn’t the potential interested parties push this price higher? We’re all told to “lower our reserve” to excite some interest… but how good is it when we lower our reserves and the broker/auction site doesn’t do anything to bring in bidders by advertising to the proper markets for the domain?
Why pay 10%, 15%, 20% to companies selling our domains who don’t make an effort to get BIDDERS INTO THE GAME?
Come on, it’s almost 2010. Huge corporations have bought thousands of domains for over a billion dollars in the last 10 years. Brokers have a responsibility to CONTACT and ADVERTISE the auction of domains to the relevant industries for each domain. Otherwise, why are they getting paid $150,000 commission (at 15%) for a million dollar sale? Cuz they have a pretty site with working features to list your domains?
It’s time for domain auction houses/brokers to EARN their commission. I also believe Jets.com should have sold for more than it sold.
robby | Sep 24, 2009 | Reply
I agree with Andrew. It was up for auction and it went to the highest bidder. It is that simple. We are in a bad economy and that is obviously the value in this current market. Why did’nt everyone that thinks it is a steal bid higher? Why is Estibot valuing it at only $160?
Alan | Sep 24, 2009 | Reply
Robby,
When the name was first announced for sale many people blogged about the name – in fact, bloggers promoted this name more than SEDO.
Most people I know were told the reserve was over a $1m and even many blog posts stated that.
A lower reserve – over 50% lower was introduced and apparently (according to Mike) sedo sent out an email. Whoopdedo – an email – when one of the marquee names of this industry gets lowered by over 50%.
No other mention of Jets.com going to auction – which btw I’m still not sure it did – sounds like a private sale to me as I can almost gaurantee you some blogger would have picked this up with a headline like … 2 days left to go, jets.com at $375k – reserve met.
Estibot – who cares.
As for your comment “Why didn’t everyone that thinks it is a steal bid higher?”
This is the #1 argument made by domainers after a sale goes cheap.
Its a BS Argument because it pertains to why another domainer didn’t buy it.
A broker’s responsibility 15 years into this business is not simply to find the maximum value a domainer would pay for it but to attract the most attention possible from endusers – especially key names like this.
Yes, many domainers have suffered cash flow problems but 1000′s of companies are thriving so who gives a shit about what another domainer would pay when you have a name that has
GLOBAL USAGE
In comparison to AreaRugs for example your biggest and probably only major market is the USA. Jets – people charter them from Morocco to Antigua
PRIOR USAGE
The traffic was built based on prior usage in the jet services industry – customers are already knocking on your door.
So many more variables.
This is not a name for a domainer – this is one of the KEY end user names with 100′s of end users who can afford it.
We can all hide behind the status of the economy or hindsight is 20/20 but when a real estate agent charges you 6% to sell a $10 million house and our industry charges 2 and 3 times that just to have a listing on a website brokers my friend need to go back to sales 101 school and provide a hell of a lot more value for thier commission.
Andrew | Sep 24, 2009 | Reply
Alan, I agree with many of your points, but not
“When the name was first announced for sale many people blogged about the name – in fact, bloggers promoted this name more than SEDO.”
Why do you think bloggers promoted it? Because Sedo go the press.
Alan | Sep 24, 2009 | Reply
Andrew,
You had a typo there but I think I get your point. Yes, I agree many times bloggers post news released by the company brokering the product (hence actually a SEDO release posted by ABC blogger) however I guess my point was more or less of how the domain community was promoting this name more internally (to the network of domainers) then how a broker should market this asset to end users.
Of course, I’m not privy to all their marketing efforts however price tag reveals a very poor job and from a sellers pov – thats all one needs to judge the success of a broker in a particular deal.
If you had a $1M house and your real estate agent sold it for $375k I’m pretty we can both agree we would never use them again.
Problem in this industry there are too little choices for brokers.
In theory that should not require us to accept lower standards but in reality it really does.
Most of us are ok sitting and waiting for a name to sell while forking over 20-40% for nothing more than a listing on a website.
Its a little crazy to me – Honestly, I expect more from my lawn people than our domain brokers … and I pay them a lot less.
Joe | Sep 24, 2009 | Reply
I have been disappointed with Bido as of late, but one thing I believe – If Bido had Jets.com for sale the marketing spasms would have felt like an earthquake. That name would be gushed *everywhere*.
Sales is not a business for most people. Unfortunately, most people who get into sales treat it like an HR job or something. Sedo, as an established domain broker, may have too many HR-types and too few type-A personalities that are needed to push an aggressive sales plan.
Alan | Sep 24, 2009 | Reply
btw … the buyer basically said $375,000 would be recouped within 30-60 days.
How many of you would sell your traffic names for 30 days parking revenue? or 60 days?
not annual 2 or 3 times revenue.
You make $100 a month revenue – and you would sell the domain for $100 – $200
Answer – ZERO.
No question – as Bob said – STEAL of the year – possibly much longer.
Alexander | Sep 24, 2009 | Reply
The new owner can now LEVERAGE it to achieve a high ROI. They get to brand it. They get to convert those visitors seriously looking for JETS into clients.
When you have something valuable to sell, it’s smart to own high grade domains that match your business. It’d make a huge a difference when you use the domain/website to sell a $10 product or a $100,000+ product.
There lies the power of leverage.
Let’s see how well the new owner makes things happen.
Maybe the previous owner didn’t do well with the domain/website. Maybe it’s a cash flow problem. If they can use the fund to accomplish their goal, it’s what matters to them.
Thank you, Alan, for an interesting discussion.
jeffcool | Sep 24, 2009 | Reply
@Ed Muller
Sorry the link came automatically afer I post not when I typed. It was not intentional. Any clues or advices which can help ?
Successclick | Sep 25, 2009 | Reply
Alan…
Speak for us domain sellers, bro! (I am too imbedded in the system now to say what you’re saying on my blog… but it’s time domain auction sites EARNED their commission by promoting each and every domain. Best to do that by having auctions THEMED, as many pro domainers have suggested in the last three years. I suppose with more and more new domain selling sites and services popping up, that will create a “need” for the bigger auction sites to step up to the plate. Nothing like a flooded market of competition to force the real players to come to the front with some real value for domain sellers.
oops. I didn’t say nuttin’. I’m just watching the stars flicker from my deck in this beautiful late night Pacnorwest sky…
Dan | Sep 25, 2009 | Reply
Buyer purchase this at domain investor’s price. Kudos!
Eric Borgos | Sep 28, 2009 | Reply
One reason the jets.com price could be low is that it is at risk for trademark lawsuits, similar to the Miami Dolphins UDRP complaint against the owner of Dolphins.com.
Also, Contests.com recently sold for around the same price as Jets.com, and Shows.com sold for around $100,000, so although Jets.com seems like a great deal, that might just be the current state of the big domain market. It is certainly a great deal for an end user (an airplane company) though.
Alan | Sep 28, 2009 | Reply
Eric, fair comment however from what I remember the dolphins.com is/was a take away waiting to happen since the owner was showing Miami dolphins ppc links.
Plus you cant sell dolphins online – you can sell Jets though.
Just like cowboys.com has no reference to Dallas cowboys the New York Jets would have no claim to this. Of course we both have seen many silly cases go in front the UDRP board however from an outsider’s perspective there is zero reason why an attorney would advise a private company not to buy this name based simply on the trademark some football team has (which half the world doesn’t know or care about) if use is going to the private jet sector.
In luxury markets the economy is still pretty good – those why fly private hardly ever feel the impact of recessions – the nouveux rich sure, but real wealth – very little. In fact, most of the time they make more money.
Oh well, as Bob said – he would move mountains to play in this range, I’m pretty sure quite a few others would to but we will never know.
Thanks for commenting.
StumbleMusic.com | Sep 29, 2009 | Reply
Well, estibot is nonsense. Agree with many ppl here, steal of the year.
Successclick | Sep 30, 2009 | Reply
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And if you follow all the above advice, you’ll understand why Jets.com was a killer deal at $375k!!
Mark | Oct 27, 2009 | Reply
Ok, this discussion is a month old but I need to respond. First of all, there is NO WAY that this domain brings an extra 30 customers per month.
The private jet market is very profitable – but also very competitive. I have a feeling not many private jets are booked via type in traffic. Especially when 99.95 of the traffic is football related. Additionally – I bet if you looked at user intent, the average private jet customer would be more likely to google / type in “private jets” rather than just “jets”.
It’s still a great name at a good price, but don’t tell me they are going to get one extra customer per day via type in traffic, I think one per week is a stretch even.