Welcome to the 13th post in our Behind the Sale series on the Efty blog. In this series, I talk with domain name investors who share the details behind a recent sale. You will learn how they bought low and sold high, how the negotiations went down and much more.
Today, I am again chatting with David Gruttadaurio a part-time domain name investor from Indiana, in the United States who also operates a service company with 17 employees.
David, tell me a little bit about yourself.
I’ve been buying domains for a long time. My very first purchase from GoDaddy in 2004 was for a domain to be used by my service company’s website. Over the next several years, I would buy domains I thought would be good for development. I was completely unaware there was a domain name aftermarket, so selling them never occurred to me. Looking back, my domain purchases were horrible… not one of them would have ever sold anyway. And of course, I never got around to developing any of them…
In late 2012, I ran across DomainShane.com. I’m not even sure why that happened. But reading it opened my eyes for the first time about the domain industry. From there I found other blogs and websites devoted to domaining. I paid close attention to which domains were selling and more importantly, how much they were selling for. My first sale after just a couple of months was a direct sale of $2,800 for Zangfu.com that I bought at NameJet for $79. That purchase was pure luck. I knew it was Chinese (which was a good thing), but I was clueless that it was also a key feature of traditional Chinese medicine. The sale to the acupuncture clinic was fast and easy and I was hooked – and I’ve never looked back.
We basically buy any domains we feel have commercial resale possibilities. But if we have a specialization, I would have to say it’s the cannabis niche.
When two US states legalized marijuana for recreational use in 2012, I believed this would eventually become the law of the land in the US. I began buying cannabis-related domain names at that time. My first sale in this niche was 420Today.com for $5,000 in 2014. I’ve had many sales since then. Cannabis-related domains comprise almost 25% of our portfolio.
What is the domain name that you’ve sold?
I sold Signal.us last month (April 2021) via the Efty Investor platform. All of our domains have BIN pricing.
How much did you pay for the domain and how much did it sell for?
I purchased the domain in October of 2016 at an expired domain auction. I remember looking at it and thinking it was an awesome domain, despite it having a .us extension. It had a multitude of commercial applications. Another bidder had an interest in it but quickly withdrew. I paid $39 for it.
Our selling price for this domain has fluctuated over the past four and a half years. It was priced at $5,000 initially. Then I dropped it to the $2,000/$3,000 range. When Sedo sold Oxygen.us last year for $18,000, I took note and decided to increase the price on our domain to $12,500. It turned out to be a good decision; that was the selling price.
Can you share how the negotiations for this domain name went down?
We rarely have to negotiate on sales (about 5% of our sales are negotiated). The broker that contacted me regarding Signal.us did so directly and submitted an offer at that time for $3,500.
I replied that $12,500 was a BIN price. I felt it was competitively priced and we were not interested in selling at a lower level. My reply also included the link to our Efty sales page (even though I knew he was aware of it) and pointed him to Escrow.com. That was our only conversation about the domain. I heard nothing else from him and assumed he had moved on to another name for his client. Eight days later, the Escrow transaction to buy it came through in the morning, and the sale was completed later that day.
Thanks for sharing David, is there anyone else you like to add?
I think we’re going to see higher priced.us domain sales going forward. I believe a contributing factor to this the popularity of Zoom – which operates on Zoom.us – and it’s drawn a lot of attention to this extension. In fact, Zoom.us is the 15th most popular website in the world today. A global brand adopting a .us extension lends a great deal of authority to it. And it does this even though it owns the .com extension as well.
And, not long ago Andrew Alleman was commenting on some recent six-figure domain sales by Shane Kinsch. He said, “It goes to show the negotiating edge you have when you don’t have to sell.” Very few of us have these super-premium domains. But I think what Andrew said applies to most domain sales. I didn’t have to sell this domain. And I made it clear at the outset the only offer that would be accepted was the listed price. Of course, you have to be realistic about the quality of your domain name. If you believe it’s accurately priced relative to its value, don’t be in hurry to accept a tempting, lower price.