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James Iles

Inside Interview: Behind The $700,000 Nuts.com Acquisition

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By James Iles, Jul 28, 2015
  1. James Iles

    James Iles NamePros Writer PRO Business Account VIP Trusted Blogger

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    In 2011, the domain name Nuts.com was acquired by Jeff Braverman, the CEO of a family nut shop first set up in 1929. As a college freshman, Jeff created NutsOnline.com which helped Nuts.com become what it is today. Since 2002, the company has grown revenue from $1.5 million to $35 million.

    Jeff Braverman and Nuts.com have received worldwide media attention - featured in Entrepreneur, Fortune, Forbes and Bloomberg BusinessWeek to name but a few. In 2014, Jeff was also awarded an EY Entrepreneur Of The Year prize.

    In the interview below, we learn more about Jeff, Nuts.com and the acquisition of the domain name Nuts.com.


    1. Can you give us a background of your company?

    My grandfather started a little nut shop in Newark, NJ in 1929. My father and uncle went into the business, but it largely remained the same for 70 years. As a freshman in college, I launched Nutsonline.com and that was an early beginning to explosive growth in the business. We went from 150 products or so to nearly 3,000 products, became certified kosher, organic, and gluten-free. Nuts are now less than 50% of our sales.


    2. You first started online in 1999 at NutsOnline.com. Was this your first choice of domain name?

    No, it was my 7th. I had to find an unregistered domain as I didn't have any money to try and buy one from someone else. The previous 6 choices were taken, and I think they were all porn sites.


    3. When did you first consider upgrading to Nuts.com?

    Probably in 2005. I dug up notes from an old computer where I had jotted down the owner of the domain name before it was hidden with domains by proxy.


    4. How did you find out that Nuts.com was available to purchase? Did you actively seek out the name, or was it a domain name that was offered to you?

    In 2008, I chased down the owner using some creative investigative skills (as letters, emails, and phones calls were unanswered). The owner agreed to redirect traffic to my server for 36 hours or so, and I discovered type in traffic was relatively low and most was coming from the UK, looking for a soft porn magazine called Nuts. I shut down the process then, only to reopen it in 2011. A few days after I raised my bid to the owner, he decided to list his portfolio with Sedo.


    5. As listed on DNJournal.com, the price paid for Nuts.com was $700,000. Can you tell us the owner's original asking price and your opening offer?

    The owner was entirely uninterested in negotiating and not once did I receive a counteroffer. When he put his portfolio on the market, I feel that opening bids for each domain [in his portfolio] were $300,000.


    6. Were the negotiations fairly straightforward to arrive at your price of $700,000?

    Nope. I would bid and get no response. Ultimately as I felt the need to continuing bidding more, I got some insight from the Sedo broker and decided to just put the negotiation to bed with a final offer. It worked.


    7. Do you think that $700,000 is a fair price for owning such a great domain?

    Depends on one's ability to monetize it. Hard to generally answer this question. If the NPV [Net Present Value] is positive, then sure. However, can't answer this in absolute. Since creating a detailed model would have been unnecessary and just guessing, I did some very rough back of the envelope calculations, which gave me comfort that I could get a return within 10 years. There were of course intangibles that are hard to quantify, such as the impact of a better brand on let's say hiring.


    8. Would you have considered paying more than $700,000 for the name?

    No. This was my upper limit based on the data I had and how the negotiation was unfolding. I was walking away at any higher price. In hindsight, I would have been willing to pay a lot more, but only because I was able to generate massive returns on this through my hard work.


    9. There is a lot of talk in the domain industry about new domain extensions. Would you ever consider rebranding to a new domain extension (such as nuts.site), or is .com always the best?

    Nope. Can't predict the future, but right now when I see something that is not a .com, I questioned the validity and credibility of the business.


    10. Do you think you could have achieved the same level of success without owning nuts.com?

    Hard to say. We were already doing great ahead of time, and upon rebranding we had initial setbacks. However, things did come roaring back and then some. Rebranding to Nuts.com was one of my best decisions, but nowhere near as important as decided to start Nutsonline.com in the first place! Again, it's what you do with the domain. Nuts.com had no traffic before we rebranded. We created Nuts.com and spent a ton on rebranding every aspect of our business.

    --

    Thanks to Jeff for taking the time to answer our questions.



    Inside Interviews is a blog series profiling the buyers of high-value domain names. Find out their motives, negotiation tactics, and their opinions on popular domaining topics only on the NamePros Blog.
     
    The views expressed on this page by users and staff are their own, not those of NamePros.
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  4. James Iles

    About The Author — James Iles

    Writer for NamePros.com, domain name investor and broker. For all inquiries relating to stories and interviews, please email: james@namepros.com

    This is James Iles's 43rd blog post on NamePros. View all blog posts

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  5. Comments (12)

  6. Tiger

    Tiger Established Member

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    That's nuts!
     
  7. kollam003

    kollam003 Business Member Business Account

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    Good one to drove us nuts...
     
  8. sbweb

    sbweb Active Member VIP ★★★★★★★★★★

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    NUThing but good info.
     
  9. Joseph Green

    Joseph Green Established Member

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    NUTritious and delicious!
     
  10. James Iles

    James Iles NamePros Writer PRO Business Account VIP Trusted Blogger

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    The puns are driving me nuts... ;)
     
  11. Kate

    Kate Thinking inside the Box™ VIP ★★★★★★★★★★

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    I cannut believe it...
     
  12. pokainc

    pokainc NameGalaxy.com NamePros Supporter VIP ★★★★★★★★★★

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    i can't believe it's NUT butter
     
  13. DomainVP

    DomainVP Domain Expert Business Account VIP

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    D's?

    -Got Em'
     
  14. bhartzer

    bhartzer Member VIP

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    Hmmm, no mention of the fact that when they moved to Nuts.com they lost a bunch of sales and rankings. When they bought that domain and moved to it, they promptly lost 150 sales a day because they didn't do any "due diligence" on the domain, and didn't move from NutsOnline.com to Nuts.com properly.

    Their search engine rankings tanked when they bought Nuts.com.

    The NY Times did a huge article about their move and how they lost rankings and tons of sales.
     
  15. DGMDomains

    DGMDomains Established Member

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    You must be nuts....Great interview as always!
     
  16. pablohc86

    pablohc86 Active Member VIP

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    great info!
    however after 3/4 some months they had a growth and probably it recover the initial lost.

    source: http://www.cision.com/us/2012/09/a-case-study-in-branding-did-nuts-com-go-nuts/

    maybe they should have kept the first site and point nuts.com to nutsonline.com as it had no type in.
    after some months, when people is already aware that nuts is nutsonline move all to the 4L and include the "online version" to it.
     
  17. cdboard

    cdboard Top Member VIP ★★★★★★★★★★

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    saw a tv commercial for nuts.com today.
     
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