BrandBucket Experience

[xtremex]

hello

I am new to BrandBucket. Before getting my hands on this

I wish to experience about brandbucket from my fellow members


Thanks

 

[Jeffrey Emerick]

Are these #'s correct? (based on a 100 domain BB portfolio)

First year:
100 hand regged domains= $1,000 cost
100 BB listing fees = $1,000 cost
Total cost to list 100 domains = $2,000 (not including rejected domains by BB)

2% sales per year = $2,000 (based on $1,000 average net per sale)
Break even the first year.... Then...

Second Year:
100 domain renewals= $1,000

2% sales per year = $2,000 (based on $1,000 average net per sale)
Finally profit $1,000 the 2nd year because of no listing fees.

Based on my calculations, it would take 2 years to make a profit of $1,000?



**Please Note: This only counts hand regged domains, NOT drops/back orders or BB rejected domains.

 

[ApeXX]

Are these #'s correct? (based on a 100 domain BB portfolio)

First year:
100 hand regged domains= $1,000 cost
100 BB listing fees = $1,000 cost
Total cost to list 100 domains = $2,000 (not including rejected domains by BB)

2% sales per year = $2,000 (based on $1,000 average net per sale)
Break even the first year.... Then...

Second Year:
100 domain renewals= $1,000

2% sales per year = $2,000 (based on $1,000 average net per sale)
Finally profit $1,000 the 2nd year because of no listing fees.

Based on my calculations, it would take 2 years to make a profit of $1,000?



**Please Note: This only counts hand regged domains, NOT drops/back orders or BB rejected domains.

Your numbers are fairly accurate, but not including rejects leaves out a pretty big part of the equation. I'd say generally the absolute best submitters probably average 60-70% acceptance rate, and I know many of us are doing much worse.

While you may sell the occasional brandable reject on your own, in most cases you're eating those costs. And with only a 45% acceptance rate (in my case at least), that's a lot of cost to eat.

It's one of the reasons I've been a very vocal critic of the listing fee. I think that the brandable marketplace has changed dramatically since that business model was dreamt up and it is no longer viable with the intense reseller competition for strong brandable domains.

 

[Brandworthy]

To go 8 months with no sales on a 100 name portfolio is a little rough.

Up till a couple of months ago I knew of 2 portfolios with combined ~600 BB names that had zero sales after about 8 months. One seller finally got a couple of sales, the other none and sold out his 300+ names and quit brandables.

The dynamics of this niche are changing, both for sellers and marketplaces, and right now it's not clear how things will settle. My guess is things are going to fundamentally change in next 6 months.

 

[trelgor]

The dynamics of this niche are changing, both for sellers and marketplaces, and right now it's not clear how things will settle. My guess is things are going to fundamentally change in next 6 months.

What are the scenarios you see?

 

[NameFit]

I think that the brandable marketplace has changed dramatically since that business model was dreamt up and it is no longer viable with the intense reseller competition for strong brandable domains

The dynamics of this niche are changing, both for sellers and marketplaces, and right now it's not clear how things will settle. My guess is things are going to fundamentally change in next 6 months.

2% turnover rate at an average of $2000/sale is a number that a domain seller any size portfolio would be happy with. The issue with brandables is that chances of end user buyer reaching out of their own are less - so there is limited exposure other than listing sites. That is just the nature of brandables. I still see lot of additions to BB and lot of them registered within past few months, actually weeks and many within days - that really dilutes the market in a way. If people think that they can just hand register the names today and hope to sell them at $1000 profit within few months - it is more of a wishful thinking in my opinion.

Sellers are creating competition among themselves without creating additional channels of sales. The dynamics for brandables marketplace will probably shift towards bigger portfolios because the occasional sales will let them stay, especially taking into consideration the investment they have done, while smaller portfolios with limited budget and resilience will probably opt out.

I think the bigger question is, have the norms and trends of domain industry changed? Is age no longer a relevant factor (when I say age, I do not mean 'per-se' but on the lines of quality)? Is there more of a trend towards these 'brandables'? Is brandability becoming a big factor now? When it was not? And people do not realize that is not the name that is brandable, but the underlying technology that is brandable. Good to have a marketable name at best - that is the scope of a domain name.

 

[ApeXX]

2% turnover rate at an average of $2000/sale is a number that a domain seller any size portfolio would be happy with.

I disagree with this assumption. If you are backordering or registering domains, having only half of them actually accepted by BB, paying $10 ea for those that are listed, and then selling only 2% of those listed names a year at $2k with 30% of the sale lost to commission, then chances are you are not a happy domainer. The math doesn't work.

 

[cocaseco]

Nobody seems to have looked at the other calculations you can do with that sales number, and fewer assumptions. $1.1M in sales is $770K in gross sales after COGS, or $385K/year, or $32K/month. Assuming they are an S corp or LLC with no corporate tax obligation, that is a pretty thin number for a company with physical expenses such as rent and IT etc. They seem to have a budget for marketing in high CPC segments so that has to come from the gross as well. Then there are salaries, presumably at least a couple people making over $100K and the rest of the staff payroll and your done. They do business in California, one of the most onerous places in the world in terms of costs to an employer. In other words, they would seem to barely be profitable, if at all. Now what likely turns the corner for them is the listing fees, and hence the decsion to drop voting points makes perfect sense. If they don't have long term success, neither do we (domainers).

 

[equity78]

Nobody seems to have looked at the other calculations you can do with that sales number, and fewer assumptions. $1.1M in sales is $770K in gross sales after COGS, or $385K/year, or $32K/month. Assuming they are an S corp or LLC with no corporate tax obligation, that is a pretty thin number for a company with physical expenses such as rent and IT etc. They seem to have a budget for marketing in high CPC segments so that has to come from the gross as well. Then there are salaries, presumably at least a couple people making over $100K and the rest of the staff payroll and your done. They do business in California, one of the most onerous places in the world in terms of costs to an employer. In other words, they would seem to barely be profitable, if at all. Now what likely turns the corner for them is the listing fees, and hence the decsion to drop voting points makes perfect sense. If they don't have long term success, neither do we (domainers).

The other breakdown that matters is are the sales coming from Boxador where they keep 100% or from sellers ? I would imagine most of the sales up til this year were coming from Boxador.

I doubt anyone is making $100,000 salary working at BrandBucket.

 

[NameFit]

I disagree with this assumption. If you are backordering or registering domains, having only half of them actually accepted by BB, paying $10 ea for those that are listed, and then selling only 2% of those listed names a year at $2k with 30% of the sale lost to commission, then chances are you are not a happy domainer. The math doesn't work.

Should have been clear, 'ideal situation' for any domainer managing his names himself (2% at $2000 a pop). Anything less than that is not ideal.

 

[Brandworthy]

And that ties into one of the possible outcomes I see - that more small boutique marketplaces start to crop up as larger portfolio owners switch to a self-sale model.

 

[cocaseco]

I doubt anyone is making $100,000 salary working at BrandBucket.

IN LA as a professional, who works for less than that? Seriously that may seem like a lot in some places, but that's not even enough income to buy a house within an hour commute of their office. I would expect Michael, as a director, and Margo as the owner, both do. But of course we will never know.

And yes the number of domains owned internally is an important factor that greatly changes the model. Having effectively no COGS is the tipping point.

 

[cocaseco]

And that ties into one of the possible outcomes I see - that more small boutique marketplaces start to crop up as larger portfolio owners switch to a self-sale model.

Exactly. There seem to be more and more every day. I saw brandkart.com for sale yesterday and it has a potential. We should start a list of the smaller sites (in a different thread of course).

 

[Brandworthy]

I would imagine most of the sales up til this year were coming from Boxador.

I suspect most of the sales over past 12 months have come from Michael rather than Boxador, but Boxador likely also a top seller I imagine.

 

[equity78]

IN LA as a professional, who works for less than that? Seriously that may seem like a lot in some places, but that's not even enough income to buy a house within an hour commute of their office. I would expect Michael, as a director, and Margo as the owner, both do. But of course we will never know.

And yes the number of domains owned internally is an important factor that greatly changes the model. Having effectively no COGS is the tipping point.

I am not saying it seems a lot, or I disagree with you on the cost of living. I am saying that they probably run the business in a more telecommuter type way. Michael doesn't live in LA right, he lives in Nebraska I think.

 

[cocaseco]

Yep, that's possible and that's what i had assumed. Until recently when I heard some things that made me think they had an actual office. I think Julia is in Europe and last I checked their address was a UPS store mailbox. So it probably is.

 

[hookbox]

Yep, that's possible and that's what i had assumed. Until recently when I heard some things that made me think they had an actual office. I think Julia is in Europe and last I checked their address was a UPS store mailbox. So it probably is.

All of the Boxador companies work out of the Boxaplex in California.

http://www.boxaplex.com

 

[Paul]

Split into a separate thread: WHOIS emails from [email protected]

 

[London555]

2% turnover rate at an average of $2000/sale is a number that a domain seller any size portfolio would be happy with. The issue with brandables is that chances of end user buyer reaching out of their own are less - so there is limited exposure other than listing sites. That is just the nature of brandables. I still see lot of additions to BB and lot of them registered within past few months, actually weeks and many within days - that really dilutes the market in a way. If people think that they can just hand register the names today and hope to sell them at $1000 profit within few months - it is more of a wishful thinking in my opinion.

Sellers are creating competition among themselves without creating additional channels of sales. The dynamics for brandables marketplace will probably shift towards bigger portfolios because the occasional sales will let them stay, especially taking into consideration the investment they have done, while smaller portfolios with limited budget and resilience will probably opt out.

I think the bigger question is, have the norms and trends of domain industry changed? Is age no longer a relevant factor (when I say age, I do not mean 'per-se' but on the lines of quality)? Is there more of a trend towards these 'brandables'? Is brandability becoming a big factor now? When it was not? And people do not realize that is not the name that is brandable, but the underlying technology that is brandable. Good to have a marketable name at best - that is the scope of a domain name.

Excellent post-your last two lines are exactly correct-with Amazon as the prime example.

 

[pjb1978]

Something similar has probably been posted before, but I thought I'd chime in on my experience with BrandBucket, and why I will never consider using them.

I signed up for BrandBucket a while ago, and submitted a handful of names. Most were refused, but one was accepted. I was presented the option to pay the $10 listing fee, which I tried to do. My payment was declined, as paying them using a Canadian credit card is problematic. Got an email a couple of days later from a guy named Khalan asking if he could assist with payment, and offering to let me send paypal instead of using my Canadian credit card. After receiving this email I took the opportunity to read their terms and conditions, and sent an email to Khalan with a few questions.

I have 2 issues with their terms and conditions. The minor one is the exclusivity clause. If you list your domain at BrandBucket, you are forbidden from listing it anywhere else. No big deal.

My second issue is that if you request to have your name removed from the website, they will wait 30 from the date of your request to actually remove the name. I ran the following scenario by Khalan:

I list a name at BrandBucket. Sometime in the future an end-user who has never even heard of BrandBucket does a whois check and sends me an email expressing interest in buying my name. I sell the name to the end-user, and request that it is removed from BrandBucket. 2 weeks later (within their 30 day removal freeze) somebody clicks on the name on the BrandBucket site in order to purchase it. Since I sold the name to the BrandBucket oblivious end-user two weeks ago, I no longer have the name and obviously am unable to complete the BrandBucket transaction. What happens then?

Short answer, my account is flagged and removed. He did say that in that particular case I would be able to contact BrandBucket and negotiate a lower commission fee. For what? BrandBucket didn't help me with this sale (end-user found me through whois), so why should I pay them commission? Why would I have to pay them anything?

His exact reply is as follows (copy & paste):

The 30 day rule was implemented quite some time ago to prevent external sales which are prohibited for the duration of the BrandBucket listing. Though we would be happy to assist you in securely selling and transferring a domain at a discounted rate to a potential buyer, we require 30 days of advanced notice before a name can be sold or listed externally. We run a constant check to ensure that names have not changed hands, and pull offending names from the market to prevent the purchase of an unavailable name. However, if we discover that a domain has been sold externally without notice, the user's account would be flagged (as you mentioned) and likely terminated by our team.

My recommendation for anybody looking to sell on BrandBucket is to make 100% sure you are willing to turn down any offers from end-users who find you via whois, or be prepared to pony up some of the funds from the sale to BrandBucket. To me, this is bad business. You can't expect to hold your hand out and collect funds for something you had no part in. If the name sells on your platform, yes, you are entitled to commission. If your platform had nothing to do with the sale, I'm not paying you commission.

I've requested that Khalan remove my account, as I won't be using BrandBucket. I am happy to say that he did comply, and my account has been removed.

Seller, beware. Make sure you read their terms and conditions. If you agree with their terms, list away. If you do not agree, list your name on another marketplace that doesn't have these ridiculous terms.

 

[AndrewRice]

@pjb1978

BB spends quite a bit of money on marketing and advertising for their marketplace. There are buyers who will find the name through through the BrandBucket marketplace and then attempt to buy the name on a discount through Whois information. From BrandBucket's perspective, their marketing and advertising dollars were used to find the buyer, so they should receive a commission on any sale. It would be bad business for BrandBucket to market these domains for free.

 

[London555]

@pjb1978

BB spends quite a bit of money on marketing and advertising for their marketplace. There are buyers who will find the name through through the BrandBucket marketplace and then attempt to buy the name on a discount through Whois information. From BrandBucket's perspective, their marketing and advertising dollars were used to find the buyer, so they should receive a commission on any sale. It would be bad business for BrandBucket to market these domains for free.

Hi Andrew-then why shouldn't sellers be able to take the costs of any "rejects" submitted to BB right off the top of the sale (due to it being the sellers cost of doing business) and then pay the 30% on the balance. It really should work both ways. Thank you.

 

[Dominic Belley]

I don't understand all the fuss again about the terms.
It is not a secret to anybody, it is there, black on white clean and clear. We all know it.
If it represents a problem then simply avoid BB. There are a lot of other marketplaces out there.
Why complain and complain and complain on how a private entity is running his business.

 

[London555]

I don't understand all the fuss again about the terms.
It is not a secret to anybody, it is there, black on white clean and clear. We all know it.
If it represents a problem then simply avoid BB. There are a lot of other marketplaces out there.
Why complain and complain and complain on how a private entity is running his business.

Although I like your post Dominic, when someone posts here that they "know of two sellers with a combined 600 names with zero sales in the last eight months" I think sellers need to question the quality of their investments with BrandBucket. It's really no different than asking your wealth manager where your money is going-even though you have many alternatives in that arena also.

 

[Brandworthy]

I think sellers need to question the quality of their investments with BrandBucket.

In all fairness, absolutely no one is compelled in any way to list their names at BrandBucket. It's up to each seller to decide if BB is right for their names, and thankfully there's fairly open discussion here that should help sellers determine if the ROI is good enough for them. I still think BB do a good job of their core business, but it's always wise to appraise alternative channels.

 

[Dominic Belley]

Although I like your post Dominic, when someone posts here that they "know of two sellers with a combined 600 names with zero sales in the last eight months" I think sellers need to question the quality of their investments with BrandBucket. It's really no different than asking your wealth manager where your money is going-even though you have many alternatives in that arena also.

I understand, but we know that publishing on BB is like a 30-day contract. You can quit at anytime you want, but only after a 30-day notice.

If you rent a car for a 3-4 years contract .. or you have a cellphone plan for 3 years. You cannot break that contract without consequences. There are fees to pay if you do.

BB is no different. Either the buyer (acquired from WHOIS) goes to BB and you negociate a lower commission with BB, either the buyer waits 30-days and buy it from you after.