sales Why Are Companies Reluctant to Spend Money on a Good Domain?

[Whizzbang]

The last article on “Underpinning Domain Sales” sparked an interesting discussion on the domain forum, NamePros. One of the respondents asked the question, “Why are companies reluctant to spend money on a good domain?” In this article, I hope to answer that question.

In my opinion, the dominant reason businesses don’t spend money on domain names is because of ignorance. On the whole the domain industry has not been able to mobilise itself and communicate cooperatively to businesses about the importance of domain names. I’d like to unpack this a little further.

The biggest problem has always been the question of whom should put up the PR/Marketing money to generate interest and understanding in domains. Some people point to the registries, others the registrars while others say the current domain owners should all chip in. These discussiona often degenerate into name-calling and a lot of inaction.

What domain investors need to appreciate is that once they have purchased a domain name the registries and the registrars have effectively done their job. There is NO incentive for them to try and market on behalf of existing owners to increase the demand for already registered domains so the price goes up. That’s an almost impossible job.

The job of registries and registrars are to convince existing owners to renew and to get new registrations from wherever they can. On the whole, new gTLD registries have been excellent at selling their product to the domain investor constituency based on scarcity. “If you don’t buy this domain you’ll miss out like you did in the .com rush.”

Read More >

 

[Registry Services]

Wow, I guess you like throwing away money. If I had to spend $1,000/day to get $100...I would stop spending immediately. But you know what they say...there's a sucker born every minute.

If it doesn't make money, it's a hobby not a business.
Turnover is vanity, profit is business.

 

[frank-germany]

if my business is so successful the value of his domain goes up by 10x , I won't care any longer

you should as you don't own the .com

 

[frank-germany]

but like the man said, SME's are the vast majority of all businesses.

how much is the vast majory of what


how much is left over?

 

[Registry Services]

how much is the vast majory of what


how much is left over?

Don't you get Google where you are?

 

[frank-germany]

but like the man said, SME's are the vast majority of all businesses.

I said

if I earn 100 USD
out of 1000 USD spend


read my words properly

 

[frank-germany]

Don't you get Google where you are?

you got me bored

 

[Registry Services]

how much is the vast majory of what


how much is left over?

"Small businesses accounted for 99.3% of all private sector businesses at the start of 2016 and 99.9% were small or medium-sized (SMEs)" - for the UK


http://www.fsb.org.uk/media-centre/small-business-statistics

 

[Lox]

Math

10K for maggiepizza.com = 10 year investment = 1k per year = $3 per day

How many pizza's per day Maggie need to sell (extra sale) to cover the cost of .com = 1 pizza

How many (extra) delivery orders Maggie should expect per day = 2 pizzas

Sum = in 10 years, Maggie earn extra 10k

(maggiepizza.com hand reg. available)

 

[frank-germany]

Math

10K for maggiepizza.com = 10 year investment = 1k per year = $3 per day

How many pizza's per day Maggie need to sell (extra sale) to cover the cost of .com = 1 pizza

How many (extra) delivery orders Maggie should expect per day = 2 pizzas

Sum = in 10 years, Maggie earn extra 10k

(maggiepizza.com hand reg. available)

and still owns that great domain
Maggie can sell after retirement

 

[frank-germany]

"Small businesses accounted for 99.3% of all private sector businesses at the start of 2016 and 99.9% were small or medium-sized (SMEs)" - for the UK


http://www.fsb.org.uk/media-centre/small-business-statistics

do due dilligence for what they think a "small business" is

middle class at least in germany means pretty wealthy people

 

[Registry Services]

How many (extra) delivery orders Maggie should expect per day = 2 pizzas

I disagree that maggiepizza.com would get 2 extra orders per day over, say maggiepizzashop.com

 

[todaygold]

I disagree that maggiepizza.com would get 2 extra orders per day over, say maggiepizzashop.com

I agree with you. @frank-germany needs some help with that math. Pizza shops are local...you aren't going to get more orders because you have Maggiepizza.com instead of Maggiepizzashop.com.

 

[Registry Services]

middle class at least in germany means pretty wealthy people

generally, if you own the computer you type that on, you're in the top 5% globally, but that's not really relevant either.

 

[frank-germany]

I disagree that maggiepizza.com would get 2 extra orders per day over, say maggiepizzashop.com

if you promote
maggiepizza.com
you need to buy a smart car

maggiepizzashop.com
would need a station waggon

so thats makes 10K profit in uneccassary spendings

 

[Lox]

@Registry Services Virtually disagree or based on business real experience?

 

[Registry Services]

Maggie can sell after retirement

Chances are, in 30 yrs everything will have changed.

Remember - it only took about 5 yrs for dot-COM to go from unknown to must-have. Things can change very quickly in IT

 

[frank-germany]

Chances are, in 30 yrs everything will have changed.

Remember - it only took about 5 yrs for dot-COM to go from unknown to must-have. Things can change very quickly in IT

didn't .com start in the 80 s ???

 

[frank-germany]

symobilcs.com


"According to the site, it was registered 26 years ago on March 15, 1985. Symbolics Computer Corporation (a now defunct computer manufacturer) secured the doimain and sold it in 2009 it to XF.com Investments for an undisclosed amount."

 

[frank-germany]

its always better to be informed
and do due dilligence

before posting what you think is true

 

[Registry Services]

@Registry Services Virtually disagree or based on business real experience?

I've never run a pizza take out business - if your numbers are from direct personal experience I'd be interested to know.

But I have run various businesses and my experience is the importance of the on-line branding depends on the business context - for one a dot-NET was more important than a dot-COM, although we registered the dot-COM as a defensive registration.

 

[Lox]

Chances are, in 30 yrs everything will have changed.

Yes, true! maybe pizzapill.com is better.

 

[Lox]

from direct personal experience

Yes, from direct personal (in the past owned pizza & pasta take a way) and business experience. Implemented advertising strategies (Web, DTP, Radio, Social) and reorganization of management for only 17 pizzerias in two cities. Increased sales by 55+X, 230+X and 1000+X .

(pizza shops - this definition doesn't exist in the minds)

 

[Kate]

It's true that most end users don't need truly outstanding domains.

However, some are really making life more difficult than it should be. These are the real ignorant (in my opinion).

I have seen a lot of bad advice handed out by so-called web experts.

For example I had a client who once started a subsidiary in a European country.
So they registered the full company name in .com, but it was confusing because it had a triple S (imagine stuff like euro express score), not only was the name ugly and a bit long, but I suspect it generated a lot of misdirected mail too, because people have to actually type E-mail addresses sometimes ! And of course spelling an E-mail address over the phone is a difficult exercise, and even then the other party will still not get the name right half of the time.
See what I mean when I stress the importance of memorable (and easy to spell) domains.

I mentioned to them that the shorter version in the local ccTLD was available for regfee, and the .com was on sale for 2K. I have never lobbied for an aftermarket acquisition, but wanted them to consider options and do some more brainstorming but it's hard to 'educate' end users.

Bottom line: don't buy a great domain unless you have too. Don't buy a crap domain without exploring other options. It can cost you in the long run. Some companies could really benefit from an upgrade of domain name.

One thing to ponder: a great name is an asset that will probably appreciate over time, it can be sold later on, if the company ceases operations, rebrands itself etc. A crap name will just be dropped.
On the occasion I have met ultra-posh corporations with super-expensive offices in select locations, but poor domains and mediocre websites. Sometimes, I really wonder why end users stop being ambitious when it comes to their online presence. There is often a huge discordance between URLs and how the company projects itself in the real world.

 

[frank-germany]

I once adviced a google adwords customer for whom I run his campaigns
to buy his best and most expensive keyword.de

which was for sale at €1700 at the time

so he told me that he will be broke if he would perform those kind of deals

( and he was paying for this keyword several thousand per month at adwords - great keyword for him )
and it would have been the by far better companies name


about a year later the keyword.de sold for €5700 to somebody else

 

[frank-germany]

One thing to ponder: a great name is an asset that will probably appreciate over time, it can be sold later on, if the company ceases operations, rebrands itself etc. A crap name will just be dropped.

if you can pass this message to the potential buyer
you have a much easier life as a domain seller

and its true by the way