domain-name-value

What a good site is worth

You hear people talking all of the time about the value of a great domain name but surprisingly not many people really get it.  So when I came across this article from Inc. Magazine I just knew I had to share it with you all.  I knew this would help explain so perfectly why a single website, with a great name and the right idea can be huge and that anyone can do it.  Well anyone who can get their hands on one of the few parked gems out there like this guy did. 🙂

If you are curious what your domain name is worth and don’t want to buy a professional appraisal you can always use these automated domain name valuation tools just for fun.  They aren’t exactly 100% accurate but they are free and do give you some general idea if you have something of interest.

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What a Killer Domain Name Is Really Worth

[source] Serial entrepreneur Jesse Stein bought the domain SportsMemorabilia.com for $12,500 and turned it into a $19.5 million retail business.

When Jesse Stein first purchased SportsMemorabilia.com in 2006, it wasn’t much more than a parked domain with sponsored links netting its previous owner a couple hundred dollars a month. In just six years Stein turned it into a recognized retail brand with more than 450,000 products from across 13 sports–taking in $19.5 million in 2012 and earning a three-year growth rate of 270 percent.

Indeed, his Coral Gables, Florida-based SportsMemorabilia.com is one of the companies vying for a spot on the 2013 Inc. 5000. As applications arrive, we thought it would be worthwhile to shine a spotlight on some of these fast-growing private companies.

Stein, a serial entrepreneur and Wharton graduate, was inspired to buy the domain after attending a Las Vegas conference that suggested there was money to be made in e-commerce sites with “category killing” domain names. Stein began pursuing some 200 category-defining domain names–such as hobbies, biking, and boating.com–with the hopes of turning the ones that showed potential into e-commerce empires.

SportsMemorabilia.com was the first one of these killer domains that looked promising, so Stein purchased it for $12,500 and set about transforming it into a fully functioning website where customers could buy authentic, signed sports paraphernalia.

“I bought it and then realized that I know absolutely nothing about sports–and that was going to be a serious problem,” says Stein, who brought on Stefan Tesoriero as CEO and became the non-executive chairman of SportsMemorabilia.com. Tesoriero had extensive sports marketing experience with the New York Islanders.

“I’ve always had this policy of hiring people who are much more talented than I am and then stepping out of the way,” Stein says. “So I gave a very significant slice of the equity to the top 10 executives, and basically said, ‘Guys, this is your business now. Run with it.'”

Stein realized that his competitors in the sports memorabilia industry had not yet woken up to the reality of the Internet, and with background in SEO, he instructed Tesoriero that the first step for the company was Google-rank dominance over its competitors. But rather than pursuing the typical metadata strategy, the company went for something more organic.

“We started the company by creating content that was meant for actual human consumption–not just stuff that was meant for Google,” Tesoriero says. “We researched the memorabilia industry and wrote articles on the various nuances of collecting and athletes. I conducted a lot of interviews with fan sites about products, players, and what people were looking for at the time. People starting linking to our content and Google started to give us credit and rank us accordingly.”

During this process, the company began building relationships with vendors and producers of signed memorabilia–something that Stein said came very easily with such a category-defining name. SportsMemorabilia.com would index the inventories of their vendors on their website, and the company and the vendor would get a cut with each purchase.

In 2011, the company began purchasing and storing its own merchandise in-house. But Stein says that, where its competitors get obsessed with athletes and memorabilia culture, SportsMemorabilia.com makes its purchases based off of complex forecasting analytics. For example, it’ll buy and store say 50 signed Kobe Bryant basketballs for the first quarter of the year because its algorithm has predicted that 50 is the most likely quantity the company will sell in that given timeframe.

“The trouble with our competition is that they fall in love with the athletes and the memorabilia and it clouds their vision,” Stein says. “We’re removed; we’re totally agnostic. We’re based in Florida, but we love the Lakers just as much as we love the Heat.”

What a good site is worth