Master stroke or just mad to turn down a $57,000 profit!

bulb.jpgHappy days indeed, I mentioned on Friday’s roundup that I sold a domain and had to travel to do the deal, I have to say that although I am not a domainer and prefer to buy domains to develop thus greatly increasing their value, I did enjoy this experience!

For those long time readers you may remember last July when I commented on my discover of led bulbs from the New Scientist in a post about getting ahead of the game. The fact of the matter is that even when you come across future technology chances are someone had reg’d the domains before you, which they had.

You can still make good investments from buying from domainers and domain owners, ledbulbs.co.uk cost £675 ($1328)  after some negotiation. Once I had that secured I always like to try and cover myself with the next best if possible so contacted the owner of ledlightbulbs.co.uk which I had to pay £1000 ($1967) for and it came with ledlightbulb.co.uk

I am pretty sure many people would have baulked at paying £1k for that pair last year but I was very sure of the investment.

LEDMy plans were always to develop and then possibly lease later on and as you can see from a recent post led bulbs is doing just fine and my plans to lease a domain and increase it’s value were in place for a later date, I had just pencilled in developing ledlightbulbs.co.uk into a website when I received an offer of £2000 for the pair ledlightbulbs & ledlightbulb last week. That would have netted a 100% profit and left me with my the website & domain that was ranking so tempting opening offer and no loss of income.

I decided to counter with £15k for the pair and within 30 minutes by email we came to an agreement at £10,000 for ledlightbulbs.co.uk with the singular version thrown in with it which works out at a £9000 ($17,000) profit, as the buyer was down the road from me we decided rather than using escrow I could drive down to pick up the money and hand across the transfer forms.

These guys are smart and will be going into the led market physically importing the goods so it was an excellent meeting on more than one level, as I still own ledbulbs.co.uk and get enquiries through it I now have someone I can forward my enquiries onto who can complete orders and cut me in so in the long run that could be more valuable than the initial deal.

What was quite surreal was sitting there and being asked if I would also sell LEDbulbs.co.uk

  • Me- I would rather not as it is a few years before it’s true worth will be realised
  • Buyer – How much do you want, you must have a figure, I’ll give you twenty thousand pounds!
  • Me – Thank you but I’d rather hold onto it for now
  • Buyer – OK how about thirty thousand pounds?!? ($59,000)
  • Me- Sorry, I would be looking for 6 figures to cash out completely from the potential that is there.
  • Buyer- No, it is probably worth £25-£40k but no way 6 figures
  • Me- I understand that, I am not saying that is the value of the domain, I am saying that is what it would take for me to leave the led market right now and cashout my domain which ranks.
  • Buyer- Understood, ok then perhaps we can have a relationship wherby you put leads on to us and we can compensate you through all orders we complete.
  • That sounds like a great idea.

Now I have already spoken to a few people who feel I was mad to turn down £30k for a domain that cost £675 less than a year ago but as I have said before, I am not a domainer, the domain ranks and generates leads – it is now much more difficult to put a value on a good ranking domain in a market that should be booming in 2 years time, more than that I always fear that if I sell my best assets then replacing them will only ever get harder. It’s a risk but one I am willing to take and in the meantime I still managed to drive home on Friday with £10,000 a good job well done I’d say.

Also just wanted to add in a link to Nick’s post on how an online business is better for you, which nicely relates to this deal and how the risk versus reward can really be worthwhile online.

About Scott Jones

Scott hails from the north east of Scotland and started earning online at the end of 2000 building websites for local businesses during which time he won an award from Lord Alan Sugar for Excellence in Enterprise. After having quite a bit of success with domaining Scott mainly runs educational evergreen websites which generate over 3 million visitors per month but is always on the lookout for a fresh thinking out of the box way to turn a buck. Follow on Twitter.

Comments

  1. Hi Scott

    Very impressive, nice profit you made there on the one domain.

    Personally I think you did the right thing holding onto the LEDbulbs one, if the guy was offering you £30,000 there and then, it is going to be worth a fair bit more in the future.

    🙂

  2. Awesome, just awesome. What part of the Uk are you in?

    Based in Manchester here.

  3. If LED bulbs do become the future dont you think that they might just be commonly known as “light bulb” . As is what happens with most new technologies that replace old. An example would be with televisions. When plasmas and Lcd tvs started arriving in homes people used to say plasma tv lcd tv. But now ive noticed most people just refer to them as televisions regardless of what they are.

    • It would be some time away before I feel that would ever happen, plamsa tv’s, lcd tv’s etc are still very much distinguished by their full names as the technology changes pretty quickly in that market – however I would agree that maybe in 5-10 years if led’s go as I think they will then eventually they may be commonly called bulbs, however there will be a huge multi million pound market in them between now and then with people specifically searching for led bulbs.

      • I was hunting around recently for LED bulbs on google. I think there are a good few years left of them being called LED bulbs rather then light bulbs.

        Well done in holding on to the domain. Nice investment.

  4. Scott, congratulations for the sale. You must have great confidence in the domain & the possibilities to let that one go. I would have never said a domain in a in a niche like that could go that high… But I guess sometimes if you find the right buyer, you can get a great deal. As said, congrats for the sale. 🙂

    • Cheers Jav, yes I think there are going to be more and bigger opportunities in the UK market in the next year or so. Low risk for high reward.

      • I should definitely look more into that. I am Spanish & I think there are some great opportunities in the domain business in Spanish since there is still good availability .. I have noticed that you normally like to buy country tld’s “co.uk” rather than general tld’s such as com’s, net’s & other similar. Why is that so? I often have that doubt when buying a domain for my Spanish sites. How much do you think you could have gotten from this sale if it was a .net or .org domain?

  5. Hi Scott, congratulations on a great deal. And always useful to know that there is an interested buyer in the wings when you do decide to cash out.

    Do you think the value of ledbulbs.co.uk is just in the domain name or was it a combination of name and your number one posiiton in google?

    If the domain had just been parked how much do you think you would have been offered?

    • Certainly huge value in the ranking, if it was just the domain I may have sold it, £30k is not an insignificant amount of money to myself so it was no easy pass, I am no millionaire but thankfully I am comfortable enough not to need the cash at present, however I firmly believe that at least partially developed and ranking no.1 means that you can write your own cheque to an extent when the time is right if you dominate the right niche.

  6. Congrats on the deal and I’m with you turning down that 30k offer.

    It’ll only get better.

    Cheers

  7. Wow … Congrats on a very good deal.

    I need to spend less time on this blog and more time trying to dig up the “next” big technology and registering domains 🙂

  8. I also think you did the right thing by declining the offer. However, £30k really is an amazing sum of money.

    I hope it will work out just fine with the domain 🙂

  9. Nice sale of the pair of domains and I also agree I think you made the right choice to keep ledbulbs, if they’re willing to offer that amount of money now, it shows how valuable they believe it’s going to be in the future!

  10. I guess you’ll get different opinions here, but I’d have been “really” tempted to cash in.

    You must be projecting a healthy cut from the led bulb distributors.

    • I was tempted Ian, but I feel I can get a lot more from sales and an eventual end sale in perhaps 3-5 years time, time will tell and it is a risk – if I ended up selling the domain for £5k I’d look back at this post and cringe but that’s life and I am prepared to make mistakes, always have been and often have.

  11. I have a hard time imagining that you’ll be able to pull in that much from good leads in any reasonable amount of time. I have to say, I would have been inclined to just sell the domain, and use some of the money to invest in new sites!

    • Partly leads + sales, more so having the domain placed top ranking and ready in 2 years time as the UK gov phase out incandescent light bulbs, also energy efficient bulbs have had a lot of bad press so the market is opening up ready for led’s – I think selling near the start of the large peak will get me a better return rather than selling too far ahead of the curve, but I understand your comments and why many will think it would have been better to sell.

  12. I’m very enjoy to read this content.
    Thank you for good information 🙂
    I ‘m coming back to read more content.

  13. Thanks for sharing your experience with selling a concept domain and holding another. It must help knowing you have a good base of sites to back you up, since I am still struggling to earn even a basic income from my sites I have often thought about what prices I would sell certain domains I have. I am quite certain I would not have held on for their higher offer since that would allow me several months to get my feet on the web so to speak. If what I was reading in the comments above is true, then even if LED bulbs does not do as well you are nicely hedged with tvs.uk.co since this one would not fall out of favor in a few years time 🙂

  14. Hi Scott, congratulations on the deal, especially as it was with someone so close. I keep hearing a lot of good stuff coming from Scotland, what do you guys eat/drink over there! lol

    BTW, is having the keywords, “led bulbs” in the domain for ledbulbs.co.uk a major factor in it ranking highly? would it take longer to do if it didn’t have those keywords?

    • 🙂 Cheers Lukep, yes having the domain as the keyword helps a great deal, if the keyword is competitive it can take 2 years to rank well on another domain but with the domain keyword that can be over halved so very valuable for ranking and also desirable for an end user.

  15. Hi Scott and thanks for great inspiration in this post! I’ll be hanging around here if you dont mind! 🙂

    Just bought a handful of danish domains along the line that you have written about here and we are talking sets of like 6 (led-light, ledlight etc)
    Now, how would you suggest redirection from the 5 domains to the one I will put content on and do seo on? 301’s or 302’s for those 2-3 years before the domains/site is sold?

    • Nice one Anders, personally I forwarded the other domains on to my main site, concentrate on ranking one at the top and make sure the others are not dead so forward them on in case they are manually checked – you could 301 them to be safe but sometimes I don’t bother as they don’t get indexed or lnked to. I wish you every success with them.

  16. Thanks!

    Reason I asked is that I am not sure if it is easy to wake up a domain that has been 301’ed for 2 years – wake up in the search engines I mean. Probably you’re right though. I’ll try the 301’ing.

  17. Thanks for that Scott, will definately be buying keyword rich domains from now on.

    Would you say this is competitive in google for a domain keyword: 8.4million normal results and 15,600 results with quotation marks(“”)?

    What would you say is low compeition or easy to rank for competition?
    Any quick methods of getting a domain keyword ranked high in google for a low competition keyword?

    Keep up the good work!

    • It really depend on how strong the top 10 sites are, whether there are 8 million or 2 million results. Usually if it isn’t too competitive ytou only need a few good quality links and some time/patience.

  18. Thanks for sharing.

    What kind of contract did you have drawn up….Was it a gentleman’s agreement or did you go through a uk solicitor?

    Cheers, Greg

  19. Maybe we should all be targeting Scottish investors – seems to be where the money is for domain names!

  20. Hi Scott,

    Long time no speak.

    Congrats on the sale and sticking to your guns for the long term on ledbulbs.co.uk

    I hand registered ledlightbulb.co.in, ledlightbulb.in, ledlightbulbs.co.in & ledlightbulbs.in in August 2007
    (Why the heck I didnt get the ledbulb/s versions I will never know LOL)

    I agree it may be a few years before these domains see their true potential being reached, but I am also in the process of development for them in the Indian market place and think they will do well long term.

    Perhaps we can have a chat sometime.

    Regards

    Ed Keay-Smith
    http://www.ozdomainer.com

    Ed Keay-Smith’s last blog post..Traffic DownUnder coming up fast.

  21. Ed, I got ledbulbs.in and ledlamps.in (what a fight to get that registration to work in India.)

    Did not start development yet.

    You are welcome to contact me if you have any ideas or just want to exchange thoughts.

    Hope to hear from you.

    /Anders
    http://www.saugstrup.org/kontakt/

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