Why build on a category killer generic domain?

MoneyIf there is one lesson I have learnt and one thing I would do differently it would be to do whatever it took at the start to acquire the prime generic domain for my niche.

Having the generic domain holds a lot of value in itself, value that increases year upon year, add that to developed website and you become more than the sum of your parts, a successful site on a prime generic domain is not the sort of thing you see on Sitepoint often as they are private deals done by big players.

CruiseWhy did cruises.co.uk sell for over half a million pounds?
– Not only is it a prime generic but it was part developed and ranked number one for what is a very affluent keyword, selling the domain without that ranking/traffic would probably have brought the price down to possibly around £50k – £120k.

Having that no.1 ranking on a website called cruises-in-the-uk.co.uk or the like would be valuable but would never reach a premium price on a sub standard domain – any potential buyer would know the site would be worthless without its free traffic and rankings.

Put a good rank on a great generic domain and you can more than double the value of the individual parts.

If Al had his site on the domain gadgets.co.uk or I had my site on the domain tattoos.co.uk we could both be sure to

1/ Have received more offers to buy us out in the last few years
2/ Have had something worth more than the sum of it’s parts dominating their industry and make for an easier end sale for a much bigger payday if that was an aim.

DoubleSo if I had a time machine, in 2002 I would have begged & borrowed to go back and secure tattoos.co.uk for whatever it took – I know one thing, just like cruises.co.uk seemed an expensive buy at £95k in 2006 it now looks cheap from where I am standing.

More and more people are moving into town, the big players are buying up land faster than ever and are HOLDING it making the market for prime generics smaller and smaller, prices are squeezing and finding a good deal is getting harder, but we are still here at the dawn and there are still great domains for sale at reasonable prices even if that means financing in the short term, if you plan to save up for a good domain by the time you save up they may well have doubled in value.

I was offered a really nice clothing related .com just over 2 years ago for $20,000, it was aged and ranking as well but not really developed – I didn’t have the funds at the time and had to pass – I emailed him this week to see if I could still buy it – the price is now $50k, I could have borrowed $20k 2 years ago and probably have had it paid back through development but I chose to wait and the market moved, now I don’t have $50k to burn on a domain and I am kicking myself. Lesson learned, but it’s not where I failed that I dwell on now – it’s what I do from here.

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. But Scott, I can’t help thinking that you said you didn’t have 20K back in 2006 and now the price is up 150%.

    Again you are saying you don’t have the 50K, but what if you will write a similar post in 2010 where you see that the domain is up another 150%?

    I know it is a lot of money so don’t get me wrong. But waiting will never get you anywhere and I’m sure you have the skills to increase the value more than the 150% if you wanted to.

    • I was about to write the exact same comment 🙂

    • I am letting this one go Mikael but on another one I am buying I am borrowing interest free in the short term – buying one today for $12000 which will go on a credit card and then transfer the balance to another card (interest free) while I clear it over the next 6 months.

  2. There are a few things I wish I had/hadn’t done online over the last few years, but I suppose we live and learn!

  3. Yeah, I’ve thought often about this. I have a number of domains I would love to go back and snag. Good ol’ hindsight

  4. I understand Scott. You can’t have them all and some will have to go. If I had know what I know now I would have bought a lot more property and land. If I could go just one week back in time I would go for the correct lottery numbers *LOL*

    I guess we’ll just have to look forward 🙂

  5. We always loose opportunities because we do not know what is going to happen. The important thing is to learn from it and I think you have done quite a good job at it.

  6. One thing to consider on buying premium generic domains Scott, is that in buying these type of domains you’re potentially opening yourself up to legal challenges. If you’re spending five or six figures on a domain and a large corporation takes a shine to your shiny new generic domain, they can make things difficult via UDRP, or DRS proceedings (even if the challenges aren’t perceived to be credible – there are lots of odd arbitration decisions out there) whereas this isn’t the case if you buy a non-generic domain that you can essentially brand to be yours and only yours…

    • Very valid point Mike, I’m probably guilty of not considering that enough due to the fatc I have never been invlolved in such cases, thankfully I develop rather than park so should have that in my favour but it’s always a risk in this business.

  7. Very good writeup. They are right, the price still might be right for the picking at 50k. Perhaps you could haggle them down.

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