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Every now and then, a domain name transaction comes along that sends shockwaves through the domain community. For example, in the first half of 2024, three domain name sales met this standard, in response to DN JournalThese included the sale of Rural.com for $550,000, the purchase of TP.com for $1.2 million, and the record-breaking acquisition of Gold.com, which was acquired for a staggering $8.5 million.
I cannot inform you how excited I was when I discovered that the three-letter, ultra-premium domain name I wanted was available for purchase. In my case, it was VPN.com, which I initially bought for 1 million dollars in 2017 in an acquisition that might change my life endlessly.
With the advantage of hindsight, and after successfully handling a whole lot of domain name transactions, I can offer some necessary advice to anyone trying to join the seven-figure domain name club.
Only fools rush
Making a big purchase is exciting and sometimes it might probably create a fog in our minds when we are so excited. It’s almost like that pleased feeling you get when you know you’ve got found a latest automobile that to want to purchase and are ready to finish the transaction.
First of all, it is necessary to take a deep breath and give yourself time.
- Large domain name purchases require some vetting. So, you’ll need to take the time to learn more about the domain, its history, traffic volume, and built-in search engine marketing advantages, ownership, etc., well before you make a decision.
- Some domains may come with attached mental property (IP) that you may use to your advantage, which is often included in the sale. It’s price asking about this and ensuring that if so, these attributes are clearly defined in the purchase agreement.
- Consulting with the right attorney is key, especially if you intend on writing a seven-figure check. So don’t look back on having to spend the money to make sure your deal closes in a way that can profit you the most in the long term. It’s money well spent.
Your broker matters
Who you select as your broker is of the utmost importance. Not all brokers are created equal, and greater doesn’t necessarily mean higher. Because these brokers have cut their teeth in this industry, having an experienced broker on your side to represent your interests in the acquisition is necessary from the very starting.
- Brokers understand all the nuances of those transactions and have the experience vital to enable you to complete them on time—without missing any necessary details that would adversely affect your timeline or final consequence.
- Most brokers use trusted legal advice and industry standard contracts and escrow services to streamline the means of raising and securing funds during transmission.
- Many domain name brokerages also offer “Stealth Domain Name Acquisition” services, which essentially shield the identity of the buyer (and sometimes even the seller) so as to add an extra layer of privacy to large transactions. This is especially necessary for latest enterprise-level brand launches or protected celebrity deals.
It’s like buying digital real estate.
Spending seven figures on a domain name is akin to purchasing real estate in the digital age. These domains already have proven, immediate value propositions. And in most cases, many of them will proceed to understand in value over time. Of course, some are investments in a brand or future brand—like the one you discover at Gold.com, which, after a quick Chrome search, mechanically redirects you to a well-known bullion dealer’s brand name.
From this domain name example, we are able to deduce that the company that acquired this domain name knew that the traffic coming to them was so invaluable that they simply wanted it to be redirected to their homepage – and were pleased to spend over $8 million in hard US currency to make sure that happened.
There’s a good likelihood this domain name won’t ever depreciate in value, and the latest owner will generate a significant increase in revenue as a direct result. These are two impressive moves in the domain playbook that we are able to all learn from.
There are legal issues to think about along the way
As you’ll expect with any transaction of this size, there are some legal issues to think about along the way. While you’ll all the time need to hire a lawyer to reply your questions, and no two domain transactions are ever the same, there are a few things to think about.
Will you buy the domain yourself (which is generally not really helpful) or will you employ a company or brand to buy it for you? Generally speaking, you’ll want to purchase a domain name that is protected by a limited liability company (LLC), but the best advice you’ll be able to give on this is from your attorney.
What asset protection measures do you intend to implement? While it’s never a nice thought, it’s price planning for all the potential variables that will arise, including securing your domain in case of divorce.
Do you intend to maintain and sell the domain, or use the assets to draw latest traffic and increase value? Your decision may impact how you select to accumulate your domain, including, as mentioned earlier, considering a stealth domain name transaction.
What other questions might you have before finalizing a transaction that it’s best to seek the advice of with a qualified attorney about? Take a moment to create a detailed checklist so you’ll be able to proceed with confidence knowing that each one necessary questions or concerns have been satisfactorily answered in advance.
Start using your latest asset to generate revenue from day one
I acquired my domain to be the face of my latest company. I knew I could leverage its value and potential from the first day I owned it. Knowing this gave me ample time to create a unique value proposition and a roadmap for my large-scale transaction. It also gave me ample time to work with a talented web development team to create invaluable web sites in stages that I could refine and prepare to launch immediately after acquisition. Looking back, I cannot emphasize how critical this forward-thinking approach was to achieving my end goals.
Having this data and a timeline well in advance helped me secure the seven-figure domain name I wanted while executing a rigorously designed motion plan to maximise impact. In retrospect, these are the five most significant elements I considered on my journey to accumulate a million-dollar domain.
For me, buying a domain for a seven-figure sum really modified my life endlessly and for the higher. If you are taking the time and make a smart move about your next domain purchase, it could bring you a similar result