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Domain Farming: Three examples of creative domain development deals

By May 4, 2010 February 27th, 2017 6 Comments

In my recent discussions with domainers from around the world, there are a few recurring patterns. One of the patterns is that many domainers are “long on domains and short on cash”.  This creates a challenge for domainers with large portfolios who cannot possibly fund development of all of their development-worthy domains. In times like this, it pays to think like a farmer.

I was supposed to be a farmer
My maternal grandfather — Klaas Kornelius Meijer — was an important person to me growing up.  “Meijer” as they called him in the Northern Dutch town of Kommerzijl was a quality guy by any standard.  Meijer was a farmer. And as you can see below from the family photo archive, I was supposed to carry on the tradition.

klompen
Although I did not end up taking over the family farm, I did learn a lot about farming, spending most summers as a kid working on my grandfather’s farm.  I even studied Agricultural Economics as I tried to reconcile the family expectation to become a farmer, and a personal bias towards entrepreneurship and business.

So what does farming have to do with Domaining?
Farming of cash crops is not all that different than raising young domains. If you think about it, Acquire, Develop, Operate, Sell is a near cousin of the farming equivalent of Prepare, Plant, Fertilize and Harvest.  This is a gross oversimplification of farming but there is a method to growing things with scale, and that includes websites.  As with farming, it can be learned.  However, most domainers are still merchants — they can buy and sell, but most have little interest in cultivating.

Although I have no idea whether farmers are good candidates to become domainers, I do think there are a few traits that make them suitable to the role, particularly now that the technology is no longer the hardest part. Legend has it that one of the industry’s most successful domainers, Scott Day of Digimedia, was a watermelon farmer before becoming a full-time domainer.  Scott assembled a great portfolio, and has methodically gone about adding value to his domains.

As with farming, one can’t be an expert at growing everything.  Yet, domainers will collect all manner of domains that have little to do with one another, and perhaps even less to do with one’s personal core competencies.  Right now, Epik is very good at developing Product Portals.   I believe we will soon be very good at developing video portals, directory portals and geo portals.  We are not good at adult, gambling or music.  We have aspirations to become good at travel portals and biography sites.

Ruilverkaveling
This is a fancy Dutch word for a practice that farmers did to exchange land with each other in order to assemble larger contiguous parcels of land.   This was needed particularly once farming became industrialized. Farmers needed less physical labor because they invested more heavily in equipment. However, in order for the equipment to make economic sense, they needed to work larger contiguous and symmetrical parcels of land.

ruilverkavelingSo farmers would swap land — sometimes with government “encouragement”.   Through this process, landowners got continuous parcels and became more efficient in their ability to work the land with large pieces of equipment that did not need to go onto the public roads in order to get from parcel to parcel.  Aside from the short-term gnashing of teeth by individual farmers, it usually worked out for everyone because productivity went up. And when it came time to sell their land, the farmers usually found that the assembled parcels were worth more.

It worked for farmers — Domainers can do this too
One of the big challenges the Domaining profession faces is that large number of non-contiguous domains are owned by domainers that don’t know each other. This creates a challenge for anyone trying to assemble related portfolios. For example, if Epik can assemble the top 50,000 product categories into an integrated portfolio, the whole portfolio becomes worth more. In the process of assembling the pieces, it is very possible that a portion of the web also ends up working better than it did before. That is an ambitious idea, but not a crazy one.

Ultimately there will be further specialization within each major category.  For example, within the category of Product Portals, Epik has clients who are assembling different portfolios. Kenny Hartog is developing shoe and garment domains. Morgan Schwartz has been developing kitchen appliance and baseball equipment domains. Tony Lam has been developing furniture and medical equipment domains.  Avi Sacajiu has been developing jewelry domains. Etc.

Time to think creatively
Getting the web to work better will require some creative deal-making among domainers who have different objectives. In our own small way, Epik is doing deals.  Here are a few illustrative examples from the last 24 hours of creative deals done with individual domainers who are making the jump to development.

  • John Slaney:  John has way too many names to develop.   We came up with a creative deal that works for him and works for us.  He had a list of 4 names that he wanted to develop Pet-Tracking.com, Foldable-Bike.com, DetoxFootbath.net, and Candy-Bouquets.com. Rather than pay $249 per site to develop them, he offered up a portfolio of 12 names: bridesmaid-dress.com, babyfeedingproducts.net, birthstone-jewelry.com, arteasel.net, dog-jewelry.com, baby-bracelets.com, coppermailbox.net, graphictablets.net, tile-floors.com, gaswashers.com, office-lamps.com and glassdesks.net. All of these met our criteria for exact search volumes.  The net result of this cashless trade is that John will have gone from having 16 names that were costing him an annual reg-fee to maintain, to having 4 developed websites that will be income-producing and can then be sold as developed websites. Win-win.
  • WeiWei Zeng and BeerCoolers.net:  WeiWei wanted to start developing on Epik. He also makes a living buying and selling domains.  WeiWei and I came with a deal that made sense for both of us.  WeiWei sold me a portfolio of 5 domains in exchange for $600 plus the right to develop one of his domains — BeerCoolers.net.  That development would have normally cost him $249. So, for $849 in cash and in-kind, Epik received these: motorbikejacket.net, golfballmarker.net, workoutball.net, dashboardmount.com, and travelshoulderbag.com. We’ll have WeiWei’s new site up in 3 weeks. Win-win.
  • Craig Peterson and Chat-Rooms.com:  Craig already has a few developments being built on Epik. He is also one of the nicer guys I have met since launching Epik.  Last week, he surprised a few folks by buying the domain name Chat-Rooms.com.  That is a big domain that requires a pretty large development to execute on. I estimated a $20K development budget to build and launch a chat network across the Epik ecosystem. Since $20K was a pretty big nut, Craig offered up a domain of his that he did not plan to develop — UltrasoundMachine.com. Win-win.

The net of all these 3 deals is that we now have the following domains available for others to develop:

Domain Appraised
Value
Ad Competition Avg
Cpc
Search
Volume
ultrasoundmachine.com 55,000 low 4.40 9,882
motorbikejacket.net 160 high 0.69 49,410
golfballmarker.net 1,300 high 1.18 18,056
workoutball.net 930 high 2.22 4,392
dashboardmount.com 7,400 low 2.08 2,318
travelshoulderbag.com 620 high 1.55 2,318
bridesmaid-dress.com 140 high 0.51 110,410
babyfeedingproducts.net 1,500 low 1.82 22,082
birthstone-jewelry.com 180 high 1.55 18,056
arteasel.net 3,400 high 2.22 14,762
dog-jewelry.com 140 high 1.23 12,078
baby-bracelets.com 100 high 1.19 9,882
coppermailbox.net 3,700 high 3.66 9,882
graphictablets.net 1,800 high 2.61 9,882
tile-floors.com 660 high 2.09 8,052
gaswashers.com 1,800 medium 1.79 475
office-lamps.com 120 high 2.60 5,368
glassdesks.net 890 high 2.63 12,078

Most of the acquisitions are product portal names that will either be developed by Epik, or by others.   UltrasoundMachine.com is a great domain but not in our immediate sweet spot.  The Estibot appraisal is a whopping $55K but it is worth less than that to me which is why I would happily swap it for a solid portfolio of Product Portal names that I know how to develop and monetize.

Want to make a creative deal? Contact me at rob -at- epik.com.

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