Domain Development

Would you buy a kit car?

By September 4, 2010 February 27th, 2017 4 Comments

Morgan Linton had a good post this week about the Domain Dream changing.  This morning “Steve” had a very insightful comment.

Here is what Steve said:

Its very simple, 90 % of current domain sales are Domainers to Domainers. Why? Because we can understand the potential value and the only way to increase values is to Develop them into websites, so end users can see the value. Who has the larger share of the market ? Kit cars or factory-made cars ready to drive away? Its that simple.

Steve is right!  This image below perhaps makes Steve’s point even more clear:

The fact is that most end clients or entrepreneurs have no interest in building a kit car.  They don’t want to learn PHP, Mysql, WordPress, Joomla, Linux, or whatever technologies you care to mention.  Anyone who has tried to develop a website and make a go of turning it into a profitable venture, knows that it is not easy.

I speak almost every day to someone who has the equivalent of a partially assembled kit car sitting in the garage.  Some of them are enormous names.   For example, last Tuesday, Epik released ETF.com.  We are really excited about it.  When we got it, ETF.com was a partially assembled site that did not even resolve!

For anyone who had a dream or a vision when they originally acquired a domain, my advice is simple: find someone capable of finishing the job.  If it were me, I would certainly pick Epik, but if you can find a capable developer who can help you to Develop, Operate, and Sell the finished product, now is the time to Shift out of Park.

On September 16, David Fairley of Website Properties will speak at Epik DevCon.  Dave has sold a lot of developed websites, and will provide perspective on the difference between selling an undeveloped domain and selling a developed website.


Join the discussion 4 Comments

  • Morgan says:

    Great post Rob and thanks for the mention! What Steve said is so true – one of the best analogies I’ve heard yet!

    Enjoy your weekend! 🙂

  • Richard H says:

    This analogy doesn’t mash very well as domainers get a car kit and rarely try to develop it, they just keep on reselling the kit-car to one another…

    Some domainers may decide to ‘develop’ the car. Of course the development is average at best, and may be nothing more than a ‘mini-site’, or in the kit-car analogy, the domainer would just screw in the steering wheel to a random location like the boot and then try to sell their kit-car as the finished product…

    • Rob Monster says:

      @Richard – That was the point really. Development is the direction but indeed most domain owners would be better off partnering than even attempting to build the finished product. For one thing, it is harder than it looks! For another, end clients prefer to buy from a known quantity. There are more reasons why buyers would want to buy a finished product from a known supplier but you get the idea.

  • I believe a better analogy would be that of the domainer trying to sell vacant property versus selling a three-bedroom two-bath home someone could live in. What percentage of real estate transactions are land sales versus home & condo sales? On the other hand, building a home is a lot more involved and requires a great deal more capital than leaving a lot vacant and waiting for a buyer. Try building 50 homes and the capital outlay multiplies quickly.

    Now what happens if the potential buyer is a business looking for commercial office space or retail mall space? That home might generate rental income but the business cannot use it because it cannot be used to promote the sale of their products and services. So the value to the end user is far less than the builder/domainer would have hoped for because the development wasn’t designed specifically for that business. However, the domainer/property owner would have more negotiating power because the property generates rental income. The question is how much rental income is being produced? With developed domains, if the property isn’t positioned on page one or high on page two of a major search engine, the income will be negligible despite having invested in building out the property.

Leave a Reply

Translate »