Business > Merchant Voice

A tale of two domain purchases

We’ve all been there. We have a great idea for a company and we log on to a domain registrar. We type our dream domain name, hit enter, and bam. Someone is sitting on it, doing nothing. We try a few other permutations and they’re already taken, or worse, the names are terrible.

Where do we go?

I’ve bought only two domains over the years, both on the secondary market. I paid $25,000 for the first one, and $1,200 for the second. Here are the two stories. Take a bag of money and light it on fire

In the early 2000s, I worked for Living Direct, a network of consumer-based ecommerce sites. Our major property was, a seller of small-space appliances. We directly sourced most appliances under our own private label.

We had seen a strong growth in our beer segment. We were sourcing slightly modified refrigerators from factories in Asia and kitting them together with CO2 tanks from a U.S. supplier, and keg tapping and pouring components from another. Put all these together, add a one-half keg of beer, and you’ve got a kegerator (keg + refrigerator) on wheels for around $500 that fits in a dorm room or man cave.

We had a good deal of success selling kegerators on, but there was (and is) a strong community of enthusiasts in the space and we thought that a branded microsite would convert more and rank higher, in organic search results, than the product and category pages of

We had the product. Launching the microsite on our existing site architecture was simple. We were using Demandware, the ecommerce platform. A new site launch was straightforward with a new category structure and content.

All we needed was a brand.

We had known for a few years that the domain was parked — someone had purchased the domain, but was not otherwise using it. We also knew that we could buy a two-word domain — e.g., — for $10 or so.

The more we discussed it, the more we thought the domain would convey the most authority to buyers. We thought, “We are the kegerator experts. It’s there in our name!” Additionally, we thought a one-word, branded domain would help us rank higher in organic search results.

We decided to make a play for

We emailed the owner of He indicated that he was interested, but insisted that we make the first offer. We met with our AdWords employee, did a little keyword research, and projected the value of the domain, assuming the would enable us to rank a little higher.

Based on our paid ad spend, we determined that the was worth about $80,000 per year to us in “free” ads via organic search.

And here’s where we made our big mistake.

We offered $20,000 for the domain. The owner countered, and we ended up at $25,000. This was a year or two after sold for $2.2 million. So we figured this was a great deal. And, sure enough, search for “kegerator” now, 10 years later, and the first organic result is from

We launched the site, did over $1 million in revenue on just that microsite itself in the first 12 months, and grew it from there.

So it worked out!

But, there’s a postscript to this story.

A few months after we bought the domain, I met with an Internet marketer friend. He owns (note the “s” at the end). It’s an affiliate site, driving traffic to other retailers.

He asked me about the domain story. Since he is a good friend, I told him. When I got to the part about offering $20,000 for the domain, he laughed (a lot). But asked me to finish the story. I did, and asked him what was so funny.

It turned out he had attempted to buy the same domain, just before we did. He offered $2,000, and the owner accepted. But before my friend wired the funds, the owner emailed him again and said that the deal was off.

And the deal was off because we had naively offered 10 times more. Slowly, inexorably, politely creep the price up was still a good deal. We paid an acceptable price based on the value the domain provided. However, we paid more than 10 times the amount that we could have.

When I launched, someone had already registered (note the “s” again). We initially didn’t worry about it. After all, we are Fringe Sport, not Fringe Sports.

But from an early stage, many people verbally called us Fringe Sports. And our Google Analytics showed that one of the top searched terms for us was Fringe Sports. So I began negotiating with the owner for I found his email address from a search.

I emailed him from my personal (not email address and offered $200 for the domain. He responded. I was even able to obtain his cell phone number. But he politely declined, stating that he had a dream to have a web business at that domain.

After that, I emailed, texted, or called him every month for two years, raising my offer price slightly and politely asking him to sell. Sometimes he responded (in the negative); mostly he ignored me. Finally, when my offer crept past $1,000, he responded that he was considering my offer.

We negotiated a bit further and landed on $1,200 with the understanding that he could keep a branded email address for six months. I never told him I owned until after the domain transfer completed — and he never asked.

We redirected to, and moved on.

Have you ever purchased or sold a domain? How did your experience go?

Peter Keller
Peter Keller
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