(WEB HOST INDUSTRY REVIEW) — For many resellers, the domain aftermarket is a surprisingly untapped market from which they could earn additional revenue.
Perhaps one of the leading reasons why some resellers do not include listings for premium domains among their standard domain search results is because they have doubts that any customer would be willing to spend hundreds or even thousands of dollars to register a single domain.
A few months ago, Michael Goldstein, VP of marketing for Tucows reseller services provider OpenSRS, was among the many non-believers — that was until OpenSRS decided to integrate premium domains in the search results of its domain registrar division, Hover.
What he found was that not only were customers more than willing to purchase premium domains, they would do so without any pressure from a human sales representative.
Using the OpenSRS API, it was able to successfully sell 29 premium domains in a 4-month period at an average price of $1,530. And while that might not sound like a lot to some readers, another way of looking at it is selling 1 premium domain for every 853 regular domains registered, or $1.79 in gross premium domains revenue.
In an exclusive phone interview, Goldstein gave an introductory look at how integrating premium domains into a regular domain search can help resellers boost their revenue, along with his own pointers on reselling premium domains.
Premium Domains Are More than a Value-Add; They’re a Dependable Revenue Source
Domain names are real estate. For someone who is really thinking about this as a business, it’s a very reasonable thing to spend a few thousand dollars on it. That’s what came to us; even though we we’re so stuck in our way that a domain name shouldn’t cost a lot. But not if the domain name is going to be a real asset for your business — it’s just not that big a deal for a lot of people. There’s a whole different category of people who look at the $2,000 or $3,000 domains and they’ll say, “That’s no big deal at all. I spend way more on things that aren’t as important to my business.”
Resellers Will Need to Do Some Legwork Before Using the OpenSRS API
The backend is taken care of by OpenSRS. When someone does a domain search, those results are generated, but you have to do the front end work to reveal those results to your customers, so that means design. A lot of people generate results that come in different categories: here’s the exact domain name you’ve searched for and different TLDs, here are suggested names that are similar to the domain you searched for, here are some premium names. Each business or hosting company has to decide for themselves what’s appropriate for them in terms of the page layout and how much to reveal.
Don’t Worry About What Everyone Else is Doing, Design Your Domain Search Results Interface the Way You Want
A lot of resellers will put their domains in various categories as part of a separate section of results, and while that makes sense to us in the industry but that’s not how real human beings think about. So instead of putting these domains in categories, we just offered them in one long list. That just seemed more consistent with the way we all tend to shop for products and services.
Resellers Will Receive a Generous Commission on Premium Domain Purchases
You’ve got a buyer on one end, a seller on the other end, and a bunch of agencies in between. BuyDomains.com and Fabulous.com are two of the largest agencies representing buyers of secondary domains. Resellers get a piece of the sold price. With [OpenSRS] resellers, our standard rate is 10 percent commission on any premium domain name sold. I don’t want to reveal our specific financials, what we get fairig portion to the reseller. For us, if a reseller is doing well with this and they’re happy, they’re going to continue working with us and we’re going to do well selling a lot of regular priced domains.
Convince Your Customers on the Value of Premium Domains
This one is a name that’s not easy to remember and not as intuitive and you can buy it for $15 or so, compared to one that costs $2,000 or $3,000 that you’ll be really excited to put on your business card. That’s what every business that is selling premium domains needs to learn how to do: how to serve these up, how to explain to customers why does this thing cost so much, is it going to cost that much every year, is it a name that people will get confused about?
Michael Goldstein, VP of marketing at OpenSRS